For some brands the coronavirus pandemic turned out to be a salvation, for others – a tragedy. In the case of these others, perhaps for the first time, marketers are faced with a dangerous crisis for business continuity, not communication. To survive, some fundamental strategies and activities have been used and – if one believes epidemiologists – these solutions might also come in handy in the future.
With the evolution of the pandemic situation, 17% of Polish people started to work remotely or semi-remotely (sharing work hours between the office and home), while about 20% were forced to take a leave or lost their jobs. This was enough to put strategies adopted by brands to the test. Isolated at home, we do not go to cinemas or restaurants and we visit stores only to satisfy basic needs. The unprecedented situation for the Polish market, with business survival and development are at stake, compelled brands and marketers to make quick decisions.
Analyzing the development of brand communication models and responsive actions, an analogy to shock phases immediately comes to mind (shock, emotional reaction, working on the situation and new solution). It’s a psychological concept illustrating our reaction to crisis situations and our ways of coping.
To survive and come out victorious in such situations, we often satisfy our needs according to Maslow’s hierarchy. Although his “pyramid” is an obsolete model and original conclusions do not hold under scrutiny, the needs themselves have not changed. Therefore, how do brands and marketers try to navigate their way in the pandemic world?
First and foremost, at the beginning of the pandemic marketers responded in one of three basic ways: fight, flight or freeze.
The first group of brands did not perceive the threat as a real one and behaved according to previously established scenarios – especially FMCG sector brands. The second group responded to the situation immediately, adapting not only their communication, but also their products to the new needs (and legal requirements, which were changing overnight).
The third group stopped all activities and waited for the story to unfold. This includes a vast majority of beauty brands.
None of these responses is inherently wrong, provided it is supported by analysis of the brand’s situation and potential risks connected with the new reality. Coronavirus, like nothing before it, verified the validity of a strategic or tactical approach towards brand building and proved that short-term thinking is simply a quick fix.
The biggest threat for brands turned out not to be the quarantine yet thinking from promotion to promotion and limiting strategies to a narrow range of resellers. Brands which have chosen these activities are struggling for survival, because their sales channels have been simply closed (or limited) and basing on promotions reduced the brand to the price of its product.
However, as the Nielsen and Mobile Institute study demonstrates, the quarantine has changed our shopping habits. Fearing the worst, after an initial shopping boom we started to save money, buying products in bigger packages or… their cheaper substitutes.
In the shock phase marketers had to examine their conscience in three areas: business; diversifying revenue streams and financial liquidation, brand; brand power and sales channel diversification and environment; the relevance to the current situation.
Producers of necessity goods found themselves in the best situation and I am not talking only about toilet paper, but also alcohol and electronics, which have increased their share in shopping habits by more than 10%.
Tip 1: As a marketer analyze your brand’s strength on the level of business, brand power and relevance. Define threats and opportunities and adopt a long- and short-term action plan.
Tip 2: In a crisis situation depend on data and premises. First and foremost, protect cash flow and do not abandon advertising activities – adjust the media mix to meet the current needs.
Cosmetics producers, developers and car manufacturers are in a more dire situation. It does not mean that their business went under – in today’s situation they have to face completely different needs of their customers. It was the need of community and solidarity that was driving us in the beginning and made us feel safe. Some brands related to this, thus building their relevance and, by the way, creating new products.
What’s your role?
Social expectations are hard to define, although it is far from impossible. Brands can maneuver within three types of such expectations: scenario, actors and audience.
When analyzing expectations in accordance to the scenario, one may ask “What should be done in such situation?” What social role can the brand take?” One may help doctors, small businesses, even their competition. For example, Agata furniture stores, donated money to support Polish medical professions.
The next expectation – defined by actors – forces marketers to investigate the role a brand usually plays and decide if it can be reinforced in the crisis times. Responsive action is a result of defining who the brand is and what social expectations it can meet in the first order: e.g. “entertainment” brands can primarily provide just that and only later – support hospitals. This kind of thinking made some brands join assisting hospitals immediately and prompted some to utilize their entertainment DNA and launch online concerts.
Third category – audience – begs the question if the surrounding environment, understood as brands or community, defines the actions (if yes, which?) expected of the brand. How can the brand take part? Examples: sewing masks, #stayathome, supporting hospitals etc.
It’s a fact of life that the first actor or the bigger actor is the one with advantage.
In a nutshell, being the first increases your chances of reaching the clients with your information. If you are bigger, you can impress the audience on a larger scale. This amounted to a rise in donations for medical care from 100k to 4m PLN. Are such activities helpful? Yes, if they meet the needs of the brand and clients in a given time.
Tip 3: In the time of crisis define your role – do you follow the social scenario, are you an actor or just an extra? In each role you have to be the first, the biggest or the most creative one.
Relevance in communication and business
Focusing on maintaining cash flow brought about a few types of actions. To begin with, brands reformatted their budgets and forecasts. Some – such as retail or delivery companies – adjusted them for increased business, the rest approached the issue based on scenarios. Considering we do not know what the future holds, our planning is predicated on the assumption that the pandemic will continue for some time, disappear and return in autumn. A significant number of brands decided to change their media mix, resigning from, for example, events, trials or sponsoring. For event companies it is catastrophic, for brands – necessary to sustain business effectiveness. A strong emphasis on digital activities can be observed, both on levels of investment in media and new channels of reaching customers.
Tip 4: Plan based on scenarios: positive, negative and repeatable. How will you react if the coronavirus does not let up? What will you do if it disappears? What will change if it reappears? It involves more work but will sustain business effectiveness.
Assuming that marketers have some savings for a rainy day (here risks of zero-based planning and overinvesting can clearly be seen) they are able to react quickly in the areas of creating new products and distribution channels.
A perfect example of such approach is given by cosmetic companies, which were hit very hard by the crisis. After a few weeks both Coty and L’Oreal adjusted their production lines to supply hand disinfecting gel. Additionally, L’Oreal conducted this activity in cooperation with Wyborowa Pernod Ricard.
A similar way of dealing with the situation was adopted by restaurants which are discovering a new business model – delivering ingredients which allow clients to prepare the meal themselves. Products are portioned and vacuum packed, thus the whole process is completely safe. Comparable flexibility can be observed looking at language schools and artists, who had to quickly adapt to online education and performing.
Beauty supply stores, in the light of current situations, have no reason to complain. A perfect example is Super-Pharm, which for years has been investing in loyalty programs and e-commerce. Yves Rocher offset the lockdown of brick and mortar stores with online sales. It proves that a digital transformation of a brand, if treated seriously, can really pay off in crisis situations.
Tip 5: Prepare a plan for the brand’s digital transformation. It does not mean starting a social media account but adapting the process of sales and customer service to a Web environment.
Relevance to the needs is key, but we have to remember that for the change to work there has to be either the need to own the product/service or the time necessary to form the habit. While watching a YouTube video is normal, online education is not that easily adopted. That’s why when building new sales channels and new services, we have to do it preemptively. We cannot let the reality surprise us.
Operate on many fronts
A great example of flexible activities “on many fronts” is provided by retail, which immediately implemented “new distribution channels” – cooperation with Glovo app and Click&Collect service, a bit forgotten, but still active in Poland. The latter is actually being added to brands’ mobile apps. As a part of creating new products, brands such as Kaufland offered sets of basic products in cooperation with tele-sales company Mango. “Stay at home” set contains basic food products like oil, flour or sweets.
In the situation where there are many battles to overcome, it’s wise to come back to the basics of business strategy and analyze, among others, growth strategies and identify key business categories.
Kaufland once again comes up – operating with existing product and within existing market (a quite competitive one) it had to build penetration, applying at the same time defensive strategies (protecting sales).
Such activities demand from marketers flexible thinking about brand communication, but primarily a return to strict business consideration relating to business strategies.
Tip 6: go back to basics – analyze undertaken and available growth strategies as well as your position on sustaining and developing your business.
Remember about advertising
While marketers’ decisions to freeze all activities mentioned at the beginning of this article have financial grounds, they are at the same time a short-term solution. Long-term thinking decision makers do not cut advertising spending following the rule of thumb that when the situation is good you can advertise, when it is bad – you have to.
Such approach has its foundation in observations. It’s obvious that brands’ share of mind shrinks in times of crisis, which is connected with two elements. The first one is decisions of marketers themselves, for whom cutting advertising budget is the easiest solution. The second reason is customers, who have other things on their minds than brands, which absorb their thoughts even less than usual. Less advertising brings about less clutter and observing ongoing media campaigns, a clear difference in their effectiveness can be seen.
Promotions run currently in the stores have visibly better effects as well. Polish people still go shopping (and more than a half still goes to work), but daily routine reduced to home and work made boredom a very important trigger driving our activity. This, in turn, can turn the crisis into profit.
Brands and marketers operating in crisis situation must remember about a few things. First and foremost, not all activities should be done by everybody, so a realistic approach to brand’s role in consumers’ life and distribution model threat analysis is required. Strategy of ceaseless promotions in cooperation with one reseller is just slowly eroding the brand and making it vulnerable to a crisis.
Diversification or an ownership sales network is key.
Brands which decided to create their own e-commerce some time ago, have no trouble with shifting the store traffic to online shopping platforms. There are actually reports about online stores being “clogged”, which proves that Polish e-commerce is unprepared for traffic of such scale.
Undoubtedly, the coronavirus is a harsh experience for many brands, especially those which have not reviewed their operating model. For others it is a driver of quick transformation in some areas. Sustaining business continuity has been linked with the need to create new services, products and investing in new channels of reaching potential customers.
Finally, building share of mind – brand awareness and power – turns out to be connected with real action taken for the sake of society like supporting medical professionals or the elderly. Recent studies about consumer expectations have shown that Polish people, especially the younger ones, expect the brands to give back to the community a part of the profit made on them. The coronavirus pandemic turns out to be one of those situations, when such activities can bring about not only image-related benefits, but also financial ones.