The world is in a crisis. The doomsday prophets are alive and well. The stock market is reaching historical lows. Government leaders have never been in this situation and are making up their plans on-the-fly. The major solution is pumping trillions of dollars into a fragile system with the hope that the market will return to normal. People are terrified of the invisible COVID-19 enemy that is attacking thousands of people. Locked-up in their homes, they count the days. A perfect script for a horror movie of epic portions. But it’s not. How do you protect your brand in a volatile world? Here are some immediate steps:
Many brands saw the writing on the wall and quickly sent most of their employees home, as did many government institutions. Those brands that operated their business as usual were eventually forced by governments to close their doors, unless they were essential services. The employee that stayed to keep the business running are instructed to keep their social distance (two meters) from anyone else and ensure the highest hygiene standards. Employees will be your first critic if you fail to protect them and only focus on profits. People first!
As brand ambassadors rush home with office laptops and mobile devices, their ultimate goal is to keep customers happy and revenue flowing. This new decentralized work force must adjust to the new work and home realities as they are forced to improvise new ways to delivery customer satisfaction. Thank heavens for digital technology that can replace face-to-face interactions! The dreaded meetings are still happening, just virtually with frozen faces and choppy voices. A crisis means more meetings. Those brands that require face-to-face interactions with customers are scrambling to find online solutions to keep them afloat. But many can’t find a solution so closing their operations is the outcome. This has resulted in millions of North Americans being laid off. Not serving customers means no revenue. It also means keeping people safe and isolate.
So far, millions of people have flooded the employment insurance system with benefit claims. All indications suggest that this event will surpass the Great Depression with the number of people unemployed. Many of the big multinational brands have deep pockets and a war chest to fall back on to ride-out this crisis. Small brands or brands that survive on cash flow and low margins (airlines, hotels) will struggle as revenues abruptly stop and expenses pile up.
With everything closing except for essential services, online commerce is skyrocketing. However, before the crisis, over 50 percent of American families were living paycheck to paycheck and most didn’t have any emergency funds for this type of crisis (First National Bank of Omaha in Nebraska survey). What does this mean for brands? If consumers don’t have money, they won’t be spending on brands, which means further decrease profits.
Full of Fear with Empty Wallets
This is the worst combination: concerned about their financial situation and pessimistic about their future. Some economists say consumer expectations concerning economic conditions tend to be self-fulfilling prophecies. If they expect doom and gloom, the economic conditions worsen because they stop consuming. In this case, they were forced to stop consuming and by stopping, many people have lost their jobs. The reality is that many consumers are terrified for they health, their family well-being, and their future survival. Even with billions and trillions of dollars being promised to help businesses and consumers, there is little confidence that help will reach them.
Here are five actions to protect your brand in a volatile world:
1. Be Real and Engage
WPP, the world’s largest multinational advertising agency, says in a study that brands need to face the reality of the situation and address customer needs by showing a sense of honesty and concern. There are intelligent ways to acknowledge the problem and to reinforce your brands positioning and relationship. Similar to customers, brands must make difficult decisions with limited resources. Brands that take meaningful actions to help their customer through difficult times will be rewarded in the long run. If your brand doesn’t have the resources to help, continue to communicate with your customers in meaningful ways.
2. Create Added Value
If consumer don’t have money or think they could be in a difficult financial situation, they will be looking for inexpensive options with greater value.
Justify price – Demonstrate superior performance and value, product comparison, testimonials etc.
Add features and services – Free support & servicing, check-ups, extra quantity, extended warranties, free shipping or setup, or choice of colours. Make it easier for them when they are trying to juggle expenses on a shoestring budget.
Economy sizes – buy more, get more. You are positioning savings, retaining sales, and not sacrificing value. This is the Costco model of buying bulk.
Do it yourself – The IKEA model. The perception that you have to assemble it means you will be saving money – or just creating more pain at home. “What do you do with all the extra bolts and screws they give you or should there be extra?!”
3. A Strong Purpose
This isn’t the time to be an exclusive, high-end brand. People are hurting both physically and mentally. Give them a strong reason for why they need your brand today. Create urgency that this is the best-time to be buying your brand. Give them a reason why your brand will help them. Make your brand part of the solution.
4. Reduce Fear & Barriers
Show that you brand cares and understands the situation customers are facing in these difficult times. Provide alternative payment options – nothing down, don’t pay until next year, zero percent interest payments, free financing, no-credit-check, job loss protect, etc.
5. New Innovations
Make consumers forget about the bad times and create excitement towards a new product with never before seen features or benefits. For many brands, this might be difficult to accomplish in a short-time frame. Online convenience and no-contact delivery can be a simple solution. But you can also adjust your brand to have new efficiencies or reduce costs. Reduced costs can be accomplished many ways such as production efficiencies, cheaper ingredients, smaller package size, single servings, and slimmed-down basic version with no bells or whistles. So, if you can’t “wow” your customer into buying your products, then reach out with an offer they can’t refuse.
To protect your brand, not only do you need to address customer’s fears but continue to strengthen your brand’s relationship with your customers. Be creative. Remember that your best customers can be your best backers during difficult times. With the help of social media, they can quickly be mobilized to get your brand message out – from a simple customer referral program to getting “likes” for a new product. Always talk about the value your brand brings –the rational and psychological. Tap into the concepts of small indulgences, sharing, and helping. Do random acts of kindness, reach out with empathy and connect with your customers on a different level. Build trust based on reassuring your customers that your brand is committed to their well-being and not profits.
Stay Safe & Healthy
Consumers are scared. The future is unknown. The brands that step-up and help their customers during these uncertain times will survive. This is a time to start thinking differently. A time to take chances in a risk-adverse, volatile world. Brands will need to reinvent themselves to flourish in a new post COVID-19 world. Good luck in these challenging times.
As the world becomes smaller and smaller from digitization and globalization, many brands are becoming bigger and bigger. There was a time when big was a disadvantage with too many layers of bureaucracy, creating a lack of agility, innovation, and entrepreneurship. Digital technology has changed all of that. The bigger, the better. In the book, Big Is Beautiful authors Robert Atkinson, and Michael Lind conclude that large companies are more productive, innovative, and diverse than small ones. The number of mergers and acquisitions has doubled since 1997 to 48,825 in 2016, with a total value of $3.62 trillion. Last November, on “Single Day,” giant online Chinese retailer, Alibaba racked up more than $38 billion in sales in 24-hours. To put this into perspective, this is more than the yearly GDP of countries like Paraguay and Iceland.
Killer brands are also collecting more consumer information and data than ever before. In 2017,DOMO estimated that every day 2.5 exabytes (add 18 zeros) of online data are generated worldwide. For example, one exabyte is one quintillion, take 2.5 quintillion pennies, and you can cover the entire surface of the earth five times! Market intelligence companyIDC predicts the world’s digital data will grow to 175 zettabytes (add 21 zeros) by 2025. With this much data power, are killer brands monopolizing and manipulating markets and consumers, forcing consumers to pay more, destroying competition and innovation? Are domineering brands killing free enterprise?
Some killer brands are more reliable and wealthier than many nations. McKinsey Global Institute says that 10 percent of the world’s listed firms generate 80 percent of all global profits. The top 20 global brands control over 42 percent of the world’s economy. If you dig deeper, you will see that some brands dominate in several industry categories. Interestingly, the Technology sector, worth over $5.7 trillion, has the highest concentration with over 50 percent controlled by four brands: Alphabet (Google), Microsoft, Apple, and Facebook.
Similarly, the Consumer Services category, worth $2.6 trillion (about the size of France’s GDP), is controlled by two brands: Amazon and Alibaba. With so much control and money, can we trust that these brands have our best interest at heart? In essence, these are brand-nations with a massive responsibility to society. These dominant brands are accountable only to shareholders; shareholders are only interested in profits and ensuring the brand’s continual expansion. Currently, there is a significant debate on whether dominant killer brands are healthy for economic growth in free enterprise world commerce.
Death Row for Past Killer Brands
Go back one hundred years, and the dominant brands were very different with US Steel, American Sugar Refining Company and Standard Oil at the forefront.
In the late 1870s, Standard Oil has founded by John D. Rockefeller. The story goes that Mr. Rockfeller expanded the brand by bullying suppliers for preferred rates and buying out many small competitors. At one point, Standard controlled nearly 90 percent of US oil production. In 1890, the US Congress passed the Sherman Antitrust Act, which outlawed monopolistic business practices. After several legal manoeuvres, the world’s most powerful company, Standard Oil, was finally ordered by the US Supreme Court to break up into 34 independent companies. Standard Oil came under heavy public criticism and outrage after investigative journalist Ida Tarbell published a 19-part series of articles damning Mr. Rockfeller and Standard Oil as ruthless and immoral. Today, these companies are now some of the world’s largest Oil & Gas brands like ExxonMobil, Chevron, and ConocoPhillips.
In 1969, the US government took a run at IBM, who at the time had nearly 70 percent of the business computing industry, but the case never amounted to any significant action. While the case dragged on for over 13 unlucky years, the distracted IBM company missed out on personal computer innovations. A death sentence for the company.
The next big shake-up wasn’t until 1983 when the Bell System monopoly was broken-up. Bell Systems started as a monopoly back in 1876 with the help of patents that did not expire until 1915. This lone brand built a massive telecommunications infrastructure network across the USA. Today, the many Baby Bells contains well-known brands such as Verizon, AT&T, CenturyLink, and US West, to name a few.
In the 1990s, Microsoft tried to force the computer industry to bundle their web browser with the operating system to control the market. With the result of destroying the top competitor Netscape which caused the US Department of Justice to file antitrust charges against Microsoft. Microsoft wasn’t broken up during the appeal process; the distraction allowed companies like Google to gain an edge. Senator Elizabeth Warren says the antitrust case “helped clear a path for Internet companies like Google and Facebook to emerge.”
Today’s Killer App Brands
We know the big six killer brands. We interact with them daily and sometimes hourly: Alphabet (Google), Microsoft, Apple, Facebook, Amazon, and Alibaba. They are all technology, digital application-driven and American, except for Alibaba. American brands account for a disproportionate percentage of the world’s largest brands.Elvis Picardo, Portfolio Manager, attributes this phenomenon to a stable US equity market, a strong US currency, and premium valuations (mega-caps).
Collectively, these companies have defined the world’s culture and drove the information and digital revolution. They have changed our lives: how we work, play, and think. They have contributed to political upheaval; misinformation; economic, social, and technological trends; and other changes beyond our imagination. Together, their total market value is over $4 trillion, equitant to Germany’s GDP (4th largest in the world). Freelance writer Daniel Baylis says, “The benefit of being one of the biggest brands of the world is that you often get to define the rules of the game.”
This statement is very true. Apple redefined the music industry. They destroyed the recording industry and record labels. Today, Microsoft’s windows system has only 80 percent of the desktop operating system market share. Back in 2013, it had over 90 percent of the market share. Amazon redefined the book industry forever and is in the process of destroying the bricks and mortar retail industry. Without Google we would never find anything on the internet. Try navigating over 1.5 billion websites without Google. Facebook has played a major role in overthrowing governments and making political movements a reality both positively and negatively. They have also driven the human psych to crave more “likes” by the minute. Alibaba is still behind Amazon in e-commerce revenue, but it continues to defy expectations with constant growth of over 50 percent every quarter. It doesn’t hurt that they have 1.4 billion potential consumers.
Collectively, Google and Facebook control over 60 percent of the global online advertising market (excluding China). This year, the duopoly is forecast to pull in $174 billion in ad revenues. Together, they’re redefining the advertising industry.
All of these numbers are mind-blowing. It’s not hard to believe that in the world of trillions and billions, the average consumers can get lost between the commas. The interesting fact is that these companies are making billions because they know us better than we know ourselves. What is good for the brand might not be suitable for you or me. Ram Shivakumar, an economic professor at TheUniversity Chicago Booth School of Business, says these brands have given us enormous benefits to our quality of life. But he cautions that “the value of these contributions shouldn’t blind us to the dangers posed by the power modern superstars have accumulated.”
To keep their dominant power, these brands either buy out potential start-ups or drive them out by pricing or other predatory activities. This killer instinct is better known in the venture capitalist world as the “Kill Zone,” where start-ups don’t have a chance of competing.
Facebook has become a brand we love to hate but not enough to log out forever. The fear of missing out is too high for most people. While our commitment to Facebook doesn’t have a financial impact (because its free for users), we do pay dearly, giving up our privacy as they collect personal data that they have sold and misused. Facebook estimates that more than 2.1 billion people use Facebook, Instagram, WhatsApp, or Messenger every day, and around 2.7 billion people use at least one of their services each month. Facebook’s on track to bring in over $60 billion in total revenue in 2019.
It is through their active database that they can tell if a competitor app is getting too hot for comfort. The “Kill Zone” around Facebook is big. They either buy them out (like Instagram and WhatsApp) or mimic their popular features like Stories and Bonfire to neutralize Snapchat and Houseparty apps. Linette Lopez, a political journalist, said Facebook used user-data against smaller rivals such as Vine. In essence, they destroyed the Vine app by blocking its friend-finding feature.
Before the acquisition, Instagram had only 30 million users and 13 employees. Today, they have over 1 billion monthly active users, and LinkedIn indicates they have more than 9,000 workers. Facebook has the power to make or break any start-up. Wikipedia says Facebook has acquired 82 companies so far.
Free or not, Facebook has had its fair share of negative press and global regulatory attention due to the mishandling of private personal data, disseminating fake news (especially for the Russian military intelligence agency), and severe data leaks.
Anna Johansson, marketing and PR consultant said, “Facebook is operating in some contentious and ambiguous ethical territory, and some of the decisions it has made in the past decade are somewhere on the spectrum between short-sighted and dumb.” Andrew Burt, Chief Legal Officer at Immuta, is less polite and states that privacy and online security risk is too high for consumers. He believes governments must “diminish the vast power of companies like Facebook by limiting their ability to hoard the data they collect and to aggregate the services they provide, contracting their ‘attack surface,’ so to speak, to a level that is manageable.”
If Google used its dominance to gouge us on prices, we would all be up in arms or become a fan of Yahoo. The problem is we don’t see their revenue model. Why would we be upset with services (such as search, Gmail, Google Docs, Translation & Maps) that are free and some of the best services? Google controls over 88 percent of the internet search market share. Statista states that there are about 4.5 billion active internet users or 58 percent of the global population. That would mean that Google touches around 4 billion people or 52 percent of the world’s population. Should we be worried?
Google has more data on us than any other internet service. They know our wants, needs, and desires – priceless for the marketer. Getting a marketer’s message to the right audience, at the right time, is the ultimate goal. In 2018, Google made $116 billion in advertising. With a war chest of billions of dollars, they are free to buy-out potential competitors that get in their “Killer Zone” and pick up innovations before they are hot. To date, they have acquired over 120 such companies.
In their data harvester information, Google listed ten principals that are important to making “money without doing evil.” Many companies are incredibly frustrated with Google’s behaviour, but the average consumer remains blissfully ignorant. The Federal Trade Commission investigated Google and concluded that they used their dominance to make competitors harder to find on its search engine. A simple ranking algorithm mishap or change can destroy a competitive brand. Who is watching Google ensure their definition of “evil” is the same as ours? To date, they have been fined $2.7 billion for violating antitrust regulations in Europe.
Amazon has been accused of hurting suppliers, competitors, and even their employees. But their growing online customer base is addicted to their competitive prices, convenience, vast selection, and fast delivery system. While they destroyed the original bookstore market, they made books more sustainable and environmentally friendly as long as you have their e-reader. The company commands 50 percent of all book sales in the United States and 75 percent of all e-book sales. There have been several reports of Amazon using its dominance to pressure publishers into more desirable agreements.
Their goal is to have e-books be the gateway to the store of everything. So far, about 197 million people visit their online store each month. Over half of American households are Amazon Prime subscribers. In 2018, Amazon’s share of the US e-commerce market was 49 percent and still growing.
The tactics they use to keep growing is the concern. Brad Stonerecounts in his book The Everything Store how Amazon wanted to get into the diapers business and reached out to Quidsi, who owned diapers.com. They weren’t interested in selling, which led Amazon to set up the Amazon Mom Promotion, where they discounted baby products, including diapers and free delivery, basically forcing Quidsi to call “uncle” and sell to Amazon. Amazon then quickly retired Diapers.com. A perfect example of how the “Kill Zone” works. To date, Amazon has acquired 101 companies and has a stake in another 22 companies.
Amazon’s ultimate power is its transactional data. They can see what is trending and what is hot. They aren’t just happy with being the biggest online marketplace for other vendors but want to get into the action directly through their own product brands such as Amazon Basics and Amazon Essentials. This is not dissimilar to supermarket house brands, but they don’t stop there. They have many other brands that aren’t associated with Amazon as Goodsport, Lark & Ro, North Eleven, and Society New York. TJI Research Inc. recently reported that Amazon has more than 450 brands sold exclusively on Amazon. The third-party brands don’t have the complete picture like Amazon who has all the consumer data and expertise to react to analytics. Is this a conflict of interest?
There is always one bad apple, but Apple is hard to dislike. They made music accessible to everyone through iPods and other Apple devices. They took everything big and made it small and portable. Their closed ecosystem business model is brilliant. Every transaction that goes through their iOS has a positive financial benefit for Apple. Some call it the Apple 30 percent vendor tax. Jonathan Prince says, “…Apple makes more off a Spotify subscription than it does off an Apple Music subscription and doesn’t share any of that with the music industry. They want to have their cake and eat everyone else’s too.” As of June 2017 (the most current statistic), 180 billion apps have been downloaded from Apple App Store.
Apple is the exclusive luxury brand with profit margins (32 percent) similar to Hermès (35 percent) and Ferrari (29 percent). Think about it. They can sell a phone at $999 and sell 29 million of them in less than two months. That’s what happened in 2017.
Apple has also acquired its fair share of potential competitors. Wikipedia reports about 100 competitors, but they state Apple doesn’t regularly release financial details on mergers and acquisitions. In May 2019, CEO Tim Cook told CNBC that Apple purchased a company every two to three weeks on average, having acquired 20 to 25 companies in less than six months. It sounds like the “Kill Zone” is alive and well at Apple.
Apple has had its fair share of antitrust lawsuits for anti-competitive practices, price-fixing accusations, tax avoidance schemes, and deplorable working conditions in Asian electronic sweatshops. Their aggressive business tactics only negatively affect vendors, app developers, and competition – not customers. Keeping their customer happy is priority number one.
Amazingly Microsoft has been around for over 44 years and has been a dominant player in the personal computer operating system market since the mid-1980s. Its founder, Bill Gates, is one of the largest philanthropists in the world, reportedly donating over $45 billion in the last 25 years. Today, Microsoft understands how to protect its market without raising the concerns of the antitrust police. Since its conception, Microsoft has acquired over 225 companies and has investments in over 60 other companies.
Alibaba is Amazon’s nemesis. Established five years later than Amazon, it continues to grow exponentially in its region. These two killer brands have many things in common except that Alibaba has over one billion potential customers in China compared to Amazon’s half-billion in North America and Europe. Ming Zeng the Chief Strategy Officers at Alibaba says Alibaba is more than just an e-commerce company and “does what Amazon, eBay, PayPal, Google, FedEx, wholesalers, and a good portion of manufacturers do in the United States, with a healthy helping of financial services for garnish.” Their goal isn’t just to conquer China, but Southeast Asia, India, Africa, Europe, and, hopefully, the US. I’m not going to get into any China rhetoric, but this brand could be the biggest killer brand the world has ever seen.
Since it’s inception, Alibaba has only acquired 29 organizations, a small number for a killer brand. The significant problem with Alibaba is that we don’t have full transparency on this company as it resides in secretive China.
Serial Killers on the Loose
Killer brands have enjoyed a world unhindered by rules and regulations as they define the future. Consumers have embraced these new toys and innovations, regardless of the consequences. Still, without guidelines and clear values, this empowerment can lead to chaos and bad decisions both by consumers and companies. Unencumbered by laws and regulations, killer brands have been able to prosper and make shareholders, employees, and governments very wealthy. The trillions and billions of dollars I have quoted are unimaginable and impossible to comprehend, but they are real. To date, we have relied on these brands’ corporate governance to do good and not evil. Many consumers are oblivious to the risks and dangers, addicted to the digital candy and satisfaction that these brands give them.
Our antiquated legal systems, laws, and regulatory framework haven’t been able to keep up with the digital revolution. The US is still protecting consumers from monopolistic business practises defined by the Sherman Antitrust Act passed by the US Congress in 1890. The world and business practise specifically have changed a lot in 130 years! In the last decade, the killer six have made over 657 acquisitions with little to no challenge from antitrust authorities. In some cases, these acquisitions propelled these brands to new heights, but many were just killed or silently integrated to reduce competition.
The problem today is that the authorities don’t have the tools, the understanding, or the laws to protect humanity in this new digital world. The scary part is that technology isn’t waiting for the authorities to catch-up. Technology is advancing at warp speed. Governments can only protect us if they know-how, which means they need to be smarter than the killer brands. A scary thought indeed!
The German consumer isn’t as trusting as North Americans. Their history has trained them to be fearful of mass data collection and unchecked powerful forces. They are one of the few countries that haven’t embraced credit cards and debit cards for fear of leaving a digital path. Not surprisingly, they are at the forefront of data privacy and protection. They are currently trying to stop Facebook from aggregating consumer data between their various platforms (Facebook, Instagram and WhatsApp) and other third-party site data collection.
Throughout history, we have seen that extremely concentrated wealth and power that hasn’t benefited humanity. Toby Walsh, professor of artificial intelligence, cautions that immense wealth comes with tremendous impact and responsibility. He says, “We’ve always had to regulate markets; unfettered capitalism tends to go to excess. Regulation is needed to ensure that companies act in line with the public good and not just the stock options of their CEOs.”
The winner-take-all approach comes with many risks. History tells us that governments take action only when consumers aren’t happy. Today, the killer six are focused on keeping consumers happy, but what happens when they aren’t? With all the data monitoring killer brands have, they will know this answer before we do.
As these killer brands race towards the internet-of-things with further digitization and data harvesting, who will protect the consumer? The world has never seen such massive, powerful brands with their ability to invade consumer privacy, monopolize new markets and quietly destroy the competition on their quest to dominate. Will this quest eventually translate into political power and the demise of free enterprise? Only time will tell.
The article illustration was done by David Parkins, a prolific illustrator and cartoonist. It first appeared Jan. 18th, 2018 on the cover story of The Economist titled How to tame the tech titans.
I just finished shopping in a
typical large urban shopping mall. With over 360 stores, I was sure I could
find a simple pair of black active-wear shoes, your basic laced up runners. I
was on a mission.
The first store I saw was the very popular and trendy Steve Madden with a large “50% OFF” sign in the window. They had a couple pairs of runners that were close to what I was looking for, but they all had a white rubber band at the bottom. If it was black like the rest of the shoe, it would have been perfect. A salesperson asked if I needed help, but I politely declined the help as this was the first store I had tried. So, I left Steve Madden and I continued on.
Next was B2 Shoes, another
trend setting store. I quickly found two styles that could work. I approached
the checkout counter to find my size 11. The friendly young lady replied that
they didn’t have an 11 in either of the styles, but she had 10.5. When I said
10.5 wouldn’t work, she suggested that I go online where they had a greater
selection. I thanked her and went on my way.
I proceeded to Little Burgundy,
Skechers, and then Hudson’s Bay with no luck. I was starting to
believe this wasn’t going to be as easy as I had thought. But I was persistent.
I found the mall directory and scouted out 29 other footwear locations, then
planned my attack.
My first stop was Browns who also had “SALE” signs everywhere. I found a perfect match, and, for safety, I choose another as backup and took them both to the cash register and waited for someone to help me. Patiently I waited as someone else was being helped. I stood there waiting and waiting. Finally, someone ask if I needed help. I forced a smile on my face and asked if they had these shoes in size 11. The lady went to the computer terminal. “We only have the one pair in 10.5” she announced as if she saved the day. Again, I replied that that size wouldn’t work. A shoe that was a half a size too small wasn’t helpful unless they thought I could curly my toes to fit. As I left, she suggested that I go online where there would be more sizes available.
Dejected, I went onto ALDO shoes who had a “Two for One” sale. I didn’t want two pairs of shoes; I just wanted a simple pair of black runners. They had a fancier black leather shoe. I was becoming desperate. Once again, I stood in line to see if they had my size. As I stood there waiting for someone to help me, I started to understand why retailer store brands are doomed. “Can I help you sir,” asked the young girl with bright colored hair. Startled, I asked her if they had these in size 11. No size 11 but they had a 10.5. Really! She too suggested that I go online.
I was beginning to think that size 11 was a rarity. I now understood how Shaquille O’Neal must feel with size 22 feet. The American Academy of Orthopedic Surgeons reports that the worldwide average shoe size for men is between 9 and 12. According to Shoes.com, the average Canadian male shoe size is 10.5. Do retail stores only carry the average size?
I continued on my quest checking Champs,
Lacoste, Journeys, and SportsChek with no luck. Finally, I
gave-up. I had spent over an hour with nothing to show for it. I moved on to
other items on my shopping list.
As I was heading out of the mall
feeling defeated, I saw the Foot Locker. “Last chance,” I said to
myself. On display was a black Converse. I took it off the shelf and
walked to the counter to once again see if they had my size. The girl tapped
onto the screen and advised me that they did. I almost jumped up for joy, but I
just stood there feeling sad that the retail business was dying a painful death
and they were totally oblivious as to why. A young guy in a referee outfit came
over with a box and opened it to show me that the runners were the same as the
ones I took from the shelf. He put down the box as I started to take off my
shoes to try them on. Unceremoniously, he left, and I am there to fend for
myself. I thread the laces and put them on. Satisfied that they fit, I go to
the counter to pay. I explain to the lady that I will wear them out and will
not need the box. She replies that without the box I can’t return them. I agreed
to this condition and paid with my debit card. She hands me a bag to put my old
shoes in it, like I’m at a discount store.
I know all retail transactions aren’t like the one I just descripted, but this isn’t the first time I have been disappointed and totally frustrated with the line ups, lack of service, or no service at all, and limited selection and sizes. There are a number of reasons why retail store brands are doomed. Unconsciously, they are driving us to online shopping, if not telling us directly. Next time, I will start the retail journey on my laptop in the comfort of my own home.
The digital world continues to transform businesses and brands. Agile brands that can anticipate the future and take advantage of digital opportunities will win. The brands that hesitate or procrastinate will lose. Here are five digital trends that can either be an opportunity or a threat to your brand.
There are over 75 million smart speakers in homes worldwide
and this number is growing exponentially. According to Amazon, “tens of millions” of
Echo devices were sold in 2018. They are currently collaborating with auto
industry partners (such as Audi, BMW, Ford, Lincoln, Lexus, and Toyota) to
ensure that Alexa is available on the go. Do voice assistants like Alexa, Siri,
Cortana, and Google Assistant know your brand? Voice-powered applications are
expected to explode.
“We are at the point of a big transformation,” Patrick Gauthier, Vice
President at Amazon Pay, said during his keynote at
20/20 USA. “With voice we are going to see different complementary
experiences emerge.” Gauthier said he expects smart speaker technology to play
a bigger role when it comes to providing product information or executing
If I asked a question about your brand, what would Alexa say? Does your brand have a recognizable voice like your logo?
The hot concept in 2018 was artificial intelligence (AI) and
it will continue to get hotter in the years to come. Real personalization is
becoming possible thanks to the improved sophistication of artificial intelligence
and refined logarithms. With big data, GPS, and other tracking devices, brands
are able to anticipate their customer’s every desire. Consumers are expecting
brands cater to their needs in real-time. Of course, there are some legitimate
concerns that brands need to understand like Security & Privacy – another digital trend.
Limited availability isn’t good enough anymore in today’s
always on and in the palm of your hand world. AI can help while you and I
When you connect a chatbot to the technology, you have super-charged
customer service. It can provide important information to potential buyers
while collecting insights to help the brand improve. A chatbot will
consistently deliver your branding messages and can access all the available
data to ensure that the customer gets the best personal experience. Grand
View Research says that the chatbot market is growing at an average
rate of 25 percent annually. With over 45 percent of customers preferring a chatbot
over to a real person, it’s no wonder many brands are turning to a chatbot! Make
sure your chatbot voice reflects you’re demographic and brand and be mindful of
gender, personality, and accents when developing a (literal) brand voice. With
the power of AI, your brand will be able to anticipate customers’ needs and
provide better brand solutions 24/7.
How smart is your brand and how smart does it need to be to compete?
We are quickly turning into a visual society. Since 2014, the
number of Americans who read for regularly pleasure has fallen by more than 30
percent. Research by Pew Research Center and Gallup
indicates that the number of adults not reading any books has nearly tripled
between 1978 and 2014. During the same time period, TV consumption rose. Robert Passikoff, president
Keys, says that nearly 75 percent of all communications today are visually
based. He predicts that number will go up to 90 percent in the next three
Younger people are moving away from the boob tube to YouTube.
The world’s 2nd biggest search engine today is YouTube
where more than 1.8 billion registered users watch about 5 billion videos daily.
The average viewing session is about 40 minutes, up 50 percent year-over-year.
The site has a massive collection of 1,300,000,000 videos and that number growing
at about 300,000 new videos per day. Netflix continues to capture eyeballs with
over 137 million streaming subscribers as of Q3, 2018. Today’s challenge is
developing mass consumable content that is worth watching.
According to Nielsen’s data, streaming video-on-demand services are now used by two-thirds of U.S. households. That figure increases by 10 percent year-over-year. How do brands get in on the action? The traditional 15, 30, or 60 second commercial doesn’t fit the new entertainment models. To get your brand message noticed, you will have to produce your own content. Red Bull is a content-creating monster, blending their advertising with entertainment programing such as documentaries, music, and sports events. Their secret is capturing fantastic moments with breathtaking background scenery like mountains, oceans, outer-space, and the great outdoors. Their message says anything is possible with a Red Bull.
Another possibility is product placement within the content. Procter & Gamble had a deal with the ABC show Black-ish where the company was written into the plot. While Procter & Gamble was successful, product placement carries risks. If too many companies choose this path, viewers might reject sub-par content.
By 2021, mobile video will likely account for 78 percent of total mobile data traffic. In many cases, these videos will be amateur in-the-moment content. What is your brand’s plan to tell your visual story?
Brand Security &
With the recent news about the misuse of personal data on
Facebook, consumers are becoming more cautious about sharing their data. We
have heard of government databases, retail (including hotels) credit card data,
and credit reporting agency databases being hacked and breached. We are all too
aware of the sad consequence of people’s identity being financially threatened
and clever phishing schemes fooling people using a small piece of stolen information.
Consumer Cybersecurity Study revealed that 34 percent of digital
consumers experienced a PII compromise within the last year.
Trust in any brand is only as strong as the protection of PII against hackers. Consumers will continue to evaluate the value of sharing PII. As online technologies continue to advance, we will see more breaches and consumers threats. Brands will need to one step ahead of threats to keep consumers data safe and secure. What is your brand strategy to keep your customers’ PII safe?
Brand Advocates &
Reviews and ratings continue to be the digital word-of-mouth for most brands. Not every customer experience will be perfect – mistakes happen. But a brand’s reputation is most vulnerable online. Customers have an array of online avenues to voice their frustrations using review and rating sites, comment boxes, social media, and blogs. The goal for all brands is to have five stars but the true test of a brand is when they don’t. How did the brand respond online and in real time? How good is your customer service?
While people may hesitate to do business with a brand with
negative reviews (depending on the severed of the problem or the number of reoccurring
problems), having only positive reviews diminishes their credibility and is
also a problem. Responding to the issue and showing empathy will help build a better
relationship with current and potential customers. One potential solution to
negative reviews is to have two-way reviews: the customer can review the business
and you can review the customer.
Reviews are the foundation but influencers are the new brick
and mortar. They are a higher-level, credible source for your brand. There has
been a trend of shifting credibility away from celebrities towards consumer’s
peers – real people building content. Moms influencing other moms is a great
example. Social analytics company Shareablee’s
research (2017) shows that digital creators who have between one million and 20
million followers outperformed celebrities and micro influencers (less than
According to a Gartnerreport (2018), “Influencer
marketing is at an inflexion point. Brands promoting products via influential
individuals is no longer a secret – consumers know they being marketed to,
while still consuming influencer content.”
To ensure brand engagement, selecting the right
influencer(s) is paramount. You want to make sure that your influencers have
similar values and have transparency and authenticity as core values. Building
a long-term relationship allows the influencer to become a natural advocate as
they build brand insights and content that reflect positively on your brand. But
even better is unsolicited user-generated content by loyal brand fans in the
form of photos, videos and positive reviews.
Does your brand strive for five stars and inspire customers to share it in real-time?
No brand can escape the digital world or its trends. It’s better
to embrace digital transformation and its tools than to lose to the competition.
But never forget that the personal touch is the most powerful tool a brand can
have. Consumers still trust people and people still want to be with other people.
Celebrate these facts with your brand and combine it with the latest digital
tools to put your brand power into the consumers’ hands (literally) and you will
have one of the most loyal brands in the world.