Post-crisis consumers embrace social values

Newsroom 26/05/2014 | 08:00

Gabriela Salinas, global brand manager at professional services firm Deloitte, says that social media have given a stronger voice to members of the public, who are now calling on brands to be more transparent. She believes that more consumers are turning to social brands following the financial crisis.

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How important is the marketing budget for the branding campaign of a company that has limited financial resources?

Nowadays, budget is less important. In terms of brand support, social media allow us to reach the right audiences with a lower budget, if the content and execution are right. To give you an example, Brandy Melville, a new fashion brand targeting teenagers, which has only 19 stores in the US, has achieved more impact than Abercrombie (with 900 stores) on Instagram. For promotional purposes it relies more on Instagram followers than on TV or graphic ads. Part of the success of Brandy Melville probably has to do with the fact that it has a very different style and its clothes don’t display its name.

Muji, the Japanese brand synonymous with simplicity and the “no-frills” approach, is another example of a brand that invests very little in advertising and whose main communication vehicles are the stores themselves. The secret of Muji’s success is the consistency of its experience. It is extremely simple, eco-friendly and functional, and its stores, production line, products – all its touch points – are consistent with these values.

Many banks invest a lot of money in communicating, much more than either of these two brands. And they do not achieve strong association or differentiation – even less, advocacy. Why? Because most of their campaign ideas, slogans and themes change every year or are very inconsistently executed.

What we can learn from these two case studies is that the most important thing is communicating consistently. Nowadays, in terms of communications, the “how” is more important than the “how much”.

How has the branding industry changed following the global economic crisis?

Different studies show that trust in brands has declined significantly since the financial crisis, as perception of value and price has been impacted. The perception of white labels (e.n. product or service produced by one company that other companies sell it as their own) and low-cost has changed, and now buying these categories is perceived as an intelligent choice. Consumers now prefer a more thrifty, frugal and sustainable lifestyle. In the past, this phenomenon has been described as “déclassé consumption”. This change in attitudes and behaviors on the market has affected the way in which many brands position themselves and now the values on the rise are related to simplicity, austerity, honesty, cooperation. Brands are becoming less “bling”, more real – in a way, more human. We are moving away from the more individualistic values of capitalism and embracing more social values. We feel more attracted to brands with a credible and original story to tell. We feel more attracted to brands with a higher-order purpose related to societal issues, like helping kids in need, women at risk of exclusion, the environment, etc.

Also, since the financial crisis and in response to the new values of the “post-crisis” consumer, new brands and business models like airbnb (a peer-to-peer home sharing business), RelayRides (peer-to-peer car sharing) and zopa (peer-to-peer lending) have started to thrive. These brands are services that allow people to share their homes, cars or money with one another. This movement is known as “collaborative consumption” or “shared-economy.” In the past, we lived in the era of “accumulation.” Now we are moving to the “sharing or access” era. In other words, we own less and share more. In some cases, these new “shared-economy” brands are competing effectively with traditional brands and disrupting their categories. In some sectors, like banking, where trust has declined significantly post-crisis, peer-to-peer lending brands have benefited immensely.

Have social media shaped the branding industry in recent years?

Yes, definitely. I think they have shaped the branding industry in at least three ways:

• Increased demand for transparency: While before it was more about story-telling and positioning and having a “unique selling proposition”, today brand communications are much more about “story-building”. With social media it is very difficult to hide. Stakeholders are “armed” to be more challenging and skeptical than ever before. Transparency is no longer a choice; it is becoming an expectation. People want to know more about the supply chain making the products they are buying. They are not naïve and do not expect perfection, but rather transparency and authenticity. Being genuine, honest and authentic is the new black. The winners in this new era will be brands that are humble, flexible and not afraid to recognize their errors. Some experts have coined a term to refer to these types of brands that I find really interesting: “flaw-some” (derived from the English words “flaw” meaning error and “awesome” meaning great).
• The corporate brand is as important as the product brand: Today we need to address the demands of broader groups of stakeholders, not only the clients. In this context, the company behind the product brand is starting to play a key role in the purchase decision. As a consequence, corporate brands are now playing a “heavier” role in brand architectures and as an “authenticity” stamp.
• Loss of “control” of your brand: As we “lose control” of our brands, the mandate for brand managers becomes increasingly challenging. Before, when value creation was related to the investment in tangible assets and functional attributes of products, the mandate of communication directors was to differentiate the offer based on these traits. And we only had to do it by addressing clients and improving their perceptions through talking to them about how it was better than the competitor’s offers. And all this happened in a simpler environment without advertisement saturation and less competitive offers. Today there is nowhere we can look that we cannot find an ad. There is a proliferation of non-traditional competitors and we need to address a broader set of stakeholders. With all this the task of differentiating our offer has become more complex.

What Romanian brand would you like to work for?

I am not familiar enough with the Romanian market yet, so it is a tricky question. Although it is difficult to miss the presence of brands such as Ursus, Dorna, Borsec and Dacia, I do not know enough about them to be more inclined to choose one over another. I would say that in any market, I would like to work for a brand that is different, but also that believes in what I believe in: that values are more important than value, and people are more important than profit.

Ovidiu Posirca

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