February 10, 2020
Welcome back to your weekly update on the changes, trends, and movers-and-shakers making headlines across marketing, brand, consumers and more!
From Deepak’s neuroscience desk, how your brain is lying to you about Super Bowl ads, and what brain science teaches us about emotion management and conflict resolution.
Below are a few thought-provoking articles to kick-start your week. Thanks as always for reading, sharing and sending your contributions.
Brand & Marketing
- As the scene becomes more crowded, DTC founders are increasingly struggling to differentiate.
- The leaders of portfolio brands are forming groups with their counterparts — i.e., CMO Clubs with the CMOs of every brand — to share thoughts, strategies and tips to help crack the tough problems facing brands today. eMarketer sheds light on a pressing items top-of-mind for CMOs across categories right now.
- Graham Kenny provides a refresher on defining KPIs that actually align with, reflect, and incentivize behavior around your strategic priorities. In a similar vein, an Ehrenberg-Bass Institute leader discusses why company size needs to be considered when calculating growth targets.
- The latest US News & World 2020 Best Countries rankings are out, bolstering the theory that everything, even countries, are brands with “customers” or target audiences to be attentive to.
- Increased customer interaction can build competitive advantage and strengthen loyalty. Recent research from Deloitte shows new ways brands are generating value across product and customer life cycles through more dynamic, two-way engagement.
- Given today’s content consumers make up some of the most powerful audiences that brands have ever experienced, Kobi Ben-Meir offers tips on attracting the modern day consumer with context marketing.
- North Face is on a mission to design clothes that last forever – just the latest example of brands taking an ever-stronger stance around the future of our society and world. However, it’s unclear if consumers truly value and believe the claims of “purposeful” brands, meaning brands should be wary of bragging about doing the right thing, as confirmed by Morning Consult’s latest findings. Even still, Ellen Hammett argues that the onus is on marketers to demonstrate their commitment to doing responsible marketing and give reason to believe their motives are genuine and go beyond commercial gain.
- Despite all of this productive tension around purpose and impact, two professors remind us that we are nowhere near stakeholder capitalism.
- Kantar’s Nigel Hollis explains how adidas regained its sales momentum after significant sales declines and market share losses.
Retail, Sales and Shopper
- CB Insights maps the current state of Retail Tech, and suggests retailers’ new reality in 2020 as expectations for a more personal, immersive, and automated experience rise.
- Consulting POV – Retail technology continues to often be a solution in search of commercial vision – retailers that can harness this best will disproportionately win.
- Amazon is now allowing brands to develop custom and proprietary voices to connect with consumers via Alexa, making it easier for brands to connect with consumers while adding a new level of engagement for voice-based commerce. This comes as Amazon is also seeking to deepen relationships with its partner brands through advertising.
- Consulting POV – The voice broadening is a good idea, and should allow for much higher levels of engagement in voice applications. In the latest Retail Sound Bites episode, Kantar tackles Amazon’s rising advertising business and its specific implications for brands.
- Macy’s will be closing over 100 stores and cutting thousands of jobs as it looks to restore growth.
- Consulting POV – Macy’s remains a business that commands way more share of media than share of retail. They have had 10-20 ideas to restore growth in the 2010s; none have worked because none questions the fundamental problem with Macy’s, which is what is what job this store will do for consumers. As long as they keep shuffling deck chairs and not addressing that core issue, they’ll struggle.
- Meanwhile, Sephora is preparing for “record-setting” store expansion across North America, planning more new openings that it has in any other year.
- Consulting POV – Sephora is one of the best retailers in the world. It’s off-mall expansion strategy will be interesting for seeing which categories they emphasize in smaller, lower-volume sites.
- Forever 21 is set to be purchased by a consortium of buyers amid the chain’s struggles to raise money to exit bankruptcy, poor sales and the founding family’s insistence on maintaining control.
- Consulting POV – Simon Properties did a good job with its Aeropostale acquisition. The nice thing about a landlord buying a struggling retailer is they can adapt its fixed costs to meet the volume and operating cost of the outlet.
- In light of this, a look at why in the last decades more and more retailers are filing for bankruptcy…twice.
- Consulting POV – Bankruptcy allows you to restructure who you owe cash to, but doesn’t fix a business that doesn’t generate enough cash to cover its operations. So generally a retailer that emerges from bankruptcy is broken exactly the same way they were going in.
- James Shepherd posits that it’s not just the upstarts: everything is actually DTC now, meaning brand marketing strategies, agencies, and other teams must evolve accordingly.
- Consulting POV – Everything being D2C means everything is retail – demand conversion will be increasingly intertwined with demand creation in the 2020s.
On the Horizon
- Kantar’s Jane Ostler explores what’s changing media agencies this year.
- strategy+business provides some guidance on how to succeed in uncertain times, including avoiding defensiveness despite increasingly difficult environments.
- Goldman Sachs is potentially teaming up with Amazon to offer small businesses loans via the retail giant’s lending platform.
- Chobani is getting into alternative milks, with its oat-based and coffee creamer offerings the latest portfolio stretches.
- Spotify has purchased the Verge as it maintains focus on expanding its podcast content to grow its network.
- Bank of America’s record number of patents filed in 2019 suggests it’s entering a new era (and pace!) of innovation.
- CMO digs into why marketers need to embrace positive psychology (and cut the negative messaging) for better brand engagement.
- Alphabet’s recent performance – particularly weakening results in both its advertising and non-advertising domains – may mean the “wild growth years” are coming to an end.
- Related, how Google, Facebook, Microsoft, and Amazon have overtaken CPG, beer, and other common categories to become the most manipulative advertisers on TV.
- Remittance provider Remitly has launched Passbook, a digital banking solution for immigrants.
- HBR details how digital design influences user behavior, with even minor fixes generating significant ROI.