If the future of brands is about the tension between opposites – consolidation and disruption, data profusion and privacy, functionality and higher purpose – then the future has arrived, at least the thin edge of the wedge, just enough to discern a significantly different time, driven by the powerful forces of technology and globalization and more complex views of personal identity.Many categories are already illustrating these forces or are course-correcting for the future. As the two giant global brewers consolidate the beer category, thousands of craft beer brands are disrupting marketplaces worldwide. Leading telecom providers are combining to achieve scale and dominance, but as they expand into content and entertainment, smaller brands are picking off voice and data transmission.
Combustion engines and fossil fuel, grimy achievements of the industrial age, will be replaced over time, as carmakers transition into mobility service providers, still helping people get from place to place but using less – and cleaner – energy. Some physical stores now dense with merchandise displays will become retail showrooms for inspiring imagination. Regard for personal health will more strictly guide the choices we will make in categories such as fast food, soft drinks and personal care.
The young people of a rising middle class will influence change. Their aspirations for a better life, shaped by generational values, will include greater concern for personal health and the health of the planet, along with a predilection for sharing and community to balance traditions of ownership and individuality. This progressive vision coexists with retrogressive ideologies and instances of brutal inhumanity, suggesting that the path to the future continues to wind, as it always has, around blind curves and over terrifying obstacles.
Trust and the primacy of privacy
The issue of privacy, and the tensions between the absolute protection of private information and legitimate needs to share it, was most clearly dramatized by the conflict between Apple and the U.S. government. Apple argued that inviolate encryption was necessary to protect its brand, and customer private data. The FBI recognized those needs but asserted that they were outweighed by law enforcement’s responsibility to protect public safety.
Brands in most categories will contend with the growing complications of gathering data and protecting privacy. In the car and insurance categories, for example, telemetric devices, (also known as “black boxes”) that record and store driving statistics could have positive benefits. The recorded data can improve driving safety and increase the fairness of insurance premiums, aligning them more closely with actual driving habits. But the existence of the technology also raises questions, including: Who owns the data? and Who has access to it?
The Internet of Things describes the potential interconnection of all the devices and appliances that we interact with all day in every aspect of our lives – at home and work, and any place in between. Although the Internet of Things is still more of an idea than a reality, brands are rapidly developing devices to integrate themselves even more deeply into our lives, adding benefits like convenience and automatic product replenishment in exchange for more personal data.
With more private information being collected at multiple and potentially vulnerable connection points, trust in the brand becomes absolutely vital. Consumers are likely to select and be loyal to the brands that they believe stand as impenetrable sentinels of their privacy. They may rotate less trusted brands based on momentary utility.
Purpose and authenticity
Trust will need to be linked with purpose. Brands may not need a purpose as high as saving humanity. But they will need to demonstrate and communicate a reason for being. How this plays out across categories and brands may differ. In FMCG in particular, variants will need to add real benefits that enhance the lives of consumers, not simply the brand’s bottom line.
To be believable, a purpose will need to be relevant to the brand. When Nike talks about sustainability, it explains that the brand’s concern for the earth is rooted in a self-interested desire not to mess up this playground for professional athletes as well as the athlete in everyone. Communicating purpose will be complicated by the proliferation of media and the need to craft the same message multiple ways, remaining true to the brand while also resonating across diverse audiences. As brand guardians, agencies can play the pivotal role in defining and the interpreting the brand.
A brand’s purpose may seem like something people think about when they are no longer distracted by constant hunger pangs. It would be a mistake, however, to dismiss concern about purpose as merely a first-world, middle-class conceit. The desire for purpose seems to be a characteristic shared across humanity. And in the transparency of a connected world, everyone quickly sees how a brand honors – or dishonors – its purpose.
The talent prerequisite
Talent is a prerequisite for producing purposeful brands. Attracting talented people will be easier with opportunities to work on useful and worthwhile products and services that inspire passion and deliver real benefits, ethically and responsibly.
The alternative – product iterations intended only to meet aggressive annual growth rates – may lift the bottom line but deflate staff spirit. And cynicism is not a strategy for sustained success. Getting excited about selling stuff to people goes only so far. Talented people get excited because they care about the stuff being sold.
Marketers will need people with a different mix of talents. In the past, agencies looked mostly at the science of marketing and selling, but in the future, marketers will require a more entrepreneurial disposition. Effective marketing communication will depend on partnerships between the data scientists and the storytellers, those people finely attuned to cultural shifts who can identify and interpret important trends that will impact consumer behavior.
In diverse markets, such as India, which has 23 official languages and numerous cultural and regional differences, multinational brands will need to do a better job of understanding and responding to cultural nuances. Local brands are already delivering that level of insight, and customers increasingly expect it.
The challenge is relevant beyond fast-growing or emerging markets. It is particularly critical in the U.S., a nation of immigrants. And because of more porous borders and the greater possibilities for migration, voluntary or forced, many modern nations have become amalgamations of diverse peoples.
Brands traditionally homogenized the tastes of diverse groups into mass markets. Today, however, people maintain multiple identities, simultaneously assimilating into a larger culture while preserving their particularity. The ease of modern communication enables recent arrivals to remain connected to their nation of origin, resulting in multiple sub-markets and challenging brands to create more narrowly focused products and services and to communicate in culturally relevant ways.
Increasingly, multinationals will be challenged to achieve necessary economies of scale while satisfying local preferences, both in culturally diverse, fast-growing country markets, and more mature country markets where recent immigration patterns are producing much more fragmentation. The presence of better-quality local brands adds urgency, and makes it even more critical for multinationals to build and maintain strong brand and corporate reputations.
Fragmentation and choice
As societies become more ethnically and religiously diverse, they also are becoming more varied in family composition and more accepting of complexity in issues of gender and sexuality. The mass-market model of one-size-fits-all has fractured beyond repair. Brands will need to work harder to be consistent across all audiences while meeting the needs and communications styles of particular audiences.
Brands were built based on an industrial model of consistency and standardization. They simplified choice for the customer and process for the business. Future success requires a different, more complicated model able to deal with multiplicity. This opposite approach challenges existing brands and also opens market gaps for new brands.
Technology holds part of the solution to this conundrum of providing a more expansive range of items to satisfy the diverse cultural and demographic divisions both across and within nations. Simplification may begin to happen when the proliferation of choice meets the Internet of Things. Consumers will select certain items once, and then rely on automatic replenishment, freeing time to consider their purchases in high-engagement categories.
Brand owners can adopt a commodity production approach for items automatically replenished. That should free resources needed to identify discrete needs and create and market relevant products. Brands potentially will enjoy a combination of high-volume and high-margin sales at this intersection of big data and big ideas.
Brand Building Action Points1. Tell the brand story.
Strong brands will help future proof businesses. They will play a somewhat different but essential role in a future that presents consumers with greater choice. When some products are replenished automatically, consumers will rely more on brands for considered purchase decisions.
2. Push brand boundaries.
Revise the role of brand guardianship. It is no longer about simply being the regulator who enforces consistency. The role needs to be more entrepreneurial, less about policing the boundaries and more about pushing them to their limits. Being brand guardian means being open to new solutions such as creating a product or a service, not simply an ad.
3. Think outside the category.
Define the brand by what it does and the benefits it provides, not by the category that it conveniently sits in. Focus on real consumer needs and follow them. Think outside categories because they are less relevant as brands cross them to pursue new opportunities.
4. Follow your bliss, not the money.
Global reach and volume is not the only game in town. There are highly profitable, local brands that can carry on for years, generating value in the minds of consumers and in the stock market. Access to resources, including talent, technology and capital, used to require scale. Not anymore.
5. Take risks.
New metrics will be able to measure the success of social media and other digital marketing initiatives. A marketing idea with success measurements can turn a formerly risky venture – a start-up, for example – into an opportunity worth pursuing.