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PAST | Interbrand White Paper - Consumer Shift
 

PAST | Interbrand White Paper - Consumer Shift

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Discussion paper on the shift in behavior of consumersand the impact of emerging consumption channels for brands across the world, and how leading brands are rising up to the challenge.

Discussion paper on the shift in behavior of consumersand the impact of emerging consumption channels for brands across the world, and how leading brands are rising up to the challenge.

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PAST | Interbrand White Paper - Consumer Shift PAST | Interbrand White Paper - Consumer Shift Document Transcript

  • Consumer Shift How leading brands respond to a changing marketplace by Jeff Reckseidler- December 2008
  • Consumer Shift How leading brands respond to a changing marketplace Consumer evolution and the pressure on brands channel mix, and content offering – instead employing antiquated In recent years, increased consumer control, personal approaches – many of these brands saw their money go to waste. empowerment, advances in technology, and a plethora of devices The few brands that achieved success during this time reacted and applications have changed the landscape for many marketers. differently. They employed strong digital go-to-market strategies, The shift has been a mixed blessing. While it has enabled consumers offered relevant site and content experiences for the channel, and to engage with their world in a multitude of ways that didn’t exist worked diligently to offer innovative customer experiences that even a few years ago, this consumer evolution has also placed drove value with each and every interaction. increased pressure on brands. Over the last few years, brand The Second Coming managers, marketers, advertisers, consultants, public relations professionals, and media companies have all scrambled to Today, brands are experiencing yet another paramount shift in understand how consumers behave, hoping to provide solutions to consumer behavior. The Internet has returned to its roots as a emerging business challenges. community oriented connection point, creating social media avenues and new interaction points to consider. Blogs, MySpace, However, because the reaction to the shift is to move swiftly – to Facebook, mobile devices / applications and integrated platforms engage with consumers immediately in their chosen consumption that connect consumers to their world have come to market quickly, channels – the results are brand offerings that are confusing and ushering in an era of increased connectivity and elevated consumer fall short of consumer expectations. Still, there are many examples choice. of great brands that are successfully navigating the multitude of emerging channels by simply being true to their essence and As consumers begin to adapt to this new technology, brands do understanding the value they provide to their consumers. The not want to be left behind. Again, we can see brands making the most effective brands understand what they bring to the table same mistakes as they did the first time: rushing into misguided and offer that up to consumers at every touchpoint. These brands go-to-market strategies without careful analysis of their consumers have increased in value by enabling relevant and intriguing brand or the digital essence of the brand. Just as before, they have not interactions throughout the customer journey. considered how these changes will potentially impact the overall brand perception. The consequences of this are potentially dire, The dawn of the Internet especially when you consider how vocal consumers are and the This isn’t the first time the digital space has put marketers and channels they now have available to voice their concerns to the brands on edge. In its formation, the Internet was a medium for masses. homesteading consumers to write and share content, pictures, recipes, and everything else. Chat rooms, message boards, and Take the well-known example of Wal-Mart. A few years ago, Wal- early generation Instant Messaging applications brought the global Mart started a non-branded and supposed third-party blog to community together and drove demand for new and exciting forms incite conversations with consumers. Shortly after it was created, of communication. The emergence of the Internet as a viable Wal-Mart was exposed as the backer and mastermind behind the communications and sales channel had corporate America in a blog. Consumers were not pleased. It took some time for Wal-Mart tizzy. Everyone was trying to unlock its potential. Eventually the to recover from that initial foray. Some may say this is a PR blunder space became an ecosystem of companies, advertisers, and venture and not a brand concern. However, I would argue that it is a brand capitalists that all saw the economic benefits of reaching and issue as every consumer interaction sets the perceptions of the connecting consumers with their offerings online. brand and in this era, consumers have the means to spread their experiences to many. Brands jumped into the channel, suddenly offering online shopping, rich and dynamic Flash sites, and new innovations to capture Recently Hasbro and its classic Scrabble brand experienced a similar the minds of consumers. They spent massive amounts of dollars brand setback. A Facebook application called Scrabulous invigorated in media to create recall for their URLs. However, because they new life into the game by offering users a version of Scrabble. If failed to create the right mix of consumer insight, brand values, a user invited friends on the social network portal to use the
  • Brands need to understand that digital brand management is becoming a strategic business practice. application, together they could all play an ongoing game. Users brands remain and stay valuable to consumers through these spread the application virally. 850,000 downloads of the application revolutions? were reported and the usage rate had been over 50,000 active game Perhaps some of the answer lies in Google. The 2008 Best Global plays a day – a phenomenal success for an application. However, Brands report ranks Google the 10th most valued brand in the Hasbro was not the provider of this game. Although Hasbro fought world, up from 20th in 2007. It has achieved this growth by to make an association with Scrabulous to ensure that consumers remaining true to its roots and by continuing to deliver class-leading associated the game with the brand, the independent developer and innovative experiences to its consumers. Recently, in a client’s held on to its property and Hasbro decided to sue over copyright focus group, Google was considered by our client’s consumers to be infringement. Hasbro won the fight and Scrabulous was removed an innovator, an enabler, and a connector. Google’s brand essence from Facebook. is to offer very relevant and efficient ways to organize people’s lives. But did they “win?” Legally, the answer is “yes” – copyright and Every application, product, and consumer offering ties back to the trademark are very serious components of brand management. company’s values and the brand it has built. In only a few years it However, over 850,000 applications went dark to the dismay of has become a multi-dimensional company that continues to be the a community of engaged users who now view Hasbro as evil. In enabling force for consumers’ desire to be connected. the end, Hasbro lost a great opportunity to create a new legion of An example of an established brand that has stayed valuable to brand loyalists and reinvigorate the brand. Even though Hasbro consumers through these revolutions is Nike. In the early years felt it needed to protect itself and the brand, all it did was alienate a of digital marketing Nike made the necessary back-end technical younger demographic and create a negative brand situation. decisions and investments that allowed it to serve an elaborate, Who will make it through? rich and dynamic site experiences to consumers. It placed digital The proliferation of mobile devices and applications, social media brand managers throughout all of its divisions and categories platforms, converged services, and immediate feedback platforms to ensure each and every initiative was indicative of the brand: has created huge shifts in consumer behavior. While brands need empowering, class leading, and emotion invoking. They created to respond accordingly, they need to resist the urge to rush to strong relationships with leading interactive agencies, and they immediate action. Instead, it is important for brands to pay more gave digital brand managers a seat at the table at the product attention to the relation these interactions have to consumers’ development stage. As such, they were able to ensure that Nike’s overall brand experience. Brands need to understand that digital digital environment was considered and embraced, especially as brand management is becoming a strategic business practice that they formulated the go-to-market strategy. The product of these understands and directs the customer journey, as well as customers’ efforts is the wildly successful NikeID and Nike + (iPod) initiatives, corresponding behaviors and interactions with brands. which continue to build affinity and relevance for the Nike brand. Recently I revisited the Interbrand Best Global Brands report from Financial services companies such as HSBC and Fidelity 2008 to consider the impact the digital space has had on leading demonstrate how to stay relevant. HSBC empowered consumers brands. The list contains a very interesting mix of venerable Fortune through the ability to conduct low-involvement tasks through 500 companies: affinity brands; scrappy Internet based brands; self-service channels, allowing the organization to service their large consumer-centric product companies; and even a few fast customers more effectively on more arduous events in the food feeders. customer’s lifecycle. By spending more time with its customers on complex transactions, HSBC restored a trusting and friendly There are three digital brands that appear on the list: eBay, Amazon, relationship with its customers. This helped HSBC earn a bigger and Google. All three have all emerged as powerful brands in the share of wallet and decrease costs for the organization overall. marketplace and have a place among some of the world’s best, Meanwhile, Fidelity Investments gave customers a multitude of managed companies. How did these brands move up the list? Or, research, data and analysis tools online that allow their customers perhaps more importantly: How did the older and more established to self-direct some of their financial decisions. This created a more
  • The brands that embrace the digital space remain relevant to consumers across the globe. empowered and informed customer who looks to the brand as an indispensible component. What does this mean? The brands that embrace the digital space remain very relevant to consumers across the globe. These leading brands push themselves to understand how their suppliers, their customers, and their stakeholders view and interact with their products. By understanding the digital medium, they can develop powerful brand orchestrations, driving consumer consideration and overall brand equity. As consumer behavior continues to shift in response to changes in technology, brands need to stay vigilant, listening, understanding, and responding to consumers. The brands that take their digital brand management seriously are the ones that will emerge as winners.
  • Jeff Reckseidler Jeff Reckseidler is a Senior Consultant in Strategy and is primarily located on-site with AT&T in Texas. Over the past seven years, Jeff has guided numerous award winning, multi-channel campaigns as both an account and strategy lead with some of North America’s leading interactive agencies. Creating and managing www.interbrand.com brand value TM