I’ve been watching the reaction from the advertising and effectiveness community on the growing Covid-19 crisis and the impact the pandemic is having on the investment strategy of brands. And so far I’ve been a little bemused.
Our industry, our country, is full of some of the finest marketing and strategic brains in the world. So I was, a little breathlessly I must admit, awaiting the insightful analysis of the situation and how brands could best react. But as yet, I remain…breathless? That’s not meant to sound as tasteless as it does.
The offering so far from our esteemed community appears to be a rehashing of analysis on ‘What happens when brands go dark in recessions’ (spoiler alert, it ends badly). Hmmm.
On the surface, this might seem useful. After all, what we’re experiencing is indeed a global drop in demand. But the analysis lacks the critical nuance that must be applied here, in this situation. This is not a recession. It might become one, but right now, it is a pandemic.
That means brands fall into one of three categories. Either their demand has gone through the roof, and their supply chain is tightening.
Or their demand has stayed pretty stable, but their supply chain is tightening.
Or their demand has gone through the floor and their supply chain is irrelevant (but if it wasn’t it would be tightening).
The commonality in this situation is not (yet) a drop in global demand. In fact, demand has shifted markedly across categories. The food we would have bought in restaurants we are now buying in Tesco and the basic amenities we would have bought on the high street we now buy on the sofa.
Our job right now is to serve our business, to bow down to our operations director, our COO.
Certain categories will suffer a material, but temporary, dip. Others will face catastrophic temporary dips, while others will experience long-term terminal decline that’s now accelerating. The cry of ‘I don’t wear make-up for other people, I wear make up for myself’ is being severely tested along with beauty sales and I’ve barely changed my hoodie for a fortnight – let alone considered buying new clothes.
No, the common issue for most brands for the foreseeable is supply. And that’s the new thing. Or new to us, children of a post-war era.
Brands are either facing a supply chain that is seizing up as the virus takes hold and vital resources are redirected, or a supply chain that can never hope to be as expandable as it needs to be for a sudden doubling, tripling or even quadrupling of demand, which may fall as quickly as it surged.
And so the solutions are not the same as for a recession. For once, supply must lead businesses, not demand.
I know this is hard for marketers to take and even harder for chief growth officers, chief revenue officers or the high wizard of demand generation. But our job right now is to serve our business, to bow down to our operations director, our COO.
We must use our skills to manage demand to best fit supply and that includes downwards. We need to do all we can to avoid the inflationary pressures that will inevitably be coming and rework our pricing models to try and sustain the customer value equation we’ve built so carefully.
We must work on our product and customer experience, so that even under the pressure of a patched-together supply chain and inflating material pricing, our brand is not damaged by reduced product quality.
Now is not the time for communication for most businesses and it can be tantamount to recklessness for some.
In a recession, communication can generate latent demand that will one day be realised. In a supply constrained situation, willy-nilly demand generation risks doing more harm than good to customers, to businesses, to your product and customer experience, and, most importantly, your brand.