Non-essential shops are open again in England today, but the outlook is grim for some big names. Kantar’s Jane Bloomfield says it’s time for a fundamental rethink of business strategies.
The collapse into administration of high street giant Arcadia followed by the saddening news about the downfall of yet another British retail stalwart in Debenhams has sent shockwaves through our homes and high streets. This couldn’t have come at a worse time as thousands of employees now face an uncertain future close to Christmas.
The future of a string of well-known British brands, including Topshop, Topman, Dorothy Perkins and Burton, hangs in the balance as new buyers are sought.
If any brand needed proof of the need to think fast and be quick on their feet, they have had it in 2020. For Debenhams the pandemic was the nail in the coffin.
The global pandemic has turned upside-down accepted norms about the way people work, learn, exercise, socialise, shop, plan and generally live their lives. In the eye of the storm, agile brands were ready to redirect resources, make sacrifices and do whatever was necessary to help.
What’s important for British brands to remember once this is over is that there will one day be another crisis. Businesses need to be prepared – not with a prescriptive action plan, but with the flexibility to adapt to pressures that can seemingly come from nowhere.
Many of the brands that have been hit hardest, including Debenhams, were already battling to keep pace with changing market conditions; those who have thrived in the time of COVID-19 have done so not just because they happened to be in the right industry, but because they were on the way up anyway, having invested in building a brand that is meaningful to consumers and is perceived as different to everything else in their category.
Focus on innovation
In 2019, Kantar issued a rallying cry for UK brands to focus on innovation as a route to creating the meaningful difference on which brand value depends. We pointed to a dangerous “innovation gap” that stood to cost brands both sales and long-term brand equity. Then the pandemic happened, and the gap opened up into a chasm.
Brands that adopt a sluggish approach to change and fail to meet consumers’ changing needs in a meaningful way are suffering as today’s news demonstrates.
It’s time for British businesses to consider a fundamental rethink of business strategies, especially when more than 90% of business leaders in the UK believe changes in consumer behaviour established during the pandemic will remain long after it is over.
This year’s trading conditions are expected to continue well into 2021 and beyond. One of the key things British brands must do to remain strong is re-imagine the customer experience in a digital environment. A strong brand not only delivers superior shareholder returns, but also remains more resilient and recovers more quickly during times of crisis.
To put the ‘great’ back into Great British brands, businesses must first innovate meaningfully by adding value to consumers’ lives in creative ways and encourage positive and sustainable behaviours. Secondly, businesses need to communicate creatively – create strong and positive emotional associations with the brand to ensure growth. Thirdly, brand build responsibly – build trust and loyalty through purposeful behaviour. And finally, digitise daringly – provide consumers with a great online user experience.
It’s crunch time
The situation facing UK brands is nothing short of dire. The 13% drop in brand value this year is significantly deeper than the forecast decline in the global economy (4.9% as of June, according to the International Monetary Fund).
Only ten brands from last year’s BrandZ UK Top 75 have increased in value in the past year, and seven have dropped out of the ranking entirely, usurped by some of the UK brands that are taking bold decisions about how to strengthen their brand equity.
This downward trajectory means that at the current rate of decline, there will be no UK brands in the BrandZ Global Top 100 by 2023 – one year earlier than we were forecasting just last year.