Disruption and change: the path ahead

August 19, 2021 Sorcha OBoyle

81% of consumers discovered new brands during the Covid-19 pandemic. That’s according to a recent survey by Google and should give the leadership team of any brand pause for thought.

August is a good time to reflect. For many, August feels like the Sunday of the year when thoughts turn to peak and plans are already underway for Christmas. And while the summer break is a time to kick back with that cold beer, cheeky Aperol spritz or non-alcoholic drink of your choice, it’s also time to think about the bigger picture.

After all, now is the time to interrogate your assumptions and make sure you’re setting your brand up for success for the rest of 2021 and into 2022.

To do this, we need to take a step back.

The turbulence of 2020 is well-documented: lockdowns were the catalyst for monumental change as consumers stayed at home and businesses were forced to pivot their entire modus operandi overnight. Everyone was flying blind as the world was plunged into a scenario few had ever even imagined possible.

As with everything, some businesses managed better than others. Those with stores suffered while subscription and ecommerce brands boomed, harvesting the unexpected windfall of consumers stuck at home with time on their hands and a sudden desire to get crafty, redecorate the house, and get that six pack. Online channels delivered never-before-seen growth, warehouses struggled to keep up with demand, and operations teams worked around the clock to keep deliveries going out the door.

We all quickly came to the conclusion that we were sailing in uncharted waters and most of our old assumptions had to be questioned. Customers demonstrated that the traditional customer acquisition strategies of store expansion and the shop window were no longer the only option – online channels had been growing steadily for years but went haywire in 2020 and are still mostly up on 2019. Gone was the worry that older customer cohorts would never go digital – that cohort migrated to online channels en masse and many continue to buy online regularly, well after stores reopened.

But what does the bigger picture show us?

In short, digital transformation is everything.

A recent report by McKinsey analysed the performance of the so-called Super 25, the 25 brands who rode the wave of change during the pandemic and delivered stratospheric growth as a result. To put it into perspective, the top 5 American companies in the Super 25 generated 80% of US retail value. Amazon alone created almost 60%.

As might be expected, these businesses are brilliant at harnessing the power of digital channels. Those with stores were able to limit the damage by adapting quickly to a changing marketplace and meeting their customers at exactly the right place – online. Since the first lockdowns ended, those digital-forward brands with physical footprints have used digital channels to support store performance as customers become more comfortable shopping in person.

But what else can leaders learn from these superstar brands?

Leaving their size aside (all the Super 25 are true behemoths), the companies on McKinsey’s list generally tick at least one of four boxes:

  1. They sell home-improvement or furnishings
  2. They have a brilliant online presence
  3. They focus messaging on value for money
  4. They’re a pureplay platform

The success of companies in the Super 25 can’t be overstated or overlooked – they’ve changed customers expectations and spending habits for good and brands need to adapt quickly to keep up with the change.

As a business leader, it can be hard to rise above the urgency of the day-to-day and take a step back to focus on what really matters. But there’s a lot you can learn from the Super 25 – what works for them will work for you too (hint: as you might expect, it all comes down to a relentless focus on the customer). Here are the 4 areas where direct brands should be investing their energy and where leaders should be spending most of their time:

  1. Prioritise adaptability
    Stagnation will throttle your business. Agility is the common denominator behind all of the Super 25: companies that adapt are the ones that survive.

    If you have stores (or are thinking of opening them), ask your teams you can develop the physical ecosystem of those stores. Do you want a traditional space with rails of clothes? Or is there an opportunity to reimagine your store footprint? Think about how you want your customer to experience your store – is it a place for discovery or a place where they can dwell and spend time with friends? What other services might they want to enjoy? How can you facilitate that? How can you use new technologies to make customers’ store experience even more memorable?

    Now is the time to be adventurous. Do you offer a subscription service? If not, why? Remember, 73% of direct brands are expected to provide a subscription service by 2023 and subscription businesses are forecast to be worth £1.5 billion to the UK economy by 2025. It’s worth a trial.

    You need to be constantly on the lookout for new ways to engage with your customers both online and offline: challenge your teams with finding new ways to bolster store performance using digital channels and vice versa.

  2. Double down on what makes you different
    Consumers have become used to the seamless shopping experiences on Amazon and the other pureplay giants. As a smaller brand (and every brand is smaller than Amazon), it’s hard to compete. Instead of trying to beat them at their own game, focus on what makes your brand different and communicate it clearly to build your direct relationship with your customers.

    Whether you’re a vegan shoe brand or a furniture business, we all love a story so make sure you share the real story behind your brand and what you’re trying to achieve.

    Many consumers are actively trying to buy more conscientiously and sustainably so share your eco credentials with them and make sure they know that you’re doing your bit to build a sustainable business. This will set you apart from the Amazons of the world, as will small personal touches from your team. Want to show a customer how much they really matter to you? Add a small note or gift to their parcel to say thanks. Want to see which products customers really love? Hop onto Instagram Live and ask. You won’t get more honest, instant feedback than that. It’ll take a little time but it’s worth building the human connection with your customers to learn what they really love about your brand and where they think you can do better.

  3. Choose your partners wisely
    To grow, you need to focus on what you’re good at. If you’re a real creative and you see inspiration for new designs or ideas everywhere you look, focus on that. Your brand has made it to this point because your product is brilliant and you’re fulfilling your customers’ needs – that’s what they love you for and why they keep coming back. But if you want to grow quickly and with confidence, you need to surround yourself with people who know how to scale your business and can do the things you can’t.

    And if you’d like to have a chat about how more2 can help you to grow more quickly than you can alone, get in touch here – we’d love to hear from you!

  4. Be prepared to change your mind
    We’ve touched on agility and adaptability already but it’s worth mentioning humility too. When you’re close to something (be it a product, a campaign, or a design), it can be hard to see it objectively. The big success stories like those in the Super 25 have one important thing in common: they sold the right products at the right time. They sold homewear, fitness, and subscription products during a time when consumers were largely confirmed to their homes. Ultimately, their success came down to anticipating new trends (customers increasingly want to buy online), timing (the onset of the pandemic), and a relentless focus on customer experience.

    If your brand isn’t performing as well as you would like, take an objective look at what you’re selling and who you’re selling it to. It may be time to reorient your strategic positioning in line with market trends and let the customer take the lead.

The successful brands of the 2020s will be the ones that are at ease with change. Once you stop innovating, you start stagnating and you risk being left behind. Retail and direct brands have been through a whirlwind of change over the past 18 months and the rate of acceleration is unlikely to slow down any time soon so bold decision-making, agility, and digital transformation will be central to success.


Want to see how more2 can help your business to grow? Get in touch here!


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