2012 – Uber and the rise (and fall) of the unicorns
Uber rolled into London in the summer of 2012, a month ahead of the Olympics, transforming not only the way we travel, but also ushering in the gig economy age.
Undercutting the traditional black cabs with its flexible workforce of drivers and slick app functionality, Uber quickly became the poster child for the emerging crop of disruptors hellbent on shaking up sectors everywhere from shaving to food delivery.
The brash and outspoken style of its co-founder Travis Kalanick caught the public imagination as an example of a young founder on a mission to upend the old modes of behaviour, pitching his business as a cross between “lifestyle and logistics”.
Soon this new breed of much-hyped disruptors were everywhere from Deliveroo, which unleashed its riders onto UK streets in 2013, to flexible office space provider WeWork, which opened its first location in London in 2014.
Riding high in the early years, Uber and its disruptor kin tapped into the consumer need for convenience in a mobile-first economy. This mission gave such companies the licence to flex their business models with brand extensions – most notably the launch of Uber Eats food delivery in 2014 – despite failing to prove they could turn a profit.
However, breaking the mould did not come without its risks. Brands like Uber and Deliveroo took a different approach to employment, hiring drivers and riders as ‘self-employed’ members of the gig economy. While the companies claimed this kind of work offered flexibility and freedom, criticism began to mount over workers’ rights, ending in damaging legal action.
Uber quickly became the poster child for the emerging crop of disruptors hellbent on shaking up sectors everywhere from shaving to food delivery.
Uber had its day in court, losing an appeal in a landmark ruling in 2018, which found that classifying its drivers as independent contractors was wrong and these workers were in fact entitled to holiday pay and the minimum wage.
At the same time corporate culture in the startup world came under the microscope like never before, with Kalanick proving to be one of the highest-profile casualties. He was forced to resign as Uber chief executive in June 2017 amid allegations he had overseen a toxic workplace culture characterised by gender discrimination and sexual harassment.
Attempting to put the corporate scandals and employment tribunals behind it – and still a loss-making business – Uber pushed ahead with its dream to go public. Valued at $82.4bn (£62.6bn) when it made its initial public offering (IPO) in May 2019, the ride-hailing giant notched up the biggest first-day dollar loss in US IPO history.
The reaction to Uber’s poorly received IPO foreshadowed the eventual collapse of WeWork’s prospects to go public, which were “indefinitely postponed” in September 2019 and the company’s founder Adam Neumann ousted.
Despite shaking up the way we order food, travel around cities and even the offices we work in, the unicorns (startups valued at more than $1bn) that took the world by storm at the start of the decade have experienced severe growing pains in recent years as they struggled to mature.
Now the future of Uber hangs in the balance after the firm was denied a licence to operate in London in November due to “repeated safety failures”, with the regulator describing the company as not a “fit and proper” licence holder. A far cry from the heady days of 2012. CR
2013 – Netflix brings us House of Cards
It’s easy to forget now, but Netflix started life as a DVD rental service in 1997. It wasn’t until 10 years later that the company began to shift its focus to online streaming services and, a few years after that, to producing its own content.
The big game-changing moment came in 2011, after Netflix bought the rights to show the first four seasons of Mad Men. Encouraged by stats from its database analysing renters’ DVD-viewing habits, the company made all the episodes available to watch at once. The great age of the binge was upon us.
By February 2013 Netflix was ready to go live with its first original series, House of Cards, which was launched to much commotion and acclaim. Based on a 1990 BBC drama, all 13 episodes of the political drama were made immediately available. By the end of that year’s first quarter, Netflix had 29.2 million subscribers.
A second original show, Hemlock Grove, was rather less successful, but a revival of the Fox series Arrested Development did well and by the middle of the decade Netflix had more than 50 million subscribers across the globe.
Original content remains a crucial part of the Netflix masterplan. The streaming giant spent $12bn on content in 2018, rising to a reported $15bn in 2019.
Buying in shows that then find new life on the platform has proved equally successful. Breaking Bad had been a critical hit on AMC, but only really when Netflix picked it up did the series enjoy worldwide popularity.
Netflix was ready to go live with its first original series, House of Cards, which was launched to much commotion and acclaim.
It wasn’t too long before TV companies were queuing up to get their shows streamed on Netflix, nor was it too long before many of the same companies began to think about setting up their own rival streaming services.
HBO launches its Max subscription-based platform in the US this coming spring, joining Disney+, Apple TV, BritBox and all the other contenders hoping to wrestle away some of Netflix’s 150-million strong subscriber base.
Netflix has played down the threat of the “streaming wars”, focusing instead on its investment in original content and taking its shows to cinematic release with a view to getting on an awards shortlist. The Irishman, directed by Martin Scorsese, was given a limited theatrical run in November, while Marriage Story was screened at New York’s Paris Theater, a cinema for which Netflix now holds the lease.
It was the popularity of shows like House of Cards, however, that kicked off Netflix’s original content push at the start of the decade and gave the streaming giant the confidence to go off platform in its pursuit of Oscar glory. MB
2013 – The publication of The Long and the Short of It
It is almost impossible to attend a conference or have a discussion about marketing effectiveness without the work of Les Binet and Peter Field coming up. In particular, their 2013 study for the IPA – The Long and the Short of It – which appears to be written into the strategy of almost any marketer or brand worth their salt.
Binet, group head of effectiveness at adam&eveDDB, and Field, a consultant and effectiveness expert, followed up 2007’s Marketing in the Era of Accountability with an analysis of the impact of timescales of effect, exploring the tension between activity that drives long-term brand building versus short-term sales.
As with any good report, it had a simple and workable takeout: on average brands should split their spend 60% long-term to 40% short-term.
The key is to understand the context into which this publication launched.
The marketing industry had become obsessed with tactics over strategy, efficiency over effectiveness. The rise of digital marketing and the ease with which the short-term could be measured had led a shift away from brand building. A lot of marketers were clapped on the back by the rest of the C-suite for focusing on ROI and driving up short-term sales, forgetting to measure the impact this was having on their brands over the long-term.
The publication of The Long and the Short of It and simplicity of that recommendation led many marketers to realise they were hugely over-investing in short-term. As economic and political uncertainty hit businesses, cheap and easy growth became harder to find and marketers that had spent years optimising in digital became aware they no longer had strong brands to fall back on.
It is almost impossible to attend a conference or have a discussion about marketing effectiveness without the work of Les Binet and Peter Field coming up.
Many have admitted to the errors of their ways. Adidas spoke recently about how a focus on efficiency and ROI rather than effectiveness led it to over-invest in performance marketing at the expense of brand building. It has spent the past four years trying to reverse this with a new marketing playbook, dubbed ‘Creating the new’ that puts emotional, brand-driving activity at the centre.
It is not the only one. Gap’s CFO has promised a shift back to brand building, admitting it had made the mistake of advertising its discounts rather than its brand on Old Navy and was now seeing the negative impacts. Booking Holdings and TripAdvisor have also said they are moving spending back to brand marketing after realising they were spending too much on performance marketing.
Now coined ‘The godfathers of marketing effectiveness’ Binet and Field have followed up their report with a dive into how this works for B2B brands, as well as trying to average out the right investment ratio for different sectors and companies of different sizes in different stages of growth.
In almost all cases, the data points to a need to refocus investment on brand. It’s a message winning companies are heeding. SV
2013 – Personalisation goes overground
It all began with Coca-Cola. The drinks giant went big on personalisation in 2013 with the ‘Share a Coke’ campaign, which encouraged consumers to find one of the thousands of Coke bottles with their name printed on it, share a drink with the people who matter most to them and then post their pictures on social media.
Share a Coke sparked a sharing frenzy across the nation and quickly became one of Coca-Cola’s most successful marketing campaigns. This translated into a value sales boost, up 4.9% year on year to £765m in the first 12 months after the campaign debuted. Volume sales for the Coca-Cola brand also grew 3.9%, while the company’s sales of all carbonates rose by 3.1% that summer.
Coca-Cola’s reputation and brand love also increased. YouGov’s BrandIndex index score – which measures a range of metrics including impression, quality, value, reputation and satisfaction – rose from 9.6 on the first day of the campaign (30 April 2013) to 12.4 on 10 September.
The Share a Coke campaign was not only hugely successfully for Coca-Cola, it inspired companies across a variety of sectors
A year on and the success of Share a Coke only grew. In 2014 the hashtag gained 998 million impressions on Twitter with 235,000 tweets from 111,000 fans using the #ShareaCoke hashtag and more than 150 million personalised bottles sold.
The Share a Coke campaign was not only hugely successfully for Coca-Cola, it inspired companies across a variety of sectors to experiment with personalisation and this trend shows no sign of slowing down.
You can now personalise everything from a bar of Cadbury’s chocolate to a premium KitKat to a bottle of Johnnie Walker whisky. Digital ads can be personalised with people’s names and locations, helping brands make their communications feel even more engaging.
Personalisation not only offers the opportunity to generate customer engagement, it also represents a chance to collect rich data on consumer preferences and build stronger connections. Marketers are more empowered than ever thanks to the amount of consumer data at their fingertips and their mainstream adoption of personalisation can all be traced back to Share a Coke. MF
2016 – BHS goes under
Alarm bells had been ringing on UK high streets for nearly a decade, but the 2015 sale of BHS – a 163 strong chain of department stores – for £1 seemed to capture the public imagination as a tipping point for the state of physical retail.
When the company finally hit the buffers just over a year later, the news was met with anger but little surprise.
Here was a popular mid-market department store, favoured for the quality of its home lighting ranges and a familiar sight to customers since 1928, disappearing in one fell swoop.
The winding up of BHS in 2016 left empty spaces in town centres across the UK, hastening further decline in some of the worst-hit locations. But if the closure of BHS was a significant moment in retail, it was preceded by the death of other former high street stalwarts such as Woolworths (2008), Comet (2012), Ethel Austin (2013) and Blockbuster (2014).
The collapse of BHS sparked a trail of destruction leading all the way to its previous owner Sir Philip Green and his Arcadia fashion empire, which this year secured a rescue plan involving the closure of 50 stores and 1,000 job losses.
According to the Centre for Retail Research, in 2019 alone more than 130,000 jobs have been lost in UK retail, with 16,337 stores shuttered. In 2018 the figures were even worse, with the sector losing nearly 138,000 jobs and more than 18,000 stores.
The fate of retail could be seen as a case of death by a thousand cuts.
The list of retail brands to have disappeared is a depressing one and doesn’t even include the high profile stores currently existing on life support.
Debenhams is fighting to keep its business out of the clutches of Mike Ashley’s Sports Direct, which bought department store rival House of Fraser out of administration in 2018. Meanwhile, Marks & Spencer plans to close more than 100 stores by 2022.
The fate of retail could be seen as a case of death by a thousand cuts. Retailers point to the high costs of running stores, including rents, business rates and increasing minimum pay levels.
Online rivals have certainly grabbed market share, offering convenience and competitive prices made possible by low costs (and surprisingly low tax bills). High streets have seen their appeal dented by the widespread closure of bank branches, increased parking costs, patchy public transport and even the boarding up of many public toilets.
A consortium of community organisations and companies has this month signed an open letter calling for action to halt the decline of high streets before it is too late. The ILC-UK Future of Ageing conference is even discussing whether older people might become the saviours of our high streets, by looking at new town centre lifestyles for the elderly.
To complicate matters further, retail problems have not been evenly distributed. Discount stores have been thriving and true luxury retailers are losing little sleep.
It is the mid-market that has suffered most, while stores that sell products from multiple brands, which are available elsewhere, are most vulnerable to online rivals. That means mid-market department stores and fashion chains need a substantial point of difference to remain in business.
Consumer behaviour is ultimately key and there lies the elephant in the room. Shoppers say they value local stores, love their high streets and want to spend their money with independent stores or established brands. But their shopping behaviour does not support this claim and the number of delivery vans crammed full of products from online retailers provides the proof. MV