Two recent developments from Sustainable Brands have me jumping for joy. For those who don’t know, Sustainable Brands is a global community of business and brand leaders with a goal to ’help brands succeed while accelerating the shift to a sustainable economy.’ I was delighted to hear they are bringing their annual conference to Vancouver this year, in early June. It’s refreshing to see a typically US-centric organization look beyond its borders for a place to gather, like TED did a few years ago. And it reflects well on Vancouver’s image in the global business community to have an event with this type of focus choose our fair city.
This year’s conference theme, ‘Redesigning the Good Life,’ is based on a 3-year global initiative that Sustainable Brands launched in 2017. The initiative began because of a hypothesis that our societal aspirations are shifting around the world, as we realize the harm that over-consumption is having on us, our communities and the planet. The organization decided to begin by conducting a study in the US, to capture consumer perceptions about what constitutes ‘the good life’ and to see if they reflect emerging global insights.
The findings from this study also had me jumping for joy. The data showed that there is indeed a long-term shift in consumer aspirations—the definition of living ‘the good life’ has changed to something more positive and sustainable. The focus is moving away from status, money and personal achievement toward balance, simplicity and connections. It’s not surprising to see that consumers continue to have financial concerns but there is a growing recognition that money alone won’t buy happiness. The ability to buy luxury items, which is traditionally a sign of status, is now seen by only 1/4 of the US population as an accurate indicator of living ‘the good life.’
The findings from the study identified four priorities that people now specify for living ‘the good life:’
Thankfully, these priorities are not limited to one or two demographics. They reach across generations, gender, region, income, politics and faiths. It’s heartening to see that these ideals matter to people in all walks of life and provide a common ground that the majority agree with.
So, what does this study mean for brands? The findings show that people want companies to help them live this new version of ‘the good life.’ In fact, they expect it. And, for those brands that do, 80% of consumers will reward them with their loyalty. Although 1/2 of consumers sense brands would like to help them with their goals, 2/3 struggle to identify brands that are succeeding in doing so. This disconnect can be seen across categories--from personal care to appliances/home to tech, not one category performed well against all four priorities. This shows that there is significant opportunity for companies that can deliver on helping consumers meet these unfulfilled needs.
It’s important to note, however, that success won’t automatically come just by having products and services that help consumers live ‘the good life.’ As marketers, we know all too well that consumer demand is complicated. Although 2/3 of US consumers believe in voting for change with their dollars, less than 1/3 said they purchase from companies who are helping them live ‘the good life.’ So, although some brands may be meeting consumer needs, they aren’t differentiating or communicating their benefits well enough. As always, those brands that are consumer-centric in their offerings and communications will benefit most from this opportunity.
As professionals and consumers, we can all do our part to redefine ‘the good life’ and contribute to bringing this new global vision to life, for everyone’s benefit. If you’d like to read the report in detail, you can find it here. And, if you’re interested in attending or getting involved with SB’18 Vancouver, you'll find the details here.
I was in a local mall at the beginning of December, not something I do often, and was surprised to see a heavily-discounted holiday season already in full swing. It reminded me of the challenges that retail, especially the bricks and mortar version, continues to experience. And I wondered how retailers had fared during the recent Black Friday through Cyber Monday promotional period.
In doing some quick research, I found out that the period delivered a higher number of shoppers in the US than expected—174 million Americans. Although it appears these shoppers spent more this year than last year, 60% said their purchases were driven primarily by sales. This annual discount period that retailers have created is succeeding in delivering traffic and transactions, but at what cost? In 2017, the discounts were offered earlier and went deeper than last year, thereby setting consumer expectations that they will see even better deals further into the holiday season. The question begs to be asked, “how low can they go?”
This problem is one that retailers have been facing and, ironically, fostering for years. The cumulative impact of this discount-dependent purchase behavior is that it can decimate a brand’s perceived value. As Robin Lewis (a retail strategist) said, back in 2012, “The paradox is that while the retail consensus is that consumers are ‘hooked’ on the ‘drug of sales,’ the longer and more persistently brands and retailers ‘push’ the drug, the more the process becomes an implicit admission that their brand or store is worth less.” And once they have reached that point, it’s something that can rarely be reversed.
Discounting is not the only problem plaguing retail these days. Consumer preference for online shopping continues. In this year’s Black Friday to Cyber Monday results, one-quarter of shoppers shopped in-store only, 40% shopped both in-store and online, and one-third shopped online only. Online shopping delivers a double-whammy to retailers. It makes it super easy for consumers to buy at the best price, plus allows them to bypass the in-store experience. When it comes to shopping, there are definitely times I like to avoid stores, especially during heavy promotional periods when the experience can be very unpleasant. But for a retailer, the store experience can be an opportunity to add some value back into their brand. While they can try to create value through their online experience, the in-store experience is becoming a missed opportunity more often.
As Seth Godin said, "The buying race is over. Amazon won. The shopping race, though, the struggle to create experiences that are worth paying for, that's just beginning." And some retailers are taking that to heart. For example, there’s a mall in Los Angeles that is attracting customers by giving them what they want—new discoveries and unique experiences in a photo-worthy environment. The results speak for themselves, as their tenants are on track to hit an average of $850 per sq. ft. in annual sales in 2017, compared to an estimated $165 per sq. ft. for shopping centres nationwide. Their focus on surprising and delighting consumers is paying off so well that they’re expanding at a time when many other retailers are going out of business.
As Warren Buffet once said, “Price is what you pay. Value is what you get.” With such a discount-heavy approach, most retailers have trained consumers to base their value squarely on price, and expect nothing more. And that has resulted in the “race to the bottom” that’s driving retailers out of business. However, there are some retailers who have created value for the consumer by delivering more than just deals. These stand-outs don’t need discounts to compete and succeed. They have broken the cycle and will reap the rewards of true value creation.
I recently read an article on LinkedIn where the author said she thinks the concept of brands will fade. She cited the rise of bots (e.g. Amazon’s Alexa) and the sharing economy as two forces that will render branding irrelevant. She also suggested that the concept of ‘unbranding’ is on the rise and gave two examples. Like many people who posted comments below the article, I have to disagree with her point of view.
I think the need for branding will continue to be vital. Yes, brands will face challenges, as consumer behavior and consumption patterns change due to technology. But branding is what a company stands for. It’s their value proposition to the consumer and, if done well, it’s clearly communicated and consistently delivered through the products and/or services a company provides. People buy from brands that deliver a value proposition that addresses their needs, which can be rational or emotional, or both. I just don’t see that changing.
To illustrate, let’s look at one of the examples of ‘unbranding’ the author identified in her article. It is a company called Brandless and yet, all their products are branded Brandless. Confusing, no? This company has a clearly defined value proposition, as outlined on their About Us page, which includes both functional and emotional benefits. So Brandless does stand for something and, therefore, is a brand. Currently, their products are only available through their website. But if Brandless were to expand their distribution and their products were available elsewhere, I bet their customers would still buy them. That’s because their customers understand what Brandless stands for and it meets their needs. That’s branding at work.
Yes, there are some categories where branding is less effective and required – a pencil, for example. The needs of consumers in those categories are very basic and the products have typically become commodities. And that’s always been the case. However, in many categories, consumers want more than a generic product from a faceless company. In fact, one thing consumers seem to be seeking more of from brands is meaning. The role of social causes looks to be on the rise in North America, according to two recent studies, especially among Millenials.
A recent Ipsos study showed that Canadians are more concerned than ever about corporate social initiatives. Half of Canadians are very interested in which causes companies support (up 4% since 2016). Almost half of consumers are loyal to brands that support good causes (48%, also up 4% from 2016). The brands that consumers think of first for their social efforts – Canadian Tire, Tim Horton’s and McDonald’s – have a long history of giving back and it has become a strong part of their branding.
In the US, a study called the Enso’s World Value Index shows that consumer preference for brands with meaning is even stronger among Millenials than older generations. This research looks at how Americans identify a brand’s purpose, how much that purpose aligns with their values and how much that purpose motivates brand advocacy and purchase. Brands that performed well with Millenials have clear, established missions, such as Starbucks and Honest Company. Given the size of the Millenial generation, having this kind of consumer connection can contribute greatly to a brand’s success, now and in the future.
Though ‘doing good’ can be rewarding for many brands, it’s crucial to stay true and consistent over time. There have been too many examples of brands who took a stand for or against something and then were exposed as frauds. The repercussions often outweigh any goodwill that a brand has built. A recent example is the financial firm behind the status of the fearless girl on Wall Street, which was caught underpaying women and minorities.
As you can see, I strongly believe that branding is here to stay. Technology will continue to change how we buy goods and services but it won’t change our desire to connect. Branding done well is how smart companies create and foster that connection. And, ultimately, that connection leads to sales.
I have a curious mind and many interests. I like to spend time musing about things marketing-related, as well as how technology impacts our world.