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Key Takeaways

Born to lead

Taken as a whole, US brands have one thing in common on the world stage: everyone sees them as “leaders” and “shaking things up.” The average top US brand scores 120 on the former measure and 112 on the latter, where the average brand scores only 100. This shows that US brands have a distinct advantage over others if they are interested in trying something new or moving a category in a different direction.

I am a woman (gamer) hear me roar

If you’re looking for a place where old stereotypes and recent reality sharply diverge, you could do worse than gaming. With so many people playing today, the traditional image of a gamer has long been relegated to the dustbin of history. Today, half of all gamers are women. While they may not play the same titles as men, they represent a one billion strong audience with money to spend. While gaming platforms like Twitch may seem like an unlikely way to reach young women, they may be the best way of all.

Revenge of the big box

While we celebrate Amazon’s incredibly rapid ascent to become the most valuable brand in the world, you might think that its gain is traditional retailers’ pain. Certainly, there have been bankruptcies, Forever 21 among them, but Walmart, Target, and Best Buy all posted better-than-expected second quarters in 2019. The reason is that they have dug in around things Amazon can’t do as well. Walmart has emphasized its grocery offering in a big way in the country, enhancing its shopping experience with a speedy and convenient click and collect service. Best Buy, meanwhile, has embraced its staff of experts and eliminated pain points in the purchasing process. Whether smaller players can match strategies like these remains to be seen, but for now the Amazonian carnage has stopped including several large retailers.

The (slow) race to 5G

To its proponents, 5G makes sliced bread look like a modest advance in human convenience. They believe that with its dense, hyper-fast bandwidth, it will usher in an era of unlimited content consumption and interconnectivity. And that will happen… eventually. However, don’t be surprised if its adoption is slower and less universal than assumed. An uneven rollout with competing standards certainly seems to be in the mix for US consumers. And costs for the service are unclear. The initial devices made for it are certainly not cheap, and consumers may balk at getting a separate data plan for their connected refrigerators. As the Internet of Things has amply demonstrated, merely because something has the potential to disrupt doesn’t mean it will do so anytime soon.


Talk to me

The rapid adoption of smart speakers in the United States has been nothing less than impressive. At last count, 41 percent of households in the country are home to one, a jump of nearly 100 percent over the previous six months. This is not terribly surprising. Vendors like Amazon and Google have made their offerings inexpensive and easy to use. It also helps that there is a larger trend in the marketplace towards using voice as primary input device. By one estimate, 50 percent of all searches in 2020 will be done by voice. As humans get more and more used to talking to machines, the increase in efficiency and convenience will make such interfaces irresistible.

The low hanging fruit of packaging

As more and more brands adopt sustainable practices (and tell their customers all about them), they may find it a complex business. The apparel industry, for example, has developed something called the Higg Index, which helps its member companies understand exactly how sustainable they are being. However, there is one area where many brands can make improvements: packaging. That’s because it’s a discrete activity whose carbon impact can be easily measured. If your brand bags, boxes, or ships its products, a trip to your local packaging consulting firm may be a good move.

Time to bone up on blockchain

Distributed Ledger Technology (DLT) is certainly nothing new and will not transform marketing in the coming year, but it should be on every brand’s radar. The short reason is that it will likely become the backbone of the transaction layer of the Internet and a key technology in the secure management of supply chains and personal identities. A lot has to happen before we get there, but forewarned is forearmed, and understanding the development path of blockchain is a key requirement moving into 2020.

The better way to innovate

So, your brand is up against a handful of similar rivals. For you, innovation is all about survival and hopefully gaining market share. Looking for a roadmap to sustainable growth? A recent Kantar study, Innovating for Growth, found that it’s a great idea to make your entire category more valuable if you can. The obvious example of this is the iPhone, which took a relatively commoditized category and turned it into a must-have. So, if you possess a magic innovation wand and can see into the future, try not to merely beat your competition to the punch with incremental innovation, but also look for ways to make your entire industry more valuable in the eyes of consumers.

Which way, Apple?

This year something extremely notable happened at Apple: it released a product that was largely indistinguishable from the competition. The new offering was a sleek credit card that offered three percent cashback on Apple purchases. While this is nice for diehard Apple fans, it would be hard to imagine Steve Jobs getting up on stage and holding up one and saying, “And it comes with (pregnant pause) no late fees.” Some brand credit cards, like Amazon and Target, offer more cash back on purchases, while others, like Citibank’s Double Cashback card, offer larger overall discounts. Interestingly, 2020 also saw a drop in Apple’s brand value. It will be interesting to see if the brand can bounce back through its traditional strengths rather than foray into new categories, like finance.

Where are the children?

In 1967 just under half of all adults lived in households with children. A few years ago, the US Census Bureau studied the question again and uncovered a dramatic shift. It found that 71.3 percent of all adults live in a household without children. The change has been most dramatic in the 25-34 age bracket. In 1967 only 23.9 percent of people in that age group did not have children living with them, a number that more than doubled to 61.5 percent 50 years later. It’s not hard to think of reasons why. Faced with a variety of financial pressures and stagnant household income, young people today are putting off marriages and families. In particular, urban areas have become too expensive for families, leading them to be effectively no kid zones. This trend offers a variety of challenges and opportunities for brands (think adult-specific experiences), and at the very least it should serve as food for thought.

I’m a, big yawn, new parent

Marketers used to think of new moms and dads as young, full of energy and ready to take on anything. Thanks to a variety of reasons—better medical care, financial pressures, and later marriages—men and women in the US are having children at older ages than ever before. That means one thing: fatigue. Interrupted sleep and demanding feeding schedules have led to parental exhaustion, which is now recognized as a medical condition. The good news is that these drowsy moms and dads tend to be more financially secure and willing to pay for anything that could help their children. The bad news is that they’re also stressed and tired out. Smart strategies for reaching them might include making their lives and purchasing paths easier.

The hundred-mile rule

In 2012, the state of Kansas, under the leadership of Gov. Sam Brownback, took conservative, anti-tax principles to heart and vigorously slashed taxes. The rationale was that if Kansas made itself tax-friendly, business was sure to follow. The results showed otherwise: economic growth remained below average, government revenues fell, and schools and infrastructure projects lost funding. While politicians have pointed fingers in every imaginable direction for the failure, it would not have been a surprise to Bryan Gildenberg of Kantar, who notes that Americans’ connection to the global economy depends largely on where they live. When people live within 100 miles of a major body of water, they are far more likely to benefit from globalism. Cross that line, and you are likely to be in a rural area, dependent on traditional industries like mining, manufacturing, and agriculture. Kansas is a landlocked state. While it has a friendly, tolerant, and welcoming culture (“Meet a Muslim” events are quite popular there), by Gildenberg’s “hundred-mile rule,” most of it is too geographically challenged to attract the talent needed to spark major growth.

The perception of value

In the American butter market, Land O Lakes has long been the ruling brand. Go into any supermarket, and you’re almost certain to find one-pound bricks of its product sitting at a neat premium to store brands. However, recently, a new kid on the block has started to appear: startlingly expensive butter brands, often imported for some reason from Ireland. The differences in the two products are modest: American butter is usually made from cream, while Irish is made from slightly cultured cream. Does this mean that American palettes have grown so sophisticated that they can discern the difference between the two? Not really. Research has shown that consumers are likely to favor stores they view as premium, and products like Irish butter signal that quality, even though the rest of the shelf may be priced no differently than any competitors.

The DNVB revisited

The inaugural edition of this report contained a section devoted to digitally native vertical brands, or DNVBs. These were a range of new disruptors that focused on delivering a single product or category of products, with standouts including Casper, Warby Parker, and Blue Apron. Many of them were rapidly growing with exuberant net promoter scores and a level of personalization that their traditional competitors could not hope to match. However, by now, we can discern a predictable trajectory of where they will go, and for most of them it’s not world domination. Eventually, they run out of customers who are willing to embrace their digital business model. As a result, they end up doing one of two things. Either they sell out to a much larger established brand or start appearing in traditional retail channels. At that point, they stop being disruptive and join the herd.

Ready, set, dominate

If you want to know what young American brands are best at, it might just be losing money. In the second quarter of this year, for example, Uber managed to lose a staggering $5.24 billion. Its rival Lyft lost a mere $644 million. These mind-blowing sums of money have little to do with the efficiency or managerial competence of the brands. Rather they point to an aggressive American brand strategy that is reshaping not just the country, but the world at large. That strategy is all about reach and taking the entire global market by storm. At once. This requires massive amounts of cash, but it brings with it the promise of major returns. Whether these newer companies will succeed globally remains to be seen. But what is clear is that investors in these companies have a very healthy appetite for risk, because they see that the potential rewards are huge.