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The pandemic introduced a new kind of disruption, but in many ways, it is simply accelerating changes that were already well under way. Here's how to plan for the future you cannot see.
The coronavirus has introduced a significant amount of uncertainty into the lives of most CEOs, both on the professional and personal levels. The immediate future has never had as many questions attached to it. How long will it take to feel like the health issues are under control? How will this impact the economy and the way that business operates?

But, in many ways, this recent burst of the unknown is simply accelerating a number of macro forces of change that were already hiding in plain sight.

•  The shift to remote, digital work simply continues the disruption that digital technology and data are having more generally across all sectors (the poster child Uber’s upending of transportation sector).

•  The closing of national borders and challenge to globally-situated supply chains had already been signaled by the rise in protectionism and slow down of labor migration in historically open markets such as the U.S. and the U.K.

•  Spiking unemployment and disproportionate health and morbidity are the exclamation mark at the end of a long cycle of an increasing wealth gap (one that had led to the surprisingly fast growth of low-end discount retailers such as Dollar General and Dollar Store)

•  Regional differences in how the COVID-19 epidemic has impacted local economies is an analog to how heightened climate change risks may appear rapidly and unevenly—such as how vulnerable locales such as Miami, Hong Kong, and Singapore are finding disproportionately downgraded real estate values and insurance cost increases.


Business is in flux in a way most leaders have never experienced it before. But it was already changing faster than ever—often due to forces outside organizations’ control.
In a world of uncertainty and change, today and into the future, strategy remains key to business success, whether to ride out current storms or thrive in whatever “new normal” appears in the next few years.

It’s increasingly difficult to anticipate the trajectory of change—much less have confidence that you’re doing what you need to do to compete. But strategists can’t just throw up their hands in defeat, or propose an ad-hoc “peanut butter” approach—where every perceived “silver bullet” across the business gets a little bit of investment.

CEOs and boards of directors want to know: How should we respond to emerging threats and new types of competitors? Where do we grow next? In a rapidly changing business environment, these questions have no “correct” answer—and it’s no longer possible to answer them using traditional tools like straightforward market analysis.
Strategy remains as important as ever to ensuring that you’re leveraging core competitive advantages, your entire organization is aligned, and operational focus isn’t spread too thin. But it has to be a strategy that reflects the uncertainty of the times.


The Problem With Traditional Approaches to Strategy

Today, we’re seeing the convergence of traditionally unrelated industries. Businesses are increasingly faced with fundamentally new types of competitors. New regulatory regimes are undermining old advantages. In this environment, those able to react quickly to new threats and opportunities will win— and those who don’t will lose.

Consider the taxi industry. For years, it viewed Lyft and Uber as traditional competitors—as just another couple of cab companies, albeit with cool mobile apps. The conventional wisdom was that competing necessitated owning and maintaining fleets of cars and having good relationships with regulators.

Meanwhile, what was actually happening was complete industry disruption. By embracing innovative business models, as well as aggressively leveraging scalable technology and building strong consumer brands— neither of which is a strength of traditional cab companies—Uber and Lyft have changed what success in the industry looks like.

Today, your strategy needs to be ready to respond to that kind of disruption. But traditional approaches like SWOT analysis or Porter’s Five Forces assume that business conditions will remain relatively stable over time. They make recommendations based on historical industry definitions, market conditions, and “mental models” of the business. This focuses management attention on widely known trends, existing competitors, and foreseeable impacts to current business models, and aims at strengthening existing advantages.

By contrast, effective strategy today requires constantly challenging core assumptions, not just one-off projects designed to drive understanding of and responsiveness to customers and leverage technology to change how business works. Strategy must look deeper and more broadly into the future, and be prepared to change direction based on changing circumstances—sometimes in sudden, dramatic ways.


Developing Strategy in Disruptive Times

In an era of big, rapid changes, taking a wait-and-see approach to the future is simply not an option. You need an approach to developing strategy that enables new levels of responsiveness and flexibility—one that is:

Speculative. Strategy used to be about predicting the future, then planning for that future. Now it requires considering a range of possible future industry conditions.

Adaptive. Strategy can no longer be etched in stone. It must be ready to evolve quickly as conditions change, and enable your organization to be vigilant and dynamic.

Portfolio-based. Rather than being about picking a single strategic direction, now a good strategy involves a core strategic emphasis surrounded by a number of side bets designed to give you strategic options in the event of business surprises.

Such an approach helps stakeholders from employees to the C-suite understand how and where the business might create value in the future, and how to prioritize investments in new capabilities versus optimizing business as usual—so your organization will be able to respond strategically, whatever the future brings.


Navigating Uncertainty With a Portfolio Approach to Strategy

Asset management is a good analog for this approach to thinking about strategy: as a portfolio of bets placed against the future, combined with a process for continually updating the portfolio as new information is obtained or new opportunities emerge.

While investment may be weighted heavily towards a particular part of the portfolio—the strategy built for the current most probable future for your business—smaller hedges in other directions (e.g., entering joint ventures or strategic alliances, acquiring new capabilities, experimenting in new markets or with new models, etc.) provide a strategic footprint for evolving the business over time or, if need be, pivoting more dramatically on a shorter timeline.

The future may be harder than ever to predict, but that doesn’t mean you shouldn’t bother planning for it. You just need to get better insight into what it may hold, identify a portfolio of strategic options to enable you to respond to different possible scenarios, and then build relevant contingencies and points of adaptiveness into your strategic roadmap to help rebalance your portfolio as the future unfolds.

To evolve your approach to strategy in this way, you’ll need new tools, processes and perspectives. Methodologies might include: scenario planning, foresight research, and ongoing customer ethnography. Organizations can also benefit from new forms of collaboration across their business ecosystem. And whatever tools you use, to develop and execute more dynamic strategy for a disruptive environment, a more flexible leadership mindset and a greater tolerance for change across your organization are imperative.
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As we look ahead to 2021, Marketing Week has identified the key opportunities and challenges that will shape marketers’ working world. First up, the need to adopt a dual-speed strategy and the value of failure.
Our coverage of the ‘trends’ for the year ahead is slightly different this year.

Yes, we are flagging what we think you should be spending your time and money on, and why, but equally it is a commitment from us to focus on these topics in 2021 to help you better navigate the year ahead.

There’s little point flagging these challenges as important without going the extra mile and offering analysis and insight into how to tackle them.

It’s part prediction, part rallying call, part contents for 2021.


Adopting a two-speed strategy

If this year has taught us anything, it is that even the best laid plans still run the risk of being thrown out as the outside environment changes.

Yes Covid-19 is an extreme example of that, but uncertainty looks set to become an economic reality. From geopolitical events such as Brexit or the US election, to the environment crisis and the impact of digital, it seems best to assume uncertainty is the new normal.

With that in mind, it is key to take a two-speed approach to business strategy. Businesses still need to take a long-term view, to have a goal to aim for or a purpose to strive for.

That should influence innovation pipelines, how they think about customer experience and communicate with customers.

But within that long-term plan there must be room to allow for short-term disruptions and to adapt on the fly. We have seen this year that even the biggest businesses can be agile and quickly adjust course. That spirit of short-termism while keeping an eye on the bigger picture will remain key next year.

So too will an understanding of customers, and what drives and motivates them both over the next few months and the next few years. Much has been written about how Covid-19 will change everything. It won’t. But there will be shifts in behaviour. As much as there is no new normal, there is no old normal either.

The challenge is to weed out what is driven by circumstance from what is deep-seated behaviour change. Long-term are we all going to work from home all the time? Unlikely. But is work going to become more flexible and remote? Probably.

What impact does that have and what does your business need to be investing in to be ready for those changes? SV

Embracing failure

For too long failure has been considered the worst thing that can happen in business. This mentality is symptomatic of a working culture where new innovations, campaigns and services are the product of months, if not years, of planning. The stakes are so high that anything less than perfection is considered a serious problem.

In 2020 this mindset ground to a halt. All the best laid plans were shelved as businesses worked on their response to surviving the next few days, never mind the next few months. As brands started to move at greater speed and tear down some of the red tape, they realised their response to the crisis did not have to be perfect, they simply needed to be present.

Deciding not to become fixated on perfection will be important for marketers in 2021. If brands want to move at speed they have to embrace the fact failure comes with the territory and any mistake is an opportunity to learn.

Mars Petcare has focused on being ‘good enough’, for example, rather than having a preoccupation with perfection. Learning from previous mistakes helped the business launch a direct-to-consumer website for its natural dog and cat food brand James Wellbeloved during the spring lockdown. While the technology was simple the website has worked well and is now reviewed by on a monthly basis to make improvements.

The fact more brands are embracing agile forms of working, means marketers will have to get used to regular retrospectives to assess progress. The success of these ‘post-mortems’ comes from looking at failure in a positive way, because, as Mars Petcare marketing portfolio director Arthur Renault explains, if you frame the retrospective from a “punishment angle” people will shy away from taking a risk.

A similar approach has already been adopted at ride-hailing giant Uber. Speaking at the Festival of Marketing in October, global director of brand and product marketing, Meg Donovan, insisted that a marketer’s job is never really done, as there is always an opportunity to “make a better product or build a better brand”.
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COVID-19 brought with it an imminent economic crisis, review the characteristics of the brands that stood firm in the face of uncertainty.
Airbnb

The technology company has been able to recover in record time from the fall in tourism, and that the crisis could not have come at a worse time, since in January they were planning to go public.


Tesla

“Restrictions on mobility during the spring caused a radical drop in bookings on its website. Airbnb's greatest success has been to adapt quickly to the new habits of its regular consumers, focusing on offering stays close to the visitor's place of residence and disinvesting in non-strategic areas ”, highlights the consultancy.

Elon Musk's company has skyrocketed in stock market value 330% in the past year, surpassing Toyota and becoming the world's highest-valued auto manufacturer . The main factor for its success has been the very high productivity rate it has managed to achieve, to the point of being close to the annual production target of half a million vehicles. But what's really amazing is that Tesla makes a 23.5% gross profit on every car made.

The company continues with its plans to geographically diversify its production in China and Germany, something that has benefited them this year, mitigating the impact of COVID-19.


Amazon

The e-commerce giant started the year with many problems. As its demand grew meteorically, the news of imbalances in its logistics chain multiplied. Product shortages, shipping delays, strikes in logistics centers ...

But in just two months he turned the situation around. Jeff Bezos implemented a crash plan to overcome internal problems: general salary increases, training plans and many other concessions related to flexible hours. Since then, its profits have doubled and Amazon's stock market value has risen 40 percent.


Nestle

It is the company that has best known how to amortize the value of its food brands. When the pandemic altered consumer habits and the popularity of products such as soluble coffee or convenience foods increased.

It has also launched numerous innovations in line with new habits and has even bet on the health sciences business with the acquisition of a company dedicated to the development of food for allergy sufferers.


Ericsson

The Swedish company has achieved in 2020 one of its best historical years. Its gross margins have returned to 15 years ago and the forecasts could not be more positive in China, the United States and Europe.

The reason has its own name: 5G technology . Thanks to his clever moves in the midst of the trade war between the United States and China, he has established a leadership position in both the West and Asia.


Uniqlo

It has been one of the few companies that not only has not closed physical stores this year, but has increased their number, including with a huge interactive space, a mix of store and museum, in the center of Tokyo.

During the pandemic, they developed a mask adapting their breathable AIRsm fabric, which served as a hook product to increase the influx to their stores.
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Along with the severe health and humanitarian crisis caused by the coronavirus pandemic, executives around the world face enormous business challenges: the collapse of customer demand, significant regulatory modifications, supply chain interruptions, unemployment, economic recession, and increased uncertainty. And like the health and humanitarian sides of the crisis, the business side needs ways to recover. Ad hoc responses won’t work; organizations must lay the groundwork for their recoveries now.

The management theorist Henry Mintzberg famously defined strategy as 5 Ps: plan, ploy, pattern, position, and perspective. We have adapted his framework to propose our own 5 Ps: position, plan, perspective, projects, and preparedness. The following questions can guide you as you work to bounce back from the crisis.


1. What position can you attain during and after the pandemic?

To make smart strategic decisions, you must understand your organization’s position in your environment. Who are you in your market, what role do you play in your ecosystem, and who are your main competitors? You must also understand where you are headed. Can you shut down your operations and reopen unchanged after the pandemic? Can you regain lost ground? Will you be bankrupt, or can you emerge as a market leader fueled by developments during the lockdown?

We hear of many firms that are questioning their viability post-pandemic, including those in the travel, hospitality, and events industries. We also hear of firms accelerating their growth because their value propositions are in high demand; think of home office equipment, internet-enabled communication and collaboration tools, and home delivery services. Because of such factors, firms will differ in their resilience. You should take steps now to map your probable position when the pandemic eases.

2. What is your plan for bouncing back?

A plan is a course of action pointing the way to the position you hope to attain. It should explicate what you need to do today to achieve your objectives tomorrow. In the current context, the question is what you must do to get through the crisis and go back to business when it ends.

The lack of a plan only exacerbates disorientation in an already confusing situation. When drawing up the steps you intend to take, think broadly and deeply, and take a long view.


3. How will your culture and identity change?

Perspective means the way an organization sees the world and itself. In all likelihood, your culture and identity will change as a result of the pandemic. A crisis can bring people together and facilitate a collective spirit of endurance — but it can also push people apart, with individuals distrusting one another and predominantly looking after themselves. It’s crucial to consider how your perspective might evolve. How prepared was your organization culturally to deal with the crisis? Will the ongoing situation bring your employees together or drive them apart? Will they see the organization differently when this is over? Your answers will inform what you can achieve when the pandemic ends.


4. What new projects do you need to launch, run, and coordinate?

Your answers to the questions above should point you to a set of projects for tackling your coronavirus-related problems. The challenge is to prioritize and coordinate initiatives that will future-proof the organization. Beware of starting numerous projects that all depend on the same critical resources, which might be specific individuals, such as top managers, or specific departments, such as IT. With too many new initiatives, you could end up with a war over resources that delays or derails your strategic response.


5. How prepared are you to execute your plans and projects?

Finally, you need to assess your organization’s preparedness. Are you ready and able to accomplish the projects you’ve outlined, particularly if much of your organization has shifted to remote work? We see big differences in preparedness at the individual, team, organization, and national levels. The resources at hand, along with the speed and quality of decision-making processes, vary greatly, and the differences will determine who achieves and who falls short of success.

We have created a worksheet around the five strategic questions. It can help you plot your current and future moves. Be aware that consumers will remember how you reacted during the crisis. Raising prices during a shortage, for example, could have a significant effect on your customer relationships going forward.

The coronavirus has had unprecedented impacts on the world — and the worst is yet to come. Companies must act today if they are to bounce back in the future. Doing so will help the world as a whole recover — and, we hope, become more resilient in the process.

 

 

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The reality of how companies are dealing with the crisis and preparing for the recovery tells a very different story, one of pivoting to business models conducive to short-term survival along with long-term resilience and growth. Pivoting is a lateral move that creates enough value for the customer and the firm to share. 
Consider Spotify, the global leader in music streaming. In principle, this type of platform has all the ingredients for success in the lockdown economy: customers trapped in their homes who would like to escape from a depressing reality by listening to songs seamlessly streamed to a playback device without any need for physical distribution.

And yet the Swedish company struggled to find a pivot that would enable it to overcome a basic issue: Unlike Apple Music, Spotify disproportionately relies on free users who must listen to advertisements. Before the pandemic, the company figured that advertising revenue would grow even faster than the free user base, thus making a key contribution to the bottom line. Although the model was already showing some signs of maturity, its limitations did not become readily apparent until the pandemic hit and advertisers cut their budgets.

One pivot Spotify made in response was to offer original content, in the form of podcasts. The platform saw artists and users upload more than 150,000 podcasts in just one month, and it has signed exclusive podcast deals with celebrities and started to curate playlists. The shift in strategy means that Spotify could become more of a tastemaker. At long last, the company is doubling down on Netflix’s not-so-secret recipe for success in a business in which copyright owners enjoy healthy margins while pure-play streamers struggle to become profitable.

Pivoting definitely works for digital platforms, but does it help traditional businesses? Let’s examine the world of restaurants. They have been battered by the lockdown, with many owners pondering whether to close for good. The usual way to think about restaurants includes envisioning a seating area next to a kitchen. However, restaurants are kitchens whose output can be delivered to customers in a number of ways and using various kinds of business models. Eat-in, take-out, delivery, and catering are just the tip of the iceberg.

One pivot would be to offer a flat rate for a set number of meals per week or per month, with limited menu choices. Restaurants could increase their margins as they learned how to manage captive demand. Another pivot would be to offer a combination of precooked dishes with sides or additions that could be prepared at home using ingredients supplied by the restaurant. The restaurant could send a link to a video that walks the customer through preparation, thus incorporating an experiential and learning element. Deliveries could be in amounts large enough for several meals in a given week. Both pivots would lead to a greater variety of business models, which could become a permanent feature of the restaurant landscape, especially if the trend toward remote work from home consolidates over the long run.

The crisis has also led to broken supply chains, as reflected in the ominous images of empty supermarket shelves — a void that presented small farmers with a unique opening. After seeing their sales to restaurants and specialty stores plummet during the lockdown, many small-scale farms have set their sights on the needs of the homebound consumer. This pivot requires investments in information technology, marketing, and logistics that could prove profitable over the long run if the trend toward shorter supply chains gains momentum. Alternatively, some farmers and local stores are flocking to Shopify, the Canadian e-commerce platform, which has seen a boom in e-commerce activity at distances of less than 15 miles between sellers and buyers — a segment of the online market that behemoths like Amazon have traditionally neglected. Shopify’s key pivot has been to offer a comprehensive cloud-based bundle of services that help vendors manage expenses, pay bills, anticipate cash-flow problems, and optimize deliveries.

We’ve also seen large incumbent companies pivot during the crisis. As demand has soared for essential products, consumer-goods powerhouse Unilever has pivoted to prioritize its packaged food, surface cleaners, and personal hygiene product brands over other products, such as skin care, where demand has fallen. The company does not yet know which changes might become permanent. If the upswing in remote work endures, Unilever might find that some of its pivots will remain in place. In fact, the move toward in-home consumption might require a repositioning of not only food brands but also personal care offerings.

An even bigger threat to established brands is consumers’ increased willingness to experiment with different offerings during the crisis. Consumers are holding brands and companies to a higher standard than previously, favoring those perceived as doing more for society. Companies like Unilever and Procter & Gamble, whose portfolios include hundreds of brands, have no choice but to pivot in response. Brand loyalty can no longer be taken for granted, and brand repositioning may be necessary in many cases. But brand purpose and messaging will need to be laterally tweaked, not overhauled, because consumers are becoming more interested in safety, experience, and comfort as a result of the pandemic.

Not all pivots result in good business performance. Three conditions are necessary for such lateral moves to work. First, a pivot must align the firm with one or more of the long-term trends created or intensified by the pandemic, including remote work, shorter supply chains, social distancing, consumer introspection, and enhanced use of technology. For instance, if social distancing remains the rule for the near future, the casual dating platform Tinder will need to follow competitors Bumble and Facebook Dating in offering video dating.

Second, a pivot must be a lateral extension of the firm’s existing capabilities, cementing — not undermining — its strategic intent. Faced by the sudden collapse in travel, Airbnb moved swiftly to help hosts financially and connect them with potential guests. Hosts can now offer online events focused on cooking, meditation, art therapy, magic, songwriting, virtual tours, and many other activities, with users joining for a modest fee. This pivot represents one more step in Airbnb’s evolving approach from its traditional business model of facilitating matches between hosts and guests to its move to become a full-range lifestyle platform. In the future, online experiences could help travelers discover new destinations and on-site activities and help hosts offer better service. Airbnb could become a platform that people use not just to arrange their next vacation but to develop a cosmopolitan mindset throughout the year, learning about other cultures from a distance and celebrating the diversity of the world on a daily basis.

Third, pivots must offer a sustainable path to profitability, one that preserves and enhances brand value in the minds of consumers. The economic crisis triggered by the pandemic does not necessarily spell the end of entire industries or companies. It does weed out business models that fail to pivot toward the new reality characterized by shorter value chains, remote work, social distancing, consumer introspection, and enhanced technology use.
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The new business as usual is adaptability. Here are 5 examples of how business are pivoting to survive Covid 19.
Everything has gone out of the window – major spending holidays, seasonal planning, store expansions and so on. Physical stores are closed. E-commerce operations are struggling with demand or on pause. Factor in that we don’t yet know when this all might end, and it can all feel a bit paralyzing. Inaction isn’t going to help though. What retailers need is to pivot and adapt their business to the new situation – and to keep an eye on what is happening so they can keep adapting as things change.

Not sure how to do that? Here are five great examples of how businesses are pivoting to survive Covid-19.


Grocery brands turning stores into dark stores

Retailers with physical stores are seeing an interesting challenge right now. They’ve got all these brick and mortar assets that they can’t make use of because of social distancing restrictions.

Some are now pivoting though to turn those shut spaces into dark stores. This means they can use them to fulfil online orders instead.

The trend is strongest in the grocery sector, which makes sense given the huge demand for online food shopping right now. Equally though, grocery is one category where physical stores are still open and operational because of their essential nature. As such, you could question the decision to shut off those spaces in favour of operating them as dark stores.

It’s happening though. Whole Foods has closed its Manhattan Bryant Park store in NYC and Woodland Hills in California to make them dark stores. Sainsbury’s is doing the same thing in the UK with certain spaces in London.

The thing is these store pivots are carefully considered. City centre locations are favoured because they tend to be more densely populated which means greater demand for online services. By turning the local store into the online fulfilment centre you can serve more people faster because the distance from where the order is picked and packed and where it needs to go is way shorter.

In addition, these spaces can serve more customers overall as dark stores than if they continued to operate conventionally. This is because they can deliver to a wider area compared to their normal catchment of people living in walking distance of the store.


Uber starting on-demand retail delivery

Uber is a hugely successful business. It also relies on the movement of people.

So, at a time when people aren’t able to move around and social distancing is the order of the day, it makes sense for the company to pivot its model to transport other things rather than leave its drivers without any work. Those things now include ecommerce orders.

There are two strands to the new offering. Uber Direct offers retailers an on-demand delivery service to quickly get orders to customers at home. So far, products being carried range from pet food to medicine and even postal surplus.

Uber Connect is aimed at the individual customer letting them send items to another address in their city. For example, it might be food or care packages being sent to relatives, or even items sold online via local marketplaces. The service is being tested in 25 cities in the US, Mexico and Australia.

What’s interesting about this pivot is that Uber is looking to capture as much of the market as possible.

It’s not just going for the ecommerce retailers, which would make sense given that ecommerce’s biggest challenge right now is keeping up with demand. It certainly seems like the most profitable option for the business.

Instead, Uber is considering its true audience – human beings looking for convenience. By offering a service to move things on their behalf, Uber is ensuring that its customers don’t forget about it when travel is the furthest thing from their minds.


John Lewis adapting in-store advice services to be online

It’s one thing to pivot your business to sell online, but it’s another to take other in-person interactions and make them digital.

John Lewis offers a wide array of in-store advice and support services in its stores. With customers unable to visit it currently, the brand is pivoting to make these same services available online via video.

The appointments are free, and customers can talk to experts from different departments about things like home design, personal styling and setting up a nursery. After the appointment the customer is emailed further advice, mood boards and a personal shopping list – depending on the service used.

John Lewis is also leaning into the strengths of different communication channels. For example, the personal stylist appointments are booked via its Instagram page where stylists are also sharing tips and answering questions.

We love how personal the experience still feels. By using video, rather than audio only calls or a chatbot, customers can build a real connection with the expert – and therefore John Lewis. The virtual offering is also a great pivot given that – despite current global circumstances – some customers will still be experiencing major milestones, such as having a baby, and need expert advice.

Likewise, other customers may have extra time at the moment to tackle projects around the home or to clear out their wardrobe. Again, John Lewis is making sure that it is a port of call for them. Customers may not be able to visit its stores, but the brand is staying front of mind through virtual connections.


Secret Cinema at home

Secret Cinema is globally known for its go-all-out immersive cinema experiences where participants get to live and breathe the world of the film they’re going to see.

As such, social distancing and new rules preventing mass gatherings have put the brakes on the company’s business.

But instead Secret Cinema has pivoted to bring some of its magic to people at home via Secret Sofa. A different film is the focus of each week with participants signing up to the Secret Sofa newsletter to be part of the fun.

As well as finding out what the film chosen is (with info on which streaming platforms carry it), the email provides the usual Secret Cinema suggestions of costumes and characters to make viewers to feel part of that world. There are also playlists, food recommendations and more, and a different flavour of Haagen-Dazs can be ordered each week from Amazon Prime.

Look, this isn’t the same as a full-on Secret Cinema experience. But we have to applaud the brand for finding new ways to engage with their audience when they’re unable to leave the house.

Secret Sofa retains a social element as everyone starts watching the film at the same time on the same day. There is also a private Facebook group which invites people to chat before, during and after the film. This helps to get people into the spirit and to make the effort to participate fully rather than just watching the film in their pyjamas.


Restaurants becoming wine shops and takeaways

All around the world restaurants are having to close doors. While the need is understandable in helping prevent the spread of Covid-19, there’s no doubt that for many there’s a question of whether they’ll be able to reopen again.

Some, however, are pivoting to find new ways of serving customers at home. The Alinea Group has turned all five of its restaurants into takeout spaces. What’s more though, it has deliberately scaled down and changed the menu to make it simpler and more affordable recognising that most people won’t be dropping a few hundred dollars on one meal right now.

It’s not the only one doing the same thing. What sets Alinea apart though is that it also operates a restaurant reservation app called Tock. It has now pivoted this into Tock to Go allowing restaurants to take orders for collection or delivery.

Meanwhile, in NYC top restaurants are using their expertise and impressive wine collections into wine clubs and bottle shops. Their websites have now become wine shops with good quality wines being sold for a lower price than normal, but still a decent price compared to a convenience store ($20-40 on average).

Others are selling high-end and rare bottles to those with more money to spend as a way of adding a little luxury to quarantine life. Curated wine packages of multiple bottles are also being offered in the style of online wine clubs.

There are some hoops – licensing laws mean that food and snacks have to be sold with the alcohol – but it’s a great example of how businesses can pivot their model to make use of the valuable assets and knowledge they already possess.


 
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​There is no doubt that the Covid-19 pandemic took the whole world by surprise. Besides Bill Gates and very few futurists, not a single government have predicted such scenario where millions of people will be hit and consequently a global economic meltdown will bring businesses down and unemployment up. While this crisis will have to end better sooner than later, it will leave its marks and some deep scars on the society namely how we work, socialize, trade and entertain.
Focusing on the economic and business side of the equation, would we say that all sectors are being equally affected? Obviously not. Restaurants, hotels, fashion retail and movie theaters are hit hardest. Meanwhile, F&B, Pharmacies, movie streaming (Netflix), online communication platforms (Zoom, MSMeet,..) and last mile delivery to name a few are flourishing. Taking a closer granular look on this thriving segment, we realize that in reality, only brands and companies who built a multi-channel strategy (store, online, click-&-collect, mobile, call center,..) early-on with efficient logistic and seamless delivery process, are the true share winners (growing bigger that their industry average). More interesting is that most of those locals are nimble & relatively small-size companies like totters, Yala grocery stores and other new fast mushrooming players.

The question that comes to mind is: "Why for instance major retailers the like of BHV, ABC, or Aishti to name few, who all basically have the scale & resources to build multi-channel offerings have missed the train? with dire consequences on their revenues, financial health, staff moral, salaries cut, lay-offs and so on.

The answer can very complex like the well-known 'innovator's dilemma' principle that states: Under normal or growth conditions, moving resources to build new uncertain offering will take away from generating more revenues in existing ones. Thus by refraining to invest in emerging products, they left the entire floor open for new players to fill the gap and gradually take on their customers,

But in Lebanon, the most likely answer is yet simpler. They all adopted the old-time famous business inertia:"If it ain't broken, don't fix it."

In other words, why bother to invest in new channels as long as they can have customers coming to them? why canibalize brick-&-mortar revenues by selling online? Their baseline assumption is that customers are a uniform and static entity with minor deviations and overall stable & predictable needs & behavior! We call this having a 'Fixed mindset' or a mental frame of mind that beleive that things are set and no effort can change them.

But then why elsewhere retailers and even the same brands they carry have all provided customers with multi-channel options in most markets despite their widespread geographical stores footprint? Again we often hear the conveniently simplistic answers: Lebanon has a small geography and people can easily commute to their stores. Or there is not enough demand to support alternative channels profitably.

To check, let's put some (pre-Covid-19) facts on the table :
  • According to the last available data, e-commerce generated US$ 341 million in sales in 2016, representing a 9.8% growth from 2015 (US$ 310 million).
  • The market is characterised by a general interest in cross-border trade - for both Pan-Arab and international websites - and the lack of a local general retailer giant. Ali express is one of the leading e-commerce sites in Lebanon, while Amazon only offers limited delivery, mostly of books.
  • 2.3 million people shopped online in 2016, compared to 2.1 million in 2015, which represents an annual growth rate of 9.5% (State of Payments, PayFort 2017). Younger age groups (below 30) are the most active online users (50% of internet users). Regarding income levels, mid-income category (US$ 533 to US$ 1,065) had the most active online shoppers. The top shopping categories were clothing (44% of online shoppers) and travel services (42% of online shoppers) while electronic equipment (tablet, TV) were among the least bought products (PayFort). Lebanese people tend to shop online mainly for three reasons: competitive prices, group offers and exclusive products.

In other words, Lebanese consumers have spent abroad multi-millions $ amounts for things & reasons that could have been easily provided by any enlightened retailer or company. That would also have limited the foreign trade balance deficit at times where hard currency is literally hard to find. We call it having a 'Growth mindset' meaning having the willingness to change status-quo by exploring and opening up to new realities

Back to today with Covid-19 putting its toll on personal revenues, the conventional wisdom might say: "who wants to buy clothes or not-a-necessity items in time of crisis with purchasing power dwindling?" Here again the answer might sound simplistic: No one. Looking closer and according to 'RedPoint' a global IP protection firm recent research on impact of Covid-19 on e-commerce sales reveals different realities:
  • 58% of customers are buying more online than usual
  • 73% of respondents will further increase their online shopping compared to in-store if COVID-19 outbreak continues
  • 59% of U.S. shoppers are making more snap purchasing decisions in light of the pandemic
  • 60% would increase online shopping if they were worried about catching the virus in stores

Here's what it means in terms of some emerging opportunities:
  • The internet is quickly becoming the only place for shoppers to get what they need, whether basic necessities or gadgets to pass the time. Also in a similar category would be board games, puzzles, journals, and musical instruments.
  • Demand for office supplies has grown as more people are trying to work from home, and the same is happening with homeschooling materials.
  • Personal care products, household products, and packaged goods are at the top of the list. This makes sense, as people want to stock up on items that they regularly use or consume in daily life.
  • With more time inside, people can treat themselves to at-home spa days. Home exercise equipment may also see an increase in demand so people can stay in shape while avoiding the gym.

The big question is whether this short-term increase in online shopping will translate into long- term change. If people who are new to online shopping have positive experiences, they may continue to incorporate more ecommerce purchases into their spending habits. More so, brands need to establish a continuous insights-generating mechanism to gauge consumers sentiments, identify the 'over-served or under-served' segments of customers who can represents early wins opportunities and build a proper channel-market fit i.e. matching customers with their preferred channel. Without insight into future growth, companies will drag behind the growth trend rather than ride it from the start.

When combining Covid-19 with a structural weak economy in a downturn, moving may be the last thing on CEO's minds. As revenues slow and margins are squeezed, management switches its focus to cutting costs to maintain earnings. This being legit as survival becomes the #1 priority. Nevertheless smart re-allocation of resources and small scale agile foray into promising new adjacent offerings, prototyping of innovative business models and multi-channels delivery to meet the customer where he is right now (in home) may be an equally important salvation act by generating new revenue streams for the company. Worth mentioning that it will also allow them to re-allocate their idle or unemployed human capital into fulfilling new functions mandated by new model and re-skilling them towrads future business needs and standards.

What should not be an option is inertia which can quickly deplete value for shareholders and even bring the company to a near-death experience ( remember Kodak, Nokia,..). Here lies an important difference between winners and losers. While big gains require big choices (most of share-gain winners had a distinctive business-model with multi-channel advantage), you don’t have to do much to qualify as a loser. Adopting a passive posture may well be enough and the market and everybody will notice it soon enough.

In summary, the Corona crisis just confirmed the famous Darwinian 'Survival of the fittest' theory. Brands that invested in multi-channel delivery & logistic are reaping the greatest rewards while those who adopted a 'Build it & they will come' or a 'wait & see' old fashioned approach have simply ceased to engage with their customers and are completely shut-down proving that nowadays either you are multi-channel or you simply are not existent.


Should you want to have a conversation about this topic & more, do email me at joe.ayoub@brand-cell.com.
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As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges.

With every industry, function and geography affected, the amount of potential change to think through can be daunting. We are here to help.

On this page you will find expert perspectives from our leaders that provide insight paired with tangible actions your organization can take to turn massive complexity into meaningful change.
Impact on Systems

COVID-19 is pushing companies to rapidly operate in new ways, and systems resilience is being tested as never before. As businesses juggle a range of new systems priorities and challenges― business continuity risks, sudden changes in volume, real-time decision-making, workforce productivity, security risks―leaders must act quickly to address immediate systems resilience issues and lay a foundation for the future. Leaders in the chemicals industry, for example, are recognizing resilience as a key success factor.


Impact on Experience

The global COVID-19 pandemic has forever changed our experiences―as customers, employees, citizens, humans―and our attitudes and behaviors are changing as a result. Once the immediate threat of the virus has passed, what will have changed in the way we think and behave, and how will that affect the way we design, communicate, build and run the experiences that people need and want?

The answers to these questions will be revealed in the ways people and businesses react and find innovative ways to rise above these challenging times. In consumer goods, this crisis is fundamentally changing how and what consumers buy and is accelerating immense structural changes in the industry, for example.


Impact on Operations

Business process functions across most industries are severely disrupted due to the immense pressure of the pandemic crisis. For many multinationals, complex and business-critical services that are handled by global operations must be reassessed and restructured. Organizations must respond rapidly to maintain continuity and to de-risk their operations to serve their businesses now, and in the future.

Adopting a distributed global services model can help large organizations across industries—from oil and gas to communications and media—to diffuse enterprise risk. And automating routine tasks with human+machine models, where everyone is a knowledge worker, can also help to serve businesses now, and to position them for growth post-COVID-19.


Impact on Commerce

While Direct-to-Consumer and B2B organizations scramble to meet immediate and emergency needs, the Coronavirus pandemic has activated a new wave of commerce innovation. New buying behaviors are forming that are likely to remain after the crisis has passed – and this presents opportunities. Those who viewed digital commerce as a secondary channel, now need to reprioritize their business with a digital commerce focus. For example, retailers are rallying to provide “contactless” delivery and curb-side pick-up services for consumers.


Impact on Customers

The impact of the coronavirus outbreak requires companies to move at an unprecedented speed and that means re-evaluating how contact centers are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support the increase in contact center volume.

During this time, leaders that can shift to new ways of working help to reduce potential revenue loss, forge new levels of trust with their workforce, and position their businesses for renewed growth once the pandemic subsides. Consider banking, for example, where social distancing restrictions will push customers toward digital channels for service and increase the need for a connected, responsive team.


Impact on Supply Chain

Now more than ever, the supply chain is critical. Companies need to supply goods and services quickly, safely and securely—especially to those at risk of infection or who are working at the frontline of the medical response, such as life sciences companies developing COVID-19 tests and treatments. While meeting this unprecedented demand, companies have a responsibility to protect the health and welfare of their employees, their supply chain workers, and the wider communities they operate in, while maintaining the required flow of products and materials.

Companies need to develop a rapid response to address the current disruptions and strengthen operations in preparation for future value chain risks. 


Impact on Leadership

The greatest immediate impact of the COVID-19 outbreak is on people. Organizations are focused on caring for their workforces while rapidly managing the shift to new patterns of work.

At this critical time, leaders must see through these changes in ways that gain and maintain the trust of their people. That trust depends on leaders demonstrating their care for individuals as well as the wider workforce and community. It means sharing a clear plan and transparently showing how decisions are made. And it requires leadership teams who can proactively respond rather than react, anticipating their people’s changing needs. This is particularly important in Public Service organizations, where leadership needs to calm markets and reassure citizens, businesses, government employees and community stakeholders.


Impact on the Workplace

Key initial impacts of COVID-19 are the need to manage an immediate shift to remote working, along with preparing for higher rates of sick leave. These evolving challenges can be addressed by creating an Elastic Digital Workplace. Implementations will differ for each organization, but they should be based on the following foundations: to protect and empower your people, serve your customers, core needs, and to establish business continuity. For example, the now critical need for virtual care messaging and visits in healthcare.
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No one saw it coming, which can be said for any crisis. It’s in times like these that a brand’s true self is exposed. A brand’s core values come to light instantly; as a reflex. For the brands that have a solid foundation in how they treat their customers and employees, it is easier (not easy). For the brands that are posers, retrofitting their values stance is extremely difficult, if not impossible, to come across as believable.
Over the past few weeks, we’ve seen brands and businesses step up in a variety of ways, but each effort aligns with a set of core values that guide a huge segment of our country. I’ve been impressed with how brands have leaned into faith, community and family as this crisis has unfolded. 

From marketing messaging and philanthropic actions to business operations and product innovation, the good brands have redistributed their resources to promote unity when we’re socially distanced. 

Here are nine brands that are doing a phenomenal job:

KFC: The brand is part of YUM Brands, whose CEO, David Gibbs, funneled his salary for the rest of the year into employee bonuses and a fund for COVID-19 relief. At a more local level, KFC donated $400,000 to Blessings in a Backpack, which provides meals to children when they’re away from school, to help the nonprofit with increased demand from school closures. With 1,092 program locations across 45 states, Blessings in a Backpack has direct impact in cities across the country, with seventy-eight percent of kids saying the program makes them feel cared for by their community. In addition, KFC corporate has delivered 1 million pieces of chicken to its franchises to give away as a part of local food drives, especially for first responders. 


Perdue Chicken: As the fourth largest producer of chicken in the United States, Perdue Chicken, employees of plants in Milford, Delaware and Perry, Georgia have recently been exposed to the virus, and the company has implemented appropriate protocol. To show appreciation for the people continuing to power the plants, company Chairman, Jim Perdue, shared two videos on social media, which became T.V. ads. Shot as a selfie, the videos included a heartfelt message from him thanking “the people who feed America” during challenging times. The spots from the company founded by the outwardly religious, Arthur Perdue, were titled “We Thank You” and “A Time Like This,” with the latter headline evoking a message of faith. 


Ford Motor Company: On their journey to become the “world’s most-trusted company,” Ford has made some great moves in response to COVID-19. Putting competition aside, Ford and GE Healthcare joined forces with 3M to assist in the production of health equipment including respirators for those who are having trouble breathing due to the coronavirus. Being sensitive to the fallout from the pandemic, Ford is also shifting its focus away from selling to new customers and towards relieving stress of current customers. The company stopped running ads promoting its Escape and Explorer models and replaced them with informational spots about a car payment relief program that gives customers respite from their monthly expenses. Both moves are consistent with the company’s response to global and national events in the past. During the world wars, the company led manufacturing efforts and built tanks and planes. In response to natural disasters, Ford has offered relief in the form of similar programs that it’s extending to customers now.  


Nike: From nearly every angle, Nike is attacking COVID-19 through community. Headquartered in Oregon, one of the states hit first and hardest by the virus, Nike is showering organizations in the area with donations. They’ve committed millions in funding to Oregon Food Bank, the Oregon Community Recovery Fund and Oregon Health & Science University. The brand also switched up its advertising angle. The brand that equips customers with apparel and other products to get active outside encourages viewers in a new ad campaign to play inside not just for themselves, but for the world. Social posts tapped into customer attitudes of fame and recognition for being the best in their field. One graphic in particular read: “If you’ve ever dreamed of playing for millions around the world, now is your chance.” Influential sports figures including Pete Alonso, Cristiano Ronaldo, Tiger Woods, and Michael Jordan echoed the statement through their social platforms, infiltrating a conglomerate of communities with the message. In another notable community-oriented deed, Nike is giving free access to premium training programs through its Nike Training Club app. 


Mattel: Mattel has an impressive catalog of content from its suite of brands which includes Barbie, American Girl, Fisher-Price, and Thomas & Friends. Through cross-collaboration, the toy manufacturer organized the Mattel Playroom, an online resource chock full of free activities and entertainment for kids. The playroom enriches the lives of children and parents, providing a welcome distraction during a time of uncertainty. Companies like Mattel are translating their missions for the current situation. “Our mission to inspire, entertain and develop children through play is more important than ever,” Richard Dickson, President and COO, Mattel said. 


Spectrum: Imagine that you’ve been ordered to work from home and that your children can no longer attend school, but all of you still have tasks to complete and you don’t have reliable internet. That’s the reality for many people across the country right now. Spectrum has decided to offer families with students in K-12 free internet services for two months. This is a huge sign of goodwill that empowers families during this difficult time. The company is enabling parents to provide for their children and students to continue their education outside of the physical classroom. 


Scholastic: The publishing company presented an opportunity for families to get back to the centuries-old tradition of story time in a modernized format via social media. Its #OperationStoryTime campaign enlisted the help of authors and celebrities who shared videos of themselves reading books with the intent that children would listen in. It’s great to see a company utilizing its resources and networks to build points of connection back into the family unit where it may have been lost in the shuffle of our previously hurried lives. 


Einstein Bros. Bagels: This food chain is taking a micro and macro approach to supporting people who are struggling to access food or balance new stressors during mealtimes. On the macro level, Einstein Bros. Bagels is helping families streamline meal prep with takeout Family Meals designed to feed several people and to make meals a chance to gather and enjoy positive conversation. Locally, however, the company is supporting food banks, fire stations, police departments, and schools by donating 13 bagels for every Baker’s Dozen Box that guests purchase. 


Little Caesars: The company is donating 1 million pizzas to hospitals and first responders across the country in addition to the Pie it Forward initiative where customers can donate pizza. The 1 million pizza donation is made possible by Little Caesars, its independent franchisees and their locally owned stores, and Ilitch Charities. The company’s marketing department is pivoting too, putting a new spin on their product’s features. New spots highlight its pizzas’ from a health angle, showing that they’re cooked at 475 degrees and aren’t touched by a human hand from the time they come out of the oven to when they land on your kitchen table. 

After reviewing the selfless responses brands have had to the coronavirus outbreak, it’s refreshing to see marketing used outside of the process of selling a product. Brands play an important role in bringing people together through values they share with their customers. Thanks to those brands that are living their values.
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The economic situation is very difficult as we know on everyone and on every business, mainly the local ones. This is why the first measure that every Owner/CEO/MD is taking is reducing cost and expenses: laying off employees, stopping training programs, reducing or canceling consultancy & advertising agreements etc…this is maybe understandable because Companies are in a survival mode trying to rescue what is remaining from their business. 
But if we think differently about it for a moment, these measures will fire back because if every company be it small or big, local or regional start doing the same thinking putting their company direct interest first, the result will be affecting more and more the other companies they are dealing with and it will have a ripple effect that will return to hurt them as the whole economy suffers. 

We need to acknowledge that all the pieces of an economy are interconnected and when firms cancel a not-so-urgent investment, they are reducing revenues for a number of people who in turn will not be able to purchase the company’s products or services. It is a circular economy that acts like a boomerang.
A good example is what is happening with the banking sector. Everyone knows that if we keep rushing to withdraw cash to be saved in homes, the faster the banks collapse would be. But yet each individual think for himself without admitting that he/she is part of an ecosystem that is threatening to break down on all of us!

What should be done instead is actions driven by a solidarity spirit, trying to support as much as possible each other in this difficult time by avoiding canceling contracts, reducing wages, firing people but instead re-orienting all resources towards what is needed today, changing the priorities; the strategy not the purpose. Exploring and developing innovations & new business models that the new emerging real economy mandates.

By doing that Companies will win on the mid & long-terms as they play a wiser role in reinventing themselves while supporting the smaller providers maintaining the viability of all business sectors ecosystem, vital to sustaining the Lebanese economy .

Cutting cost, although easiest step to make, must not be done without first rethinking what the near future would look like and rather explore smart & fluid reallocation of resources, Strategic Thinking and Scenario Planning should be though off to find the right solutions that may not be obvious at first. 
Solidarity is one of those key themes that could become an overarching strategic plan that can keep us all on the boat and avoiding the ship from drowning by self-inflicted holes.

This Solidarity Theme was dominant in the October Revolution on social and human levels and should be dominant as well on Business level for Lebanon’s sake. “One for all and all for one” should be our new motto.

Carole Ayoub
Partner & Senior Consultant at Brandcell
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