What is new, is that, finally, the financial world, dominated by Anglo-American governance, is putting emphasis on the fact that there is more to consider than quarterly results in isolation. From Mr Fink’s letter you can see that Blackrock have understood it is no longer sustainable to focus on business performance alone – without good stakeholder relationships and without a sense of purpose, a business will no longer be able to thrive. Following this discussion, in Autumn 2019 we have also seen the American Business Round Table, publish opinions of senior leaders supporting this view.
Covid-19 as an accelerator for brands?
I would think so. Not all changes that have been caused by Covid-19 will be long-lasting. There are several areas where the buying behaviour of people will be affected structurally, and this will of course impact your brand:
We will buy from home
Being forced to spend more time at home, we have already seen a significant boost in online purchasing in the Western world. We will be buying online, and we will be doing that mostly from home, where Google, Amazon, Facebook and Apple are waiting for us with an intuitive, seamless, and highly convenient purchasing experience. In the future, we will increasingly use in-home, voice-controlled interfaces such as Google Assistant, Amazon Alexa, and Apple Home to order products and services. By dominating the actual interface of a user interaction, these companies get a massive advantage during the purchase process in the customer journey model. For brand owners, it means they have to up their game in other phases of the customer decision journey.
We will want to know the origin of our food and products
Covid-19 originated in China. Going forward, it appears as if we will want to better understand where our products have come from. No longer will we think it’s a good idea to eat food at the lowest price, without knowing from where it originated. We will want to know where it was produced, how far away, and we will require transparency along the whole supply chain. Already, companies are starting to offer services to monitor the supply chain, cradle-to-cradle (DNVGL’s My Story for the food sector is a good example). You will need to think about how to make changes in organisational processes but also about the impact this has on your brand story.
ESG will become of mainstream interest
Whereas ESG (Economical, Societal and Governance) topics were previously of interest to only a minority of buyers, I predict that following the Covid-19 crisis they will become of mainstream interest. We will be entering an era where ESG and sustainability topics are no longer ‘nice-to-haves’, they will become table stakes in conducting good business. No longer will great advertising, great products, or low prices suffice in creating brand awareness and preference. Buyers will demand transparency in what they’re buying: as well as wanting to know the origin of products and services, customers will want to understand their environmental impact, what brands stand for and how they are “contributing” to society.
The end of hyper-connectedness and JIT (Just-in-time)
The world has become accustomed to the concept of everything being connected. This crisis has exposed the downside to this in a physical sense. Using the lowest-price products from far away, will become a thing of the past. Just-in-time has for decades been the default manufacturing methodology to enable low inventory levels, short delivery times and high efficiencies. To our own detriment, we have seen that the downside of this highly efficient model is that it can have disastrous consequences when it is disrupted, and the lack of availability of a minor component prevents production completion and final distribution of products. As a result, sourcing from (too) far away will no longer be seen as a great idea for long-term success.
”Non-essential” business travel will decline significantly
Travelling is another area where we’ll be much more considerate than before. Do we really need to be physically present at a meeting, or could we be just as productive (or more) using video-calling? What impact does this have on your brand experience?
The changing paradigm of brand governance
I appreciate that all these changes are a lot to take in, so what does it all boil down to? Gone are the days where organisations could manage their brand or corporate identity by putting it on everything and logo-stamping their way around the world. Today, brand management is about orchestrating the dialogue between your organisation and its various stakeholders. It’s about doing the right thing because it’s the right thing to do right, and becoming increasingly agile – developing the organisational ability to move fast, give room to new initiatives, evaluate, and adapt.