We’re about to farewell another rollercoaster year. A year in which a cinematic ride into to the danger zone thrilled us, but also a year with its own real danger zone: the increasingly unsettling cost of living crisis, where businesses are being forced to interrogate their marketing strategies and rethink their growth ambitions.
In such an environment, it makes sense that many voices are hailing price as the most critical marketing lever. But is it the only option to stay afloat in these choppy waters?
While trading down might be rife, the fact remains that in several categories, people are coming off autopilot. Habits are being broken, routines are being rewired and perceptions being reframed. This creates receptivity towards new associations and, most importantly, signals a backdrop for brand connection.
What might happen if foresighted brands flipped the lens and saw this as an opening to chase new ways of growth, to boldly go forth rather than bunker down or default to cost cutting as an extreme survival tactic? Here are some inspirational lessons from brands that got it right:
1. New markets
The acceleration of online shopping saw many brands establish a permanent virtual shopfront, which presented a platform to cost-effectively venture into new geographies. A great example is luggage brand, July, who successfully moved their focus to the US when Australia was in lockdown and used the downtime for product design. The brand has now turned its attention back home – winning Australia’s fastest growing SME accolade and opening multiple retail outlets.
2. New partnerships
Smart brands know the value of collaboration. They use partnerships to pool resources, borrow equity and ultimately stand out. They find compelling ways to create new news and category gateways. Earlier this year, we saw Airbnb partner with BBC Studios to recreate the famous house from the hit children’s TV series Bluey. We also saw longer-term collabs such as Gucci x North Face kick off at the end of 2020 and continue till today with multiple joint collections.
3. New products or services
Game changers such as Uber and Amazon Kindle were launched during a recession. The pandemic has further shown how brands can adapt and flex at pace to give back in an empathetic way. Now is as good a time as any to innovate and cut through, to trigger new behaviours and value propositions that can make your brand memorable for life.
4. New brand extensions
The famous “lipstick effect” (which observed that lipstick sales tend to be inversely correlated to economic health) is continuing to prove its existence both conceptually and literally. Notoriously exclusive fashion house Hermes is expanding into accessible beauty by launching a lipstick in this downturn. Whilst still being one of the most expensive on the market, it provides a much-needed sense of escapism as a small indulgence during tough times.
5. New consumers
A forecasted slowing of ad spend growth in 2023 could be the catalyst to reach new consumers or go after niche cohorts as a test and learn opportunity. Efficient investment in a less noisy environment can be a way to maximise share of voice, helping defend against attrition or reap the rewards of stealing market share. We saw this in the case of PepsiCo growing revenue in 2020 whilst Coca-Cola chose to go dark – a move that saw its commercial gains go the opposite way.
If you are open to embracing this period of turbulence with optimism and a creative mindset, it can pay off for your brand. Now is the time to get the brains trust together, dust off the old whiteboard and explore the potential of your brand across all the 4Ps - not just the obvious one.
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