When I wrote my annual 5 Biggest Challenges for Brands in 2020 I – like everyone else in the world – did not make one of the topics global pandemic preparedness. That caught all brands by surprise. But the subjects that I did write about focusing on privacy, the end of cookies, the importance of collaboration, and responsibility in digital advertising, all proved to be pandemic proof. Brands needed to navigate those challenges all while trying to stay afloat during the lockdowns, panic, uncertainty, and death. It was a long year that I would not like to repeat.
The world that is emerging in 2021 looks more like what 2025 would have looked like if we hadn’t lost 2020 to covid-19. The virus is a societal accelerator that sped trends up while slowing time down. If you were a digital service already printing money, you printed (a lot) more of it. If you were a struggling retailer, you shut your doors for lockdowns and then for good. If you were a writer and digital communicator locked at home while working overtime with kids on both knees, you drank a lot more.
2021 is here now and vaccines are rolling out. Social media is covered with obligatory photos of people getting their jabs. With each injection we get one step closer to going back to some semblance of normality, and it will be a huge relief to no longer have to talk about severe respiratory infections or lockdowns or masks. 2021 will be a year when we rediscover many joys: dance parties, traveling, being jammed into ramen restaurants with barely enough room to move while slurping spicy tan tan men broth.
And business will get back to normal-ish. Stores will open again. Services will see demand rise. Events will be scheduled anew. But many trends from 2020 will become permanent. The role of the office will be put into question. eCommerce is not going anywhere. Brands will need to spend in digital to emerge. In the froth of the ultra-competitive marketscape, there will be many challenges – and just as many opportunities.
The challenges for 2021 build on the themes from previous years but they are tinted by a hue of urgency thanks to the accelerating pace of social and technological change. Defence is as critical as offense. Balance sheets are shifting to adapt to new realities. Creativity has never been more important. So here are 5 challenges that brands need to face in 2021 in order to succeed.
Resist the urge to cut spend
After the hit that balance sheets took last year, everyone has reviewed the possibilities of making cuts. Most businesses did, preferring to keep media spend to plug holes where sales were supposed to be. But not all businesses did. Some of them actually increased spending, and like the financial crisis of 2009, the brands that did spend will come out much stronger on the other side.
Brands that spy an opportunity should take the risk now to try to grab marketshare for three major reasons. First, spending during an economic crisis has proven great for brands because of a double positive effect. Fewer competitors means a cleaner context for your message to emerge, and media is cheaper since fewer competitors are buying. You get more views for your dollars without getting your message (as) lost in the advertising deluge. Advertising is rarely more efficient than it is in times like these.
Second, people crave normality in times of upheaval and uncertainty. A cheesy Coca-Cola commercial might feel a bit out of context given the circumstances, but if they ever wanted their advertisements to be aspirational to audiences depressed from a year of pandemic monotony, then there is nothing better than showing people dancing together without masks at a huge outdoor summer concert during golden hour, sharing a Coke. There is a reason that we see so few ads with people wearing masks (unless they are selling masks) – even though those ads were created firmly within the pandemic. 2021 is a year of hope, give people images of the world they want to see. Pin your brand to the coming hope and make it an integral part of the recovery.
Finally, every media dollar that is not spent right now means customers that don’t know about you and people who are not buying from you. There have never been more brands than right now – all of whom are clamoring for attention. Even among those who know you, your products can be substituted in a matter of hours via competitors delivered from Amazon Prime. Each day that you reduce or forego spend could leave lasting scars in your customer base. Tomorrow will only be more competitive, and thus more difficult to gain back lost ground. For brands looking to 2021 to recover, they are going to find that everything scales back up – except demand for their brand.
Maintain your margins
eCommerce exploded in 2020. With most of the world under some sort of lockdown to begin 2021, it’s only going to continue to go up from here. Sure, there will be binge shopping once the high streets start buzzing again sometime in the summer, but eCommerce is the foundation on which the future of business will be built. Brands who already had eBusiness capabilities during the pandemic saw just how powerful it became, and limited the cash loss from closed stores. Many grew their businesses over 2020 thanks to the pandemic pushing sales online.
No one needs to shake their finger at your brand to tell you to sell online. This is 2021 after all. But there are many different business models for eCommerce – and they are not cheap. eCommerce requires different logistics than traditional distribution. It requires different customer service infrastructure. It requires different legal expertise. And people are used to eCommerce being an extension of their desires – not necessarily an extension of your business.
This is where the Amazon Effect is palpable. Amazon’s approach and ubiquity have set nearly untouchable customer expectations: eCommerce needs to be frictionless, super fast, and erring on the side of the consumer. Plus Amazon has won the public’s confidence on pricing. To brands just starting out in eCommerce, the experience on offer will have bugs, take a long time, and will resist returns and refunds without onerous proof. All of this in the context of limited revenue while you try to get customers to buy your products online instead of in stores (and thereby having to justify adding delivery fees).
Each of these points will improve with time, just like your online sales. But the road to eCommerce profitability is long. You first start looking at how you can improve your user acquisition, and the quickest impulse is to start discounting. Discounts provide immediate improvement in acquisition campaign performance, and if your goal is order volume you will achieve it. You will also calculate the minimum order value that you would need to start offering free shipping to your customers. This depends heavily on the type of products you sell. Then you can look at loyalty programs and additional discounts that you can put in place for cross-selling to piggyback on your bestsellers.
Are you starting to see a pattern here? Each of these tactics to improve performance cuts into your margins. Even though you are selling direct to consumer – and thus with a much healthier margin than in a wholesale model – you still need to make enough money to keep your business running. Your individual brand calculus will tell you just how far you can go for the sake of volume, but if you can resist the urge to undercut yourself right out of the gate, you have a better chance of shortening the path to eCommerce profitability.
Differentiate with creativity
How can you keep your prices up? Take a page out of the luxury playbook. Improve desirability. There is a recipe for creating desirability. It is different from brand to brand but there are some constants. The most important constant is association. What do people associate your brand with? Values? Codes? Colors? A specific use case? Certain people like celebrities? Other brands? The ultimate goal is to get a positive answer to the question: do people associate your brand with coolness?
Everyone has a specific definition of what they consider to be cool, but again here there are some things that remain rather constant, and it’s easy to tell by the vocabulary that people use to describe brands if they think a brand is cool or not. People use words like “trendy” instead of “new” and “modern” to describe positive newness or launches. “Vintage” replaces “old” for classic brands. These adjectives do not come from the use of a product by itself, they must be constructed via the age-old branding exercise.
But that branding exercise is turning into a free-for-all in today’s attention economy. Not only do you need to get a message to someone, you need to get that message to stick. It has never been harder to emerge – especially online – than it will be in 2021. The content that you create – always the most important aspect of your marketing strategy – is still becoming more and more essential.
It’s amazing how visual trends can wash over entire industries. And in digital that means leveraging codes and technical capabilities of the platforms where communication is happening. Brands adopted Instagram’s pop color code. Now they are producing full screen videos with clever cuts on TikTok. Social players are offering increasingly rich augmented reality options for trying on products or immersing themselves in a brand universe (like Chanel’s Ask for the Moon filter).
Digital video and effects are constantly upending what we know about visual storytelling. Brands have never had more capability at their disposal for creating cutting-edge content. And they have no choice. Brands cycle through so many different campaigns and always on content that sooner or later many social feeds look the same, just not in the same order. For a brand to truly speak to new and existing audiences, they have to break into new creative territories.
It sounds daunting but there is some level of simplicity. Creativity is effectively connecting two or more things that have never been connected before (for you). I’m not advocating straying too far from your brand universe for the sake of standing out. But there are codes, designs, angles, ideas, positions, events, colors, products, people, literally endless possibilities of things to connect that can provide the differentiation you need to get your message to stick.
Easier said than done. The hard part is actually making it.
Include
You want a surefire way to differentiate your brand? Include people who don’t look like everyone else. I’m not talking about putting a Black woman or an Asian guy in your fashion show. Brands have been spending so much time building around perfect ideals that they can seem aloof to reality and who we are a people – citizens of planet Earth.
Ideals are important and can drive an aspirational level of brand image, but we are no longer living in a world that consists of solely huge format billboards. Ads are targeted and customized and arrive in the same places that people go to get news from their friends and family. Thanks to the endless onslaught, people have long been wise to the fact that ads do not reflect reality. But woke culture is eating into the mainstream. Ads that reflect impossible ideals are seen as insensitive, or worse, a deliberate attempt to undermine the confidence in people who do not – and cannot – ever look like that. Hewing to this ancient brand strategy will turn off more people than it attracts.
As much as you have a right to it, your opinion here is irrelevant. It’s now 2021, there are no more excuses for purveying a world in which nearly every human could never exist. People of color, of varying body types, with handicaps, have all been discriminated against in brand advertising since brand advertising began. We are starting to see rays of light here – the inclusion of down syndrome models, “real women” campaigns with varying body types – but overall the effort from the world of business is still laughable.
Now is the time. If you control any modicum of creativity, use your influence to push for inclusion. Make your brand image reflect the society in which it is rooted. The old guard of racists and bakers who refuse to make cakes for gay weddings is rapidly waning. Let’s build towards a better future together – and advertising is a big part of making that world happen.
Stay scandal free
Who doesn’t love a good scandal? Scandals are fuel that feeds social media. Scandals catch fire and burn, and like a wildfire, they light other things on fire. Brands are tinderboxes ready to be lit. Why?
If your brand has been around for generations, then there are probably a litany of sexual harassment cases (reported or unreported). As sad as it is, men who are in positions of power abuse that power (women do it too, of course, it’s just that they have many fewer opportunities thanks to the patriarchy’s anchorage in business). Women (and men) are stepping forward and using social media to call out their abusers.
If your brand has a supply chain that passes through a place like Xinjiang, Myanmar, or Turkey or Venezuela, you could be financing forced labor or providing revenue (via tariffs) for oppressive regimes. Most businesses don’t have very much visibility over the totality of their supply chains. They prefer it this way. Ignorance provides deniability. But consumers don’t see the difference. If the cotton in your Air Force One’s came from a Uyghur labor camp, consumers are going to blame Nike. All it takes is one employee or journalist unearthing one problem and the fire will be started.
If your brand associates itself with an influencer who turns out to have questionable morals, that can come back to bite you. People remember associations, and you cannot control people who you occasionally collaborate with. The whole point of collaboration is to leverage other people’s networks and allure. The new people you attract via that lever will forever hold that association in your mind. Vet, vet, vet.
And what is so difficult for brands is that public morality shifts. As the world addresses and rights its wrongs, we become more and more sensitive, yet no less determined. We attack injustices of today with the same oomph that was used for previous, much more egregious causes. We don’t know what the next flash points of public outcry will be exactly. But we know that it will be potent, and frequent.
Norms are shifting everywhere. Let’s start with the environment. Carbon footprints are being exposed. Soon it might be taboo to buy any vegetable that comes on a plane. Consumers will demand products that are 100% transparent – and they will punish brands that don’t comply. This requires constant retooling and balancing in production. The incentive to reduce costs must be weighed against the potential backlash. Outsourcing was once a savoir of business that drove monumental progress in Eastern and South Asian economies. Now it’s viewed as exploitative by consumers – even when the net effect is positive (lower prices in the West, thus more accessibility, and better paying jobs in developing nations). So not only do businesses need to evaluate their actions across an increasing number of moral criteria, they also must predict how those actions might be perceived in the coming years. As if you didn’t have enough to worry about!
And back to sexual harassment. Women have suffered, particularly in the business world, and they continue to suffer today. There was never a moral pass for sexual abuse no matter how “acceptable” it used to be, and there never should be. Finally, enough people are saying it out loud thanks to the #metoo movement. Hopefully, women today can apply this updated public perception and revisit those horrific events in the past. They should come forward, all of them who feel comfortable enough, and expose the old culture for what it was. Many of those perpetrating men still sit atop corporations today, and they should fall. Because sexual harassment was/is so rampant, statistically speaking that means that your brand will have to address it too, and if your CEO turns out to be a Harvey Weinstein, you can kiss your customer base good bye (and no one will cry about it).
Avoiding scandals means digging up and identifying issues before outside sources do. It means examining your supply chain, environmental impact, social positioning, and making sure that you root out bad actors – either internal or collaborators – to show that the moral fiber of your brand is active, not reactive.
And that’s the gist. There are multitudes of challenges that each brand will face in 2021, many that are not on this list. If there is one message to retain though it is that brands must be active and not reactive. Do not wait until the economy gets back on track to spend or invest in eCommerce. Do not wait for other brands to take your ideas and run with them. Do not wait for scandal to come to your door. Be daring, be aggressive, and be inclusive. In 2021, consumers will love you for it.
Tony Hymes 