Today, technology and fashion brands have become more prominent than the brands most of us grew up with or still use every day – how has this become the case? THOMAS OOSTHUIZEN, Global Consulting Director at Acceleration, delves into the theory behind this.
We know strong and differentiated brands drive revenue, profit margin and shareholder value growth. Apple, Google and Facebook are three recent examples of this.
Yet, overall, brands have declined in stature over the years. At least many brands are under threat. Just consider how traditional brands are now lagging in the annual BrandZ (WPP) survey of top global brands. Today, technology and fashion brands have become more prominent than the brands most of us grew up with or still use every day.
There are several reasons for this:
Low growth in many industries which led to the consolidation and rationalisation of brands. Brand efficiencies across manufacturing, logistics, technology and marketing have become key drivers for success. This means differentiation and consumer value proposition discussions now often take the back seat.
The commoditisation of many industries and brands. This is evident in the decline of margins in many industries and an increase in the number of price sensitive consumers. Consumers knowing they can get a “good deal” if they shop around online, which reduces the impact of brands. Also, because social media make brand comparisons between friends easy, it further reduces the impact of brands.
The result is that consumers are no longer that loyal to brands. Even within emerging markets – once seen as (new) positive momentum for brand stature – the consumers go through a fast learning curve enabled by technology.
The empowerment of the consumer – and the availability of information on brands as well as endorsements (or criticism) by other consumers or trusted independent advisors. This undermines simplistic and “un-true”/ “half-true” statements by brands, further eroding differentiation. Outside of brands that are very emotional, like watches and fashion, it is not easy for brands to justify margins if they are the same as other brands.
Perceptually, a decline in brand differentiation in many industries, notably in financial services, telecommunications, retailers, media, ISP’s, automotive, energy, utilities and airlines. Whilst there are exceptions, the vast majority are perceived as “so-so”. Consumer research has seen this decline over a period of years: consumers view these brands as more and more similar.
Parity of product and service quality. Most brands are simply similar in how they deliver to consumers. This may partly be as a result the notion of benchmarking – pursued by most corporates at some point – which essentially made the business foundation of brands the same within the same product or service category. The same technologies being available to all have also played a role in this, i.e. telecommunications companies.
Yet, one of the key issues that face brands – it has started very subtly but is about to accelerate, is the issue of dis-intermediation. Largely enabled by digital technology.
In more and more instances, the interface between consumers and brands has declined to a level where it will be hard to regain the high ground.
The most obvious place for this is comparative websites that compare offers from various brands to select the one most suitable for a given consumer. This is rife in banks, insurance, travel, consumer goods, etc.
Another example, the bank account and the bank that is debited at the end of an Amazon transaction, is less evident than when we physically took our cheque books out to pay accounts, do online banking or use a credit card in a store. We may not even remember what account is linked to what transaction anymore.
Similarly, the telecommunications service provider is far less salient when I use Facebook, LinkedIn, WhatsApp, Messenger, iTunes and any one of a given number of brand applications. Or when I use an independent retailer to top-up airtime. Whereas with voice and sms the service provider was clear, it is no longer as clear in the sheer number of hours spent on a device doing other things. This is until such time as the brand does not deliver (bad call quality, slow data speeds, coverage issues) – and then the trigger is negative.
Even in entertainment media and content per se, parity has started. We will be watching a program not knowing whether it was produced; aired or streamed through Sky, the BBC, Amazon Prime or Netflix.
The airline I may eventually use when booking through Xpedia; the hotel through Booking.com; the brand of fridge I buy through Amazon.com, even the backpack or shirt I buy online.
We know that new brands that offer simple, direct solutions (Uber, Airbnb) are – contextualising the competitive space for consumers. Hence in salience, they define different solutions amongst new groups of consumers. This may mean for younger consumers, some older brands will never take-on the significance they once had. To change this will require hard work by brands. Some industries – as a result – are under enormous threat, notably telecommunications, retailers and banks.
Yet, there is hope!
Simply considering the recent launch of the new Tesla smaller and cheaper electric car, differentiation still works if it is substantiated and credible. Yet, there is a window within which a brand needs to either redefine itself or create a new brand that will cannibalise it.
Bottom-line, don’t wait too long! Once a brand decline starts to accelerate beyond a certain level, it takes serious executive time and resources to correct – and the outcome is not guaranteed
Mobile is the new branch
Standard Bank has launched an account for mobile devices that gives back 500MB of data a month
Standard Bank has introducd a R4.95p/m bank account called MyMo that customers can open on their mobile devices, loaded with data and airtime offerings and other benefits such as virtual and Gold physical card.
MyMo account holders will also enjoy the convenience of a cheque account through a Visa and Mastercard gold card. Once the account is open, users can choose to either receive R50 in airtime or 500MB of data a month, if their card is swiped more than four times a month. A further megabyte of data is loaded on the account for every R20 spent.
“MyMo is an account for everyone, whether you just landed your first job or have been around the block. With no documentation required it only takes a few minutes to open the account,” says Funeka Montjane, Chief Executive for Personal and Business Banking, South Africa, at Standard Bank Group. “For just R4.95 a month customer will be able to enjoy free swipes and ATM withdrawals at only R6.50 for amounts under R 1 000.
“Mobile is the new branch. This account is about bringing the mobile branch into customers hands, it is about convenience and security while banking.”
She says mobile offers low cost transactional banking which integrates people and businesses into the new connected economy, making mobile the new branch ecosystem that will drive and connect Africa’s growth. Physical connections to the economy are rapidly changing to digital where banks have to move from being financial institutions to service organisations.
“In the past people congregated in communities and eventually cities to maximise the advantages of connectivity. Today a simple hand-held device has the potential to open infinite doors, transforming individuals’ access to opportunities, regardless of where they are, and like never before in history.
“Historically, a bank account represented access to economic citizenship. Today, having a simple device enabling digital access to a modern banking platform is a passport to global connectivity and vast human development potential.”
The bank says it is using technology, and mobile phones in particular, to deliver low-cost transactional channels accessible to all our customers. The evolution in mobile can be seen in transaction options like cash back at the retail checkout till rather than the ATM, free digital banking rather than using a branch, and the ability to transact using digital wallets, even without a bank account.
“Developing comprehensive connected ecosystems requires a mind-set change from Africa’s banks,” says Montjane. “Banks will evolve away from traditional financial service organisations, into service ecosystems enabling broad universal access to almost everything like enhanced purchasing experiences of vehicles and homes, online procurement of goods and services and lifestyle elements like rewards and travel.
“These connectivity drivers will also act to future-proof evolving connectivity ecosystem by allowing us to offer untold future services while deriving income from as yet unrealised revenue streams,.
From a customer perspective, the kind of ecosystems of knowledge, access and, ultimately, connectivity that banks will come to provide will radically transform the share of life that almost all individuals will be able to access.”
Two-thirds of SA staff hide social media from bosses
With 90% of people in employment going online several times a day, it can be hard for most workers to keep their private and work-life separate during the working day (and beyond). The recently published Global Privacy Report from Kaspersky Lab reveals that 64% of South African consumers choose to hide social media activity from their boss. This secretive stance at work also extends to their colleagues, with 60% of South Africans also preferring not to reveal online activities to their co-workers.
Globally, the average employee spends an astonishing 13 years and two months at work during their lifetime. Interestingly though, not all this time is directly related to solving work tasks or earning a promotion: almost two thirds (64%) of consumers admit visiting non-work-related websites every day from their desk.
Not surprisingly, 35% of South African employees are against their employer knowing which websites they visit. However, more interestingly, 60% of South African are even against their colleagues knowing about their online activities. This probably means that colleagues constitute an even greater threat to future perspectives of an office slouch or maybe the relationships with colleagues are more informal and therefore, more valuable.
On the contrary, social media activity appears to be a less private domain for many and therefore, more suitable for sharing with colleagues but not the boss. This is probably because workers fear harming the public image of a company or interest in decreased staff productivity motivates companies to monitor employees’ social networks and make career changing decisions based on that. Such policies have led to 64% of South Africans saying that they don’t want to reveal their social media activities to their boss and 53% even don’t want to disclose this information to their colleagues.
A further 29% are against showing the content of their messages and emails to their employer. In addition, 3% even said that their career was irrevocably damaged as a consequence of their personal information being leaked. Thus, people are worried about how to build a favourable internal reputation and how not to destroy existing workplace relationships.
“As going online is an integral part of our life nowadays, lines continue to blur between our digital existence at work and at home. And that’s neither good nor bad. That’s how we live in the digital age. Just keep remembering that as an employee you need to be increasingly cautious of what exactly you post on social media feeds or what websites you prefer using at work. One misconceived action on the internet could have an irrevocable long-term impact on even the most ambitious worker’s ability to climb the career ladder of their choice in the future,” comments Marina Titova, Head of Consumer Product Marketing at Kaspersky Lab.
To ensure workers don’t fall prey of the internet threats at a work, there are some core guidelines to adhere to in the digital age:
- Don’t post anything that could be considered defamatory, obscene, proprietary or libellous. If in doubt, don’t post.
- Be aware that system administrators may at least, in theory, be informed about your web browsing patterns.
- Don’t harass, threaten, discriminate or disparage against any colleague, partner, competitor or customer. Neither on social networks or in messages, emails, nor by any other means.
- Don’t post photographs of other employees, customers, vendors, suppliers or company products without prior written permission.
- Start using Kaspersky Password Manager to ensure your social media and other personal accounts are not at risk of unauthorised access by someone else in an office. Install a reliable security solution such as Kaspersky Security Cloud to protect your personal devices.