Businesses need to get very close to their consumers: David Roth
Roth, CEO - The Store WPP, EMEA and Asia & Chairman of BrandZ, says investment in technology and a direct relationship with consumers will accelerate the businesses in next two years
Pandemic has made 2020 one of the toughest years for the global economy. Every brand irrespective of sector had to reinvent itself in these challenging and absolutely unpredictable times. All of this makes this year’s WPPBrandZ 2020 report even more interesting and crucial.
While the latest report has been released, we speak to David Roth - CEO - The Store WPP, EMEA, and Asia and Chairman of BrandZ, to understand more about the emerging trends in the new normal.
As per the report, India’s top brands performed well against other countries where declines in total brand value were much greater. What were the factors that worked for these Indian brands?
In the studies that we have nailed down for brand valuations, we have seen different degrees of the total valuation, growth and decline. Over the other countries, in India, the balance of things has gone reasonably well with a decline of around 6 per cent. One of the reasons that we haven’t seen a greater decline in India is the strength of Indian brands. In particular, the key components of brand value growth, which is their meaningfulness, and also how the brand is well differentiated is a testament to the strength and quality of brand building in India.
Here lies a critical point, which is that the amount of investment you make in building a brand has an amazing payback. It not only helps you recover faster but also helps you during difficult times. Strong brands recover faster and we are going to see the same as we start to join the glide path out of the COVID pier that we are in.
Airtel is one brand that showed significant growth in India, according to this year's BrandZ report. Globally, which are the brands that have been able to show similar growth. What are the learnings Indian brands can take from them?
The Top Most Valuable Global Brands, the valuation of which was launched very much at the peak of the growth in the pandemic, grew at around 5.8 per cent, which is a positive growth, and that growth in value terms is $75 billion. The big difference in the global brands in the Top 10 Global Brands ranking is that we see many digital, e-commerce and technology brands. Of course, these brands have performed well over the recent months because the world has accelerated digital transformation. That is probably one of the key lessons that we can all learn from the pier that we have been in the last few months. It is important to put your foot on the digital accelerator and drive digital transformation in your business, both from the consumer and business efficiency perspective. The investments in technology and being able to have a direct relationship with your consumers are going to be something that all businesses are going to need to accelerate over the next two years.
What are some of the key steps that marketers or brands must take to build trust with the new and evolved consumer, in a socially distant world?
Trust has always been a key pillar in what defines a valuable brand. Our experiences over the last few months and the ones we are going to have towards the end of the year are going to define what we now mean by trust. Several things that brands did that were invisible to us, especially in terms of health and safety, have to become much more visible. That is going to develop trust.
One of the things that we have seen in India, and also across the world, is that despite the difficulties that everybody has had, it hasn’t taken consumers' eye and mind off how important it is to the companies and brands to operate in both an ethical way and a way that lessens the impact on the environment.
The third area which is equally important is the whole notion of transparency. How organizations, companies and brands work is under the microscope. Consumers look to see how brands behave versus their claims, and where there are gaps between the two, that has been exposed in the past and that will occur in the future.
Another element is value. Consumers are going to be much more careful about where and how they spend their money and will be looking for greater value propositions. Brands are going to have to interrogate their products until they have their value superiority and then make sure that it is communicated to their consumers.
A lot of digital brands like Netflix, TikTok and MasterCard have made it to the top brand list this year. Do you think it is a momentary phenomenon or will these brands be able to hold their position in the top brand list in 2021 too?
I think they will hold onto their positions, only the growth won’t be as spectacular as it was in 2020. Several non-returnable gates will go towards consumers in the way in which we consume entertainment and shop, and those top brands are very well placed to take advantage of that. Of course, there will be some normalization of it. One of the key things that we are beginning to see in data from people who track web traffic is that web traffic is starting to decline over the last few months as the lockdown in many parts of the world is becoming less aggressive. But what has been maintained is the transactions that were made on the web and the conversion rates. These factors are signals that consumers have held onto a fundamental change in some of the behaviours and they probably won’t return to the way it was before. Which means marketers around the world are also going to have to be much sharper in the way that they change and refine their marketing strategies.
You handle many international markets. When we compare Indian brands with others, what are some of the strong areas for us and where do you see the need for more work?
One of the things that always positively surprised me about working in India with our Indian colleagues and clients is the amazing amount of both — the intellectual ability that they have and also a can-do attitude and a very positive outlook on life and circumstances. These qualities have been very important in the way in which Indian brands have responded to the challenges that nobody would have predicted at the end of 2019, which was a pretty good year for brands across the world.
The areas where India has some catching-up to do is in the e-commerce space. Although, frankly, the speed in which that has happened over the last few months and also the last couple of years has been quite dramatic in India and that is quite impressive. But there is still some catching-up to do in terms of digitization of processes and procedures, making things more simplified and quick for the consumers so that the time is reduced for them to complete a purchase and that is extremely important. But I have confidence in the skill ingenuity of Indian marketers, and how they go about doing things. It will make this gap disappear soon.
Going forward, how important do you think the role of MarTech will be?
How we as communicators and consumers consume information and data is clearly in the fundamental stages of change. One of the key observations is that some of the trends that were appearing and that were already there before the COVID period are being accelerated now — the ability to be able to understand who your consumers are, and to mine the data that is coming out of all of those different digital communications that you can have with your consumers. There is openness and transparency where consumers can give their approval and permission. Then, one should be able to use technology tools to put in front of the consumer at exactly the right time and place. Contextual and sensitive messages that the consumer finds valuable is going to be one of the defining things that is going to differentiate those successful brands and marketers from those who are going to struggle in the years ahead.
What are the long-term transformational changes in the working of the overall business that we can expect in India and globally?
As I said 2019 was a good year on average. We are all realizing that it is pretty unlikely that retailers, brands, and manufacturers are going to have as much turnover for the next 2-3 years as we had in 2019. Businesses do need to be re-engineered, become significantly more efficient and need to get very close to their consumers. Most far-sighted brands are looking at ensuring that they have a direct-to-consumer channel within their roots to market as we have found in this period how important it is to do things directly between you and your consumer without relying on other intermediaries and have the same priorities as you have in difficult periods.
It is slightly too early to tell how the consumer’s attitudes and behaviours are fundamentally going to completely change versus what will snapback in one form or another to behaviours we all exhibited without really thinking about it in December ’19 to January ’20. As eagle watchers of consumer trends, understanding how consumers relate to data via the BrandZ data and the WPP data sets, we will be looking very closely for all the signs of where change is happening and how it is happening to enable marketers to quickly adapt and be much more flexible. The only way that all of us can do that is through amazing speed, and that is one of the skills we will all have to refine and sharpen up. Alongside a lot of new skills, like working fast, working in teams that are not all in the same place. And maybe, get things to be 80 per cent correct, completed and implemented will be much better than 98 per cent complete which takes you longer to get to the goal and the consumer has already moved on and changed.
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