Our coverage of the ‘trends’ for the year ahead is slightly different this year.
Yes, we are flagging what we think you should be spending your time and money on, and why, but equally it is a commitment from us to focus on these topics in 2021 to help you better navigate the year ahead.
There’s little point flagging these challenges as important without going the extra mile and offering analysis and insight into how to tackle them.
It’s part prediction, part rallying call, part contents for 2021.
Rather that throwing every possible idea at the wall and seeing what sticks, innovation had already begun shifting towards a more thoughtful mode when the pandemic hit. Brands were pivoting towards meaningful innovation that related more closely to their core proposition, rather than going off on a tangent just because they could.
This shift in thinking has been accelerated by the Covid-19 pandemic. If innovation took place at all, it moved from a sense of thoughtfulness to being far more targeted and selective.
Take Coca-Cola. In July the drinks giant suffered its steepest quarterly sales decline in 25 years, forcing CEO James Quincey to dub the coronavirus crisis the “toughest and most complex” period in the company’s history.
Coke’s response was to start weeding out “zombie brands”, so-called because they offer little opportunity for growth and were often confined to a single country. This constituted 200 brands that made up just 2% of the company’s revenue.
The brand cull helped Coca-Cola engage in more, rather than less, innovation. Revenue per innovation has already doubled compared to 2019, because efforts are targeted on the brands likely to deliver the most growth.
Speaking in October, Quincey said the reduction in Coke’s portfolio had allowed the team to bring “stronger innovation to the table”, tapping into local insight and leveraging the “most successful vehicles” to achieve it.
Elsewhere, snack giant Mondelēz announced in July plans for a 25% reduction in SKUs (stock keeping units), which represent less than 2% of global sales. The idea is to simplify its supply chain while continuing to push ahead with innovation.
Likewise, French food group Danone confirmed in November it plans to reduce its range by 10%-30% in 2021, dropping small products that account for less than 2% of sales. The intention is to reinvest 20%-30% of savings into growth initiatives.
Many other brands were forced to streamline their product portfolios as a consequence of Covid-challenged supply chains and found that slimmed down ranges could help them refocus.
At the start of the spring lockdown Morrisons, for example, reduced its bakery lines from 17 to seven, while Birds Eye streamlined its number of fish finger pack sizes, and independent coffee producer Union Coffee focused on supplying customers with its bestsellers to meet increased demand.
This continuing shift towards being selective will help brands across the marketing spectrum focus on what matters and place smarter bets on products where innovation could make a significant difference. CR
Be personal, not personalised
Just because you can do something doesn’t mean you should. It’s often said, but marketers should take particular note when it comes personalisation.
Gartner predicts that 80% of marketers who invested in personalisation will abandon their efforts by 2025 because of a lack of ROI, issues with customer data management or both.
A quarter of marketers (27%) believe data is the key obstacle, with many highlighting their weakness in data collection, integration and protection.
And that has only been exacerbated this year as brands accelerated digital transformation plans in response to the pandemic, which brought with it a wealth of additional first-party data.
Add to that the fact Google plans to phase out third-party cookies by 2022 and first-party data becomes even more important for brands. But marketers must be careful not to get carried away by this sudden influx of personal data.
Advances in technology mean it is possible to personalise pretty much every aspect of the customer journey and brands have invested a lot of money in trying to get it right. But rather than getting caught up with mass personalisation, marketers should be thinking about how to best serve customers and make the experience as seamless and intuitive as possible.
Being useful and helping customers find what they’re looking for at the right point in the purchase journey is far more likely to build lasting relationships than a personalised email.
Covid-19 has forced consumers to change their shopping habits and the way they interact with brands, particularly online, and for many the habits formed during lockdown will stick. While customer experience has long been on the agenda for brands, the pandemic has highlighted just how critical it is to get it right.
Being personal is about guiding people through a brand journey in a way that makes sense.
Brands should be using data to identify where any gaps may be occurring on this journey and then looking to fill these gaps in a very precise way. Understanding customers’ priorities and creating journeys that meet these requirements will in turn improve the customer experience and drive efficiencies.
P&G, for example, has built smart audience segments using more than 1 billion consumer IDs and has been doing propensity marketing with people who have similar characteristics. It is looking at precise groups like first-time mums or first-time washing machine owners, which allows it to reach the right people at the right time in the right place with the right message.
Ultimately, brands should be personal without being personalised. LT