Brands must step out of bubble to cater to everything everywhere customer

It has been a year of shocks and surprises, but one of the big cards that 2018 has dealt brands is that of perpetual restlessness. Nothing is permanent, no brand is infallible and no category secure. In an age of anxious and demanding consumerism, brands have to create a new role for themselves in the coming year. Here’s a look  at the crystal ball for 2019.

Consolidate and aggregate 

From Idea Vodafone to Bank of Baroda, Vijaya Bank and Dena Bank to the change of guard for Horlicks and Complan to the under-discussion Jet-Vistara deal, the trend has been mostly to create fewer and bigger businesses and brands.  

Like most mature markets, we are also seeing the emergence of 2-3 players leading their sectors. And this has led to deeper and wider engagement across categories.  If there is any company that epitomises that, it is Amazon. Think of its subscription service Amazon Prime, the convenience store concept Amazon Go, its ‘try before you buy’ online shopping service Amazon Wardrobe, or even its latest version of the Echo, called Look, that can deliver fashion advice.

Jio has also been exemplary. How does one define the category it operates in? What was intended as a telecom business has subsumed many other businesses ranging from entertainment to commerce. 

The big have also got bigger. Take a look at aggregated market shares of the top three brands in key sectors like telecom, e-commerce on one hand; and cars, tooth pastes and shampoos on the other. Over the years, their combined shares have risen, with many crossing the 70 per cent mark. This is clearly a way of customers finding safety in the trust of leading brands. And big labels investing to navigate new and taxing supply side dynamics.

Utility, relevance and storytelling

While there was a tremendous surge in the creative use of digital media by brands, the emergent trend by the end of the year was that consumers want the stories, but they also want brands that add value to their lifestyles. In a way, it is a return of the value proposition in a new avatar.

Leading brands are driven by their desire to be useful, to create products, tools, and services that actually solve customer problems, and to use their marketing to serve and not just sell. 

L’Oréal has shown that traditional companies can also lead with experience, and has developed a number of service offers that use digital technologies to transform customer relationships. ModiFace, a beauty tech company acquired by L’Oréal, allows customers to experience a live, tutorial and coaching with a makeup advisor, try personalised makeup looks, and even shop online.

Brands also trained their sights on analytics and subscription models more intensely, 29 per cent of the total value of the top 100 brands was accounted by subscription-based businesses, versus 18 per cent in 2009. This is because traditional notions of loyalty are eroding. We live in a service-driven economy where access is more important than ownership. Brands are winning by offering frictionless ways to leverage their products and services based on the personalised needs of  customers. Successful brands are born with a subscription business model, or have significantly adjusted their business models to offer subscription services. Netflix’s brand value grew 45 per cent this year, the second fastest-growing brand, after entering the annual ranking table in 2017. 

Customer centricity 

Anticipating emerging customer needs and being able to evolve the business and brand  is no mean feat. Leading brands are co-creating solutions with their customers, bringing the voice of the customer into every aspect of their business, and investing in future-forward customer exploration. 

According to our Best Indian Brands data, the brands generating the most stable growth over the past five years are those with the highest overall scores on ‘Relevance’ and ‘Responsiveness’. What’s more, the fastest-growing brands over the last five years are those where the two factors present the top–performing dimensions. Brands like Maruti Suzuki and Kotak Mahindra Bank, two of the fastest growing Indian Brands of the recent years have constantly innovated in keeping with the changing customer aspirations. 

So what will really be the big theme for 2019? Maturity, consolidation, positive utility, higher role of brands, hyper customer centricity, customisable subscription models will dominate. Profligacy, aggressive and speculative growth will give way to realism and balance. The future will be more human and personal. Indian brands however will have to catch up on sustainability, good governance. Ethics, policies and governance will rule.

The author is managing director of Interbrand India