Why the future of branding is brighter than ever

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For this last number of our series on branding and brand growth (published originally in French in INfluencia, accessible here), we’d like to take a step back. Or, to be more accurate, a step forward.

To a near future where Artificial Intelligence (AI) plays a more central role. A future where Augmented Reality (AR), Virtual Reality (VR) and Mixed Reality (MR) have revolutionized the way consumers shop by rendering the path to purchase more immersive, sensorial, and personalized. A future where search has gone from text to voice. And most importantly, a future where intelligent personal assistants (Amazon’s Alexa, Microsoft’s Cortana, Apple’s Siri, Google’s Assistant, Facebook’s M) play an increasingly predominant role in consumers’ purchasing decisions. This is the future where Doug Stephens (futurist and author of the Retail Revival and Reengineering Retail) predicts that up to 25% of consumer decisions will be relegated entirely to technology by 2025, a subset of the economy he dubs the replenishment economy.

In this future, one simply needs to tell Alexa to order a lightbulb, and “shazam!”, the lightbulb is ordered, packed, shipped, and paid for automatically. And guess what brand Alexa will order, pack, ship and pay for unless told otherwise? You guessed it, AmazonBasics!

For branding experts, this poses several interesting (and quite frankly existential) questions.

1/ What is the role of a brand in a world where purchasing decisions (at least for certain products) are automated, and managed by intelligent assistants?

2/ What does brand-building look like in a world where actively choosing a brand is optional, no longer mandatory?

3/ How will this affect brand loyalty? Will the notion of brand loyalty be (further) devoid of meaning?

It is our opinion that branding will become an even more important lifeline than it is today.  Make no mistake, the future is branded!

Brands will need to convince consumers to choose them over a sea of competitors. E-commerce has done a formable job in opening up the amount of brands that compete at the same point of purchase. If you are an apparel brand sold in a department store, you may have to emerge over 10 competitors. On Amazon, the number is more likely to be close to a hundred!

Equally important, brands will need to be strong enough to persuade the consumer to make a choice at all! For consumers that have become increasingly used to a fluid, simple and quick purchasing journey, how many will opt to add this additional step? Brands will need to provide the consumer with a reason, a why, for actively choosing the brand instead of defaulting to the choice provided by the intelligent assistant.

But before we go further, let’s rewind. In our previous articles we covered the following key forces of brand growth:

1/ The “penetration or loyalty” marketing rhetoric is harming your brand’s growth potential. As demonstrated by Byron Sharp, in his series of books “How Brands Grow”, penetration is the name of the game, and loyalty is mostly a collateral benefit. In other words, brand growth comes with increased penetration, and increased loyalty comes with increased penetration. Brand growth quite simply depends on a single core objective: increased penetration.

2/ The “differentiate or die” rhetoric is another marketing mantra that is missing the mark. It alludes to a world where brands are clearly delineated and contrasted, each with a mutually exclusive customer base. But, as Andrew Ehrenberg famously stated: “Your buyers are really buyers of another brand who sometimes happen to buy you.” Focusing on YOUR brand difference to YOUR customer base is a slippery slope. Instead, we suggest focusing on your offer’s vertical and horizontal differentiation and the ability of your branding elements to be noticeable.

3/ Brand growth requires providing consumers ”brand access.” This can be accomplished during the category entry phase by increasing what Bryon Sharp coined as mental and physical availability, during the moment of choice phase by providing a favorable functional or emotional trade-off, and during the post-purchase phase in which the brand feeds the customer loop cycle.

OK, so why do marketers need to pay attention to these key points?

The reason is alluded to by Simon White in this AdAge article. In short, marketers are increasingly seduced by the digital marketing promise of hyper-targeted solutions that induce short-term vision and an increased obsession with ROI, all of which comes at the expense of long-term brand-building.

White takes the example of Alphabet, Inc. Chairman Eric Schmidt, who once asked “why would anyone ever pay to show an advertisement for diapers to households who don’t have a baby?” His point being that digital marketing eliminates this wastage. But from a branding perspective, it is this very “wastage” that builds brands. When the aforementioned baby-less household becomes “baby-full”, successful brands need to have already created a presence and a favorable impression. This is a key part of providing consumers brand access. This is the importance of branding. This is how increased penetration is achieved.

In simple terms, investing in digital only, means focusing on those consumers at the bottom of the purchase funnel (those ready to purchase), and neglecting filling the top of the funnel with future customers. The strategy is great for short-term ROI, but lethal for brand-building.

And here’s the kicker: the success of a brand in the future we painted at the beginning of this article, in which the strength of one’s brand will determine its ability to emerge at all, hinges upon its current brand-building efforts. Low investment in brand today = low probability or emergence tomorrow.

So where should we go from here?

We propose ensuring a two-pronged branding strategy – a strategy that strikes a balance between short-term ROI objectives and long-term branding goals. A strategy that puts mass reach tactics back at the core and uses digital carefully and wisely. A strategy that is supported by an entirely new understanding of consumers based on new data collection methods and new ways of questioning consumers. A strategy that will require understanding connected devices as much as it will require understanding consumers themselves.

You may believe the future of branding is fascinating. You may believe it is terrifying. You may believe it is both. Whichever outlook you wish to subscribe to, let us not forget that the future of branding requires us to act today. This is a call to marketers and branding experts: in the words of Dylan Thomas, let us “not go gentle into that good night”, because that good night will not be gentle with us and the dawn promises to be harsh.

Want a fuller picture of brand growth? Click here for our Brand Growth Manifesto!

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