CPG Brands must prepare to face 2020's Q4
This "new normal" has marketers and brand managers on what seems an endless roller coaster ride. To some brands, the constant fluctuation of financial markets in the past few months has been excruciating. Every piece of the puzzle had to be resized so that everything could function integrally again. CPG brands must rethink their whole modus operandi, cutting corners where it's needed and investing in what appears to be a promising future.
In a pre-COVID era, consumers preferred to go to the grocery store and avoid a few delivery fees. But today's consumers are turning to get their essential products digitally for safety reasons obviously, and of course convenience. But will they ever go back to traditional shopping?
With the need to seek alternative distribution channels, CPG brands are jumping on e-comm at an unforeseen rate. Thanks to online sites and apps like Amazon, Walmart.com, Target, and other delivery services, customers can still get what they need without having to leave their homes. The market size for online grocery in the U.S. pre-COVID was estimated to be between $20 – $26 billion annually. Online grocers are doing their best to get as many products as they can list in their e-comm platforms. It's important to note that the selection of available products in a platform will determine consumers choice of e-comm platform to shop in. So, for CPG brands, it's just safer to be listed in as many as possible.
A McKinsey report suggests leaders in charge of CPG brands should act soon to manage disruptive changes related to consumer behavior, category consumption, and channel selection. The frequency in which consumers visit shops, brand preferences, and media consumption have also had their fair share of alterations.
I want to focus on key areas where brands must work to secure this year's Q4 profitability. Companies are still on time to make a great comeback. But they must act now. Every effort brands make should also be a step in the right direction. Persistence will take CPG parent companies to the next level. Brand managers and marketers will be looking back and this time, and they'll know that the way they reacted to the crisis is what led all of them not only to survive but to prosper.
Brand building
It seems almost silly to be reminding brand managers about brand building. However, in times of crisis, some tend to panic and suspend marketing efforts based on emotional fears. Putting Brand building on the back burner will leave you with long term consequences. According to the Advertisement Research Foundation, brands that go dark in an economic downturn take five years on average to recover their market share.
Brand Managers must read the room and pay close attention to planning on post-COVID efforts. Reorienting a brand's business strategy is crucial to overcome the challenges we are presented with today.
If there's truly no cash to mess around with, we must do as the famous scientist Ernest Rutherford once said, "we haven't got the money, so we'll have to think?". Getting creative with a brand's strategy doesn't have to take months or a stratospheric marketing budget. Ask yourselves what's being helpful and what's not. It's acting with speed over perfection. Your audience is always listening. So, what are you putting out there?
Storytelling sometimes just isn't enough, as Lee Yohn says, brands have to stop only storytelling and start story-doing, your audience will deeply value it and feel engaged with your brand. Attract your customers' attention with constant communication outflow through your brand's social profiles and digital campaigns. Focus on highlighting your products' benefits, show your audience what makes you the best, and shine above your competitors.
Where Global Markets, Shopping Holidays, and the Low touch economy collide.
Global markets are having to reorganize their supply chains and manufacturing capabilities. Western and Asian markets have both been coping through tough times since last year. There's no clear forecast written for this year's Q4. Brands and Marketers need to stop over analyzing every possible economic outlook and start readjusting their operations to reach their goals and overthrow the competition in the next "shopping" holidays.
Companies still have ahead several shopping holidays where they need to bring their A-game. Prime Day, Black Friday, Cyber Monday, and Christmas are around the corner. Start preparing your products' eye-catching special editions for every upcoming shopping holiday.
This year looks like Christmas will be mainly celebrated online. Thanks to the newly introduced Low touch economy, operations will have to be tailored to comply with all safety measures and avoid touching as much as possible. Businesses are likely to deal with these protocols at least until 2021. As leaders, we must assess the situation, develop a strategy, and go full offense. Integrate innovative trends such as experience-based shopping. Focus on sustainability, P&G is a great example; they've extended their efforts to reduce plastic packaging, and they're killing it!
Reforecast and adapt. Reevaluate your SKU portfolio, allocate resources to top performer products and proceed to dismiss those that are not performing as you'd expect. Be smart with your marketing budget. Relocate it to support your ads on popular social platforms. This will surely increase your conversion rates.
Advertisements are not only meant to drive purchases today, but they're also an investment towards your brand's future. What you do will impact your brand's relevance among your target consumers.
Probiotics and over the counter medicines are flying off real-life and digital shelves. Everything self-care-related is more likely to get noticed, and there's plant-based whatever you can imagine. Customers are demanding more pet products to spoil their beloved companions at home. And most of these transactions are taking place on e-comm.
Even if your brand is thriving despite current circumstances, it's not the time to reduce your investments to streamline ads on social platforms. I'm telling you guys, this is not the time to pull the plug! Use this period as an opportunity to experiment and be creative with your content. Test will be crucial, and focus on maintaining your brand's awareness and customer loyalty. If your competitors are reducing their add investment, your ad- spend is likely to get more attention and exposure for your buck.
Creative agencies must recognize their clients' needs and strive to deliver the best content to appeal to each brand's audience. Leverage the power of content, partner with the right people. Influencers are a great way to interact, especially in niche markets. If your brand is not already on TikTok you are missing out on all the fun. TikTok challenges can be hilarious and viewers love it. I am truly starting to be a fan of the platform.
Power brands must be agile to become fluent in e-comm platforms to maintain and gain online market share. According to Digital Commerce, 31% of U.S. households used an online grocery delivery or pickup service during March. I do not know about you but I was a contributor to that number spiking!
Today, your customer's digital experience is your primary marketing channel. Be sure to give you channels the credit they deserve while enhancing consumers' journey to provide a painless shopping experience.
As the CEO of a Creative Content Power-house, I know it can sometimes be tough to face and address every upcoming challenge. Some companies entered the pandemic as a kind of company and will come out as another. The art of evolving and sculpting your company to the current reality and nearby future will keep you relevant.
121 is the Content Factory for many Fortune 500 companies. We provide day-to-day content for power brands owned by Reckitt Benckiser, P&G, and Nestle, to name a few. We want consumers to ask for a brand specifically. Leverage the brand social outlets to drive traffic to their e-comm profiles. Make sure the brand has appealing A+ content and killer CGIs to genuinely bring the product to life.
This is my 2 cents to all brand managers out there. Look around. Everything your company does is Marketing. Every interaction with anybody inside or outside of your company influences whether someone will do business with you now or in the future. Be present, and stay relevant!
Yours sincerely, Francisco Serrano.