The Power of Turbulence Insights into changing consumer mindsets

Turbulence – uncertainty, complexity and instability – is changing the marketing landscape in ways that present new challenges and possibilities for growth. Turbulence isn’t about the explosion of new channels, platforms and consumer choice, it’s about the business and consumer context in which CMOs must now build profitable growth for their companies. As it’s being felt right here, right now, by every marketing team we speak to, and every consumer we research, this paper provides a few pointers for navigating through uncertainty.


1. The big issue

 

At a macro level, markets are turbulent, with increased M&A changing, or threatening to change the powerbases in many categories. At a category level, marketers are experiencing new competitors and substitutes coming from adjacent categories opened up by technology and new business models. And the shopper mission shift from ‘big weekly shop’ to ‘regular top-up’ is putting more pressure on brands to secure valuable shelf space in convenience formats.

In response FMCG brands are, for the first time, exploiting direct-to-consumer channels with brands like Dollar Shave Club and Persil’s ZipJet tie-up transforming consumer brands from mere products to more emotive service brands. Along with the unrelenting fragmentation of channels and platforms, CMOs are now battling uncertainty and complexity to ensure their brands are fit for the future.

But market turbulence is only half the story. Consumers’ lives are in a state of flux too. People are feeling increasingly aware of uncertainty in their lives. From Millennials to Asda mums, no one knows what the future holds. Tumultuous world events are experienced in real time at every check of the mobile. Uncertainty over the implications of Brexit, and diminishing trust in politicians, CEOs and big business, is resulting in a crisis of trust, cynicism and indifference towards traditional sources of authority.


This turbulence has changed the emotional context in which brands operate, eroding consumer trust with implications for CMOs’ short- and long-term marketing activities.

 


2. Why this is important now


The turbulence happening right now is creating new consumer value systems that affect shopping habits with important implications for actions CMOs take today.

Austerity shopping is now embedded purchase behaviour, as private label overtook brand (value) sales across Europe for the first time in 2015. Private label value and premium ranges are squeezing the branded middle ground leading to a new value equation where low price and ‘good enough’ product quality is making consumers indifferent to many brands. Brands aren’t just battling for attention they’re also battling consumer indifference because too few of them have any real emotional connection with consumers.

The small guys in many categories are taking stands that are gaining distribution and winning against the big legacy brands, whose warrior-like archetypes are being shunned in favour of softer values. For example, US farmers’ markets are stealing over $1billion in sales from the Wal-Mart’s of the world, and craft alcohol is not only stealing market share, it is arousing disdain for big brewers and spirits companies alike.

Faced with uncertainty, consumers are placing a higher value on better experiences than on having more money. Superior experience is winning in categories where product performance was once key. In household and personal care, brands like EOS, Hello and Help Remedies are providing enhanced user experiences and gaining market share by appealing on a different emotional level. Experience is trumping rationality.
In response FMCG brands are, for the first time, exploiting direct-to-consumer channels with brands like Dollar Shave Club and Persil’s ZipJet tie-up transforming consumer brands from mere products to more emotive service brands. Along with the unrelenting fragmentation of channels and platforms, CMOs are now battling uncertainty and complexity to ensure their brands are fit for the future.

But market turbulence is only half the story. Consumers’ lives are in a state of flux too. People are feeling increasingly aware of uncertainty in their lives. From Millennials to Asda mums, no one knows what the future holds. Tumultuous world events are experienced in real time at every check of the mobile. Uncertainty over the implications of Brexit, and diminishing trust in politicians, CEOs and big business, is resulting in a crisis of trust, cynicism and indifference towards traditional sources of authority.


Consumer indifference and new values have created new threats and opportunities for brands that CMOs need to address.


3. How this affects you

 

One key role of the CMO is to ensure their brands are fit for the future. Dealing with turbulence is both urgent and important because it creates both vulnerability – which needs a great defensive play to ensure your brand survives; and opportunity – which needs empathetic consumer and brand thinking to exploit.

A clear defence against turbulence is to manage the short and medium term by re-evaluating what your brand stands for. This means making sure it speaks to the values consumers are now looking to reflect, and the emotional benefits they seek. In turbulence people seek anchors, which means uncovering the deeper, human needs that are hard to unearth but provide the foundation for sustainable growth.

On the other hand, seizing the opportunities created by turbulence and managing the medium to longer term requires capturing the real value in your brand’s consumer relationships – what the brand ‘helps me do’ or ‘helps me be’ – and consolidating this relationship by developing disruptive innovations that support and enhance these desires. The key to this is looking beyond simple product innovation to address the problems that matter, reconfiguring your offer to meet new needs, or adding a new experience to the category to change the rules of engagement.


Forward-thinking CMOs are making their brands fit for the future by looking harder at how their brand can embrace changed consumer behaviours and turn indifference into involvement through stronger emotional connections.


4. The solution


In turbulence, people either meet their emotional goals by seeking anchors to feel in control, or by seeking new ways to enhance themselves. Our work with leading FMCG brands has identified four drivers for building stronger emotional connections in uncertain times.

  • Anchoring the brand in a powerful purpose
    By connecting at a deeper level that enables a meaningful role in people’s lives. A powerful purpose transcends the turbulence of a changing world and generational shifts in attitudes.
  • Anchoring the consumer relationship with purpose-driven innovation
    By understanding where the real relationship value lies, and innovating to build on this by giving consumers new experiences from the brand.
  • Unlocking new growth
    In adjacent categories by re-framing what the brand stands for to better meet the real needs of consumers.
  • Unlocking a new user-experience
    By designing-in ‘liking’ to innovations. This is about asking the simple question ‘Why would anybody enjoy using this product?’

Whether defending an existing space or creating a new opportunity, being fit for the future means forging deeper emotional connections with consumers.




5. The bottom line


As markets and consumers are changing, CMOs and their brands are facing greater challenges than ever before. Uncertainty, complexity and instability are changing the competitive and retail landscapes. Consumers are adopting new behaviours. Both short and long term activities need to embrace the opportunities this creates for brands to become more emotionally relevant and desirable.

The way forward is clear. To stay relevant, brands need to forge stronger emotional connections by tapping into consumer desires at a deeper level, and helping consumers ‘do something’ or ‘be something’ better than competitors. Re-evaluating the core, identifying and unlocking where the real consumer value lies, growing into adjacent categories, and designing-in ‘liking’ are all powerful ways to create future growth and ensure your brand is fit for the future.

 

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