It’s becoming increasingly difficult for brands to define themselves today.
We see a merger of the physical with the digital, the online with the offline and the real with the virtual.
Ahmad Badr, EMEA Strategy Director at Siegel+Gale explains that it is not only transforming brand experiences, but also redefining the playing field of brands. Let’s consider the future: automotive brands will not sell cars; grocery retailers will produce everything they sell, TV networks will die, social media will be able to read our minds, and every brand will define itself as a tech brand.
Are you ready for this future? If not, read on.
The silver lining about this dramatic shift is it’s not happening overnight. BMW and Cadillac are moving from manufacturing to on-demand services while still producing and selling the cars that people have loved and expect from them.
But things are moving quickly. McKinsey reports that by 2030 revenue from car sales will drop to half, while the contribution from new digital services of the connected car will double. Google, Snap and Facebook are moving from software development to hardware production – personal assistants, goggles, drones, cars, etc. For Google, most of its revenue currently comes from advertising. However, after the launch of the first Google Pixel, hardware sales have started to grow, making a bigger contribution to the bottom line.
These businesses are redefining their playing field as they evolve, relying on the power of their brand to extend and expand. Over time, products that currently reflect the core expertise of the brand become marginal to the business while new ones take their place. The result is a complete shift in what they sell and how.
Making the leap
Bridging the gap between what makes money now and what makes money in the future is tricky. We believe it starts with brand.
The issue with most established brands is they tend to define themselves based on past behaviour rather than future ambitions. Their brand is designed to fit their current business model. But that sort of behaviour is troublesome – Nokia, Kodak, Blackberry, and Yahoo all know this too well.
The key is to create a responsive brand that can adapt to how the business needs to change. Designing for variability helps businesses avoid the modern marketing myopia that has plagued brands over the years.
How do you design for variability?
Understand why you’re successful. Identify the contribution of your brand to the business versus other factors such as product performance and price. Your brand can help take you into new places that you haven’t thought of before.
If you are known to produce safe cars, then people will trust that you can build safe drones. If people believe you run a sustainable grocery business, they will trust you with managing their money. If your culture is known to encourage innovation and diversity, then you’ll be able to attract talent that you haven’t traditionally employed. And so forth.
These are your brand’s equity drivers – elements that capture who you are, what you stand for and makes you unique. If used wisely, these become an asset to your business, helping you build new propositions that extend the life of your business.
Building brand fluidity
Marketers and advertisers repeatedly speak about this idea of single-mindedness: you need to focus on your target, what you do and hammer that in people’s minds. That holds true today but applying it requires caution: locking yourself into a narrow positioning and proposition can be deadly to your business.
In organising the world’s information, Google made a play for data in its broadest sense. When it felt that was too restrictive for its investments, and in order not to dilute the Google brand, it created Alphabet. SAP on the other hand says it helps the world run better and in doing that, has transformed from an enterprise resource planning provider to a cloud business, developing AI platforms to help businesses ‘run better’ – a proposition that is helping it grow without weakening its core equity.
Does your brand have the same stretch? If not, then it’s time to rethink your brand in relation to your long-term business plans.
The key is to build fluidity into your brand. How else will you be able to speak to new customers, attract new skillsets, develop new products, and compete with new players – mastering all of the things that will determine whether your business moves on to new heights, or comes to a halt?
In this ever-changing landscape, keeping your house in order is not an easy task. As you lay out your business strategy, investigate the role your brand plays in bringing it to life. With disruption just around the corner, don’t forget that your brand is a valuable asset that serves both as a safety net and catalyst for your business, giving you the space and means to keep moving forward.