Month: July 2015

Why we are looking at an integrated future where fashion and technology brands combine?

First let’s crunch some numbers.US $15.4 Billion. That was Google’s Net Profit for the first quarter of 2014. LVMH, the world’s leading fashion house, gets nowhere close even with a full two years revenue combined. Google’s foray into fashion may not have been spectacular (now with Google Glass defunct) but it certainly set the tone for technology brands to walk the fashion ramp, with panache.

Earlier this year in April when Apple launched the much touted and awaited Apple Watch, with a price tag going upto US$10000 for the Gold edition (the Sport edition started from US$349), the brand made it’s first serious foray into the luxury fashion space which it has been in relentless pursuit of. Wearable technology (with a price tag of course)!

Amazon, the always on go to destination e commerce brand, steam rolls ahead as it strives to become a US$200 billion business and fashion is at the forefront of its e-commerce store front. Not only does it E-Tail fashion vide its Amazon Fashion site but it has also acquired fashion retailing sites like Zappos and Shopbop to augment its sales. Added to that, it is now the official sponsor brand for the New York Men’s Wear Fashion week and has also roped in former Vogue Editor Caroline Palmer to help with its editorial output. In between all of these, it also opened a 40000 square feet photography studio in Brooklyn.

Yahoo, the ubiquitous, multinational content internet corporation very recently launched Yahoo Style, which by its own admission is positioned as a “ fresh take on fashion for everyone, from enthusiasts to those who love it from the sidelines”. With more than 800 million global users, no fashion site can match the reach and enormity of Yahoo, which is precisely what the brand is planning to do. It has poached American Elle Creative Director Joe Zee who is very clear on embracing the new levels (and possibilities) of communication and technology to create an utterly new brand positioning for the internet giant.

Technology brands like Google, Yahoo, Amazon etc are very well placed to understand consumer insights, behavior and purchase patterns on a real time basis. They are an integral part of people’s conversations and engagements and in the process have a wealth of data acquired over several years to play with which is not usually the preserve of conventional brands. How that data is used to integrate fashion into the mix is therefore quite an easy game for these technology brands.

Its very difficult to speculate on how technology’s relationship with fashion brands will evolve and grow as advancements in both industries happen much faster than anyone can predict, but what can be assured is that what moves units at brick and mortar stores, what happens within your favorite magazines and what soars on social media after fashion week will provide a pretty strong indicator.

On the flip side fashion brands, the early adopters like Ralph Lauren and Burberry have used technology to drive equity, recall, enigma and sales but it has not been all pervasive across the sector. There are still a lot of brands just dipping their toes in the water even though fashion has the resources, time and money to control the industry. Having said that, I reckon the first steps towards an integrated future of fashion and tech has been taken.

ENDS.

Image: editorialist.com

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Why brands could do with a bit of hypothesis? Go Beyond (S)lip Service on Corporate Social Responsibility!

Corporate social responsibility for brands and organisations is no longer an obligation. Its a compelling strategy. It’s a no brainer. Over the years and especially in the recent past, brands that have known to be doing good to society and its constituents have consistently done well and build a larger and more loyal following of customers.  And that, in this era of price loyalty being > brand loyalty, is certainly a big take away for smart brands.

So, given the positive rub offs that compassionate capitalism brings to the table, lets imagine a few scenarios where brands of the day(especially the ones that are in a definite position to do so) indulge in some serious introspection(soul searching if you will) and decide to disrupt their existing mold. Readers please note that this is purely hypothesis and we are taking the liberty of conceiving a ‘ what if ‘ scenario. We are talking brands and corporates picking up the threads on social responsibility, sharing and caring.

I will begin with one of my favorite subjects: credit cards. I do not claim to be an expert on the BFSI (Banking, Financial Services, Insurance) space but here is my two cents worth. Lets imagine a situation whereby the likes of a Mastercard or Visa, two of the biggest global brands in the credit card industry decide to recalibrate their line and approach of communication. Just go in with the honest intention of meaning, doing well and being social caring and responsible. (We are aware that the credit card industry is driven and conditioned by their partner/issuing banks to drive more numbers, more interest charges, late payment fees, interest upon interest etc etc all seemingly communicated in the ‘ Welcome Kit ‘ folder in an unfriendly barely readable 6.5 font size). In the light of such an eco system, what if MasterCard or Visa initiate a communication strategy that says ‘ Do Not Use Credit Cards ‘( I am aware that some of you might already be thinking that I have gone senile but do hear me out!). The objective from the brands’ perspective is to communicate that credit cards are not be used in the manner that a large majority of customers use them leading to debt traps. The communication can be consistently put across by either Visa or Mastercard educating and encouraging people to use credit cards the right way. Will it lead to loss of revenues for the issuers? Am not so certain but it will definitely bring in a huge amount of goodwill to the brands. Not just that, this honest, transparent socially responsible approach could also broaden the universe of users and bring in more customers who were hitherto wary of using credit cards.  The end could very well justify the means.

Lets take up another potential situation with the darling of the technology brand space: Apple, arguably the most valuable company in the world. Here again, we are aware of Apple’s skirmishes with questionable labour practices at the companies it outsources it’s hardware manufacturing to (FoxConn), the use of certain minerals and more pertinently its insistence on using proprietary technology (in an era of open source and easy standardization) to keep its profit margins really high. Not to mention its very cheap design for their power chords(certainly less power to them!). Now, lets turn the tables and look at a scenario where the world’s biggest and most profitable technology company decides to use its resources to deliver a consistent, satisfactory experience to its customer base, end to end. Become also the number one global brand to walk the walk on corporate social responsibility. Can you fathom the huge surge in goodwill equity that the Apple brand will reap from millions of its loyal customers the world over? There is a great opportunity for the brand to become the apple of every stakeholder’s eye!

Carrying on in the same vein, could we expect more humanity and compassion from airline brands especially when they have to repatriate dead bodies. Based on load and carrying capacity, could the near and dear ones of the deceased expect a really preferential rate and treatment in their hour of grief and get treated as humans and not ‘ premium perishable cargo ‘ that can be milked for all that its worth. The airline brands can give a respectable send off to the departed soul and in the process their brand reputation and goodwill can go sky high. Being a socially responsible and caring brand can only augment market share, customer engagement and loyalty. CSR can also mean Corporate Social Return for brands if done the right, sincere way.

More and more brands are seeing and reaping the benefits of by design genuine benevolence as customers recognize and respect their social efforts and reward them with more loyalty and positive WOM(Word Of Mouth). That being the case, what are you waiting for? Social Responsibility and Corporates: The Twain Has to Meet!

ENDS

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Why Demographics May Be Irrelevant for Brands: Welcome to a Post Demographic (Geography is History) Era!

Historically, brands and marketers have sworn its allegiance to demographics. Like the proverbial Tweedle Dee and Tweedle Dum. But, there just might be a twist in the tale. As quoted by Trendwatching: You’re not the only one who’s confused by consumer behavior. Consumers themselves aren’t behaving as they ‘should’.

In a post demographic era of consumerism, is it time to throw out the traditional (and tired, tired and rusted) demographic models of consumer behavior?

Lets look at some really interesting snippets that break all moulds of convention:

In the UK, women now account for the majority of video game players, and there are more gamers aged over 44 than under 18: IAB (INTERNET ADVERTISING BUREAU), SEPTEMBER 2014

Twitter’s fastest growing demographic between 2012 and 2013 was the 55-64 year age bracket, growing 79%: BUFFER, JULY 2013

Asilo Padre Cacique, a retirement home in Porto Alegre, Brazil, hosted an activity day for its elderly residents in September 2014, featuring a skateboard exhibition and graffiti artists. Yes, you read right: skateboard exhibition and graffiti artists.

“If you look at the list of the 1,000 favourite artists for 60-year-olds and the 1,000 favourite artists for 13-year-olds, there is a 40% overlap.”: GEORGE ERGATOUDIS (HEAD OF MUSIC, BBC RADIO 1), MAY 2014

All of the above may seem disconnected but it does give us a peep into where consumerism is headed. And it is not at the happy intersection of demographic centred models which brands have comfortably honed over the past several decades. This is a new path to tread. Consumption patterns are no longer defined by ‘traditional’ demographic segments such as age, gender, location, income, family status and more. In this era of post demographic consumerism, brands are realizing that people across all age groups, across multiple markets are constructing their own identities and that too more freely than ever before.

Yes, we still do have our usual suspects: the early adopters of products and services that brands love: Young, affluent, influential, loves experimenting and burdened with lesser commitments. This is (as empirically proven) the ideal scenario.

But, as more and more brands and marketers wake up to the new reality: that any and all revolutionary – or simply just compelling – innovations will be rapidly adopted by, and/or almost instantly reshape the expectations of, any and all demographics. Without bias or prejudice. One size need not fit all or it just could!!

The always on Society is now too fluid, ideas now too easily available, the market now too efficient, the risk and cost of trying new things now too low (led by the digital world, but increasingly the case for physical products too) for this not to be the case. Let us understand why.

Today’s consumers – of all demographics and in all markets – increasingly buy, source and use products and services from the same mega-brands: Apple, Facebook, Amazon (the technology sector is especially universal), IKEA, McDonald’s, Uniqlo, Nike and more.

The ubiquity and collective familiarity with these global mega-brands, when combined with the global reach of consumer information, has also created if not a shared consciousness then certainly a new level of POST-DEMOGRAPHIC shared experience for consumers, from 16 to 60 and beyond and from Boston to Beijing, Capetown to Melbourne.

So what should executives and brand marketers look at doing to come to speed with this new reality. Well there are a few innovation opportunities waiting to be grasped:

Fall in love with the new normal: Embrace and celebrate new racial, social, cultural and sexual norms.

Let heritage not be a baggage: Be prepared to re-examine and even overturn your brand heritage.

Inorganic demographic pollination: Go beyond your comfort demographic zones. Explore foreign demographics hitherto not tapped into for ideas and inspiration.

Borrow from the Long Tail effect: Explore smaller niches of interest. There is serious potential resident there.

As we move into the future, successful products, services and brands will transcend and move beyond their initial demographics almost instantaneously. Brand executives who continue to attempt to navigate using demographic maps, with borders defined by age, gender, location, income will be under-prepared for the speed, magnitude and direction of change.

There is no doubt that understanding consumers’ needs and wants remains critical (Consumer Insight & Market Research companies will go out of business otherwise, isn’t it?).However, it will be those that take a broad view and learn from innovations that are delighting consumers in seemingly dissimilar or even opposing demographics that will succeed, regardless of which ‘traditional’ demographic(s) they serve.

Demographics are dead. Long live demographics!!

Why the pandemonium? $26 Billion Dollars in business at stake for ad agencies. So why not?

Coke, Johnson & Johnson, Unilever, P&G, Mondelez International: These mega brands will ring many a bell. And to many global ad agency networks alarm bells. What with almost US$26 Billion (based on a Morgan Stanley report released last month in June) of ad agency business all set to switch places this very year. Madison Avenue is going mad in the quest for the right strategy: defence or offense? Either way, there is no sitting on the fence!

This battle for clients and billings, has been dubbed “Mediapalooza” or“Reviewageddon” by media and industry insiders. (You can bet the industry is never shy on jargon or coinage). But the time has come now for Madison Avenue advertising czars to truly go beyond word play!

Digital advertising is having a field day and there is speculation that the entire pandemonium begin at its door. With the accelerating shift to Digital Advertising and the real time measurability and analytics that it provides to brands and marketers, more bang for the advertising buck has taken on a completely new dimension.

Clients use the ‘ account under review ‘ strategy to get its incumbent agency or its successor to tighten up and augment value and save on costs. Consolidation and mergers will pick up steam in the coming days as agencies scramble to defend, acquire or lose clients who are demanding far more than they have conventionally done (and getting it). Agencies are getting ready to both hit and take the hit.

The stakes are high and the larger they are, the higher it gets. Its never got any bigger for the likes of WPP, Publicis, Omnicom, Dentsu, Havas and the like. So as they court each other to outdo, outbid, outperform, they have to remain on top of the ball and use kid gloves to retain or win clients who seem to be otherwise developing the cold feet syndrome.

So fasten your seat belts.The next few weeks will see incredible activity as ad agencies prepare, pitch, poach, preach, promise…the 5Ps of a different kind! Till then, peace be upon all of us.

 

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