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Brand 2.0 and Beyond

Brand 2.0 and Beyond:
The post Covid opportunity for consumer brands

This blog is based on our 3rd session of Guts Glory & Story –  The interview with Kanwal Singh – MD and CEO of Fireside Ventures.

Some additional inputs have been added based on our own research as well, but the piece broadly reflects the content extracted from the rich conversation.
Link to the recorded video is at the bottom of the page. 

The case for brands 2.0: Disruption of media and distribution

In erstwhile years, the darling of all campuses was the FMCG sector. And within the FMCG sector were the usual favourites  – Hindustan Levers, Procter & Gamble, ITC, Nestle etc. These were the FMCG behemoths having a slew of brands which were literally household names. Their business empire was impenetrable – standing on the citadels of deep distribution and big media. Both these citadels needed scale. All of them boasted of deep distribution and deep pockets to afford the so-called ATL or Above-the-line advertising which included television commercials -the iconic 30-second spot plus radio, outdoors and print. And the huge investments needed for both kept the business well insulated from newer entrants.

About 10 years back though newer developments began to disrupt the order of things. E-Commerce came into play with the Rise of Amazon, EBay, and later Flipkart and many more similar players. And there was a rapid rise in new media like Google And Facebook, followed by other platforms. The citadels began to have cracks and the FMCG opportunity was open for democratization. The most important development was the shift in consumer behavior. Consumers were looking at choices that reflected what they cared for. They were not happy with cookie-cutter solutions anymore.  Here is where new-age brands came into play. Brands that were born out of a passion for a space that reflected consumer tastes and preferences and which would deliver directly,  bypassing the conventional distribution channels through media that was not so expensive at all. Brands like Paperboat etc were the early ones that took advantage of this trend. Other examples are brands like Epigamia, Pepperfry, Urban Ladder, Licious, Bombay Shaving Company, luggage brand Away and Wingreens amongst others.

Covid: The Turbo button

While this shift to new age brands was already work-in-progress, pre-COVID, COVID only acted like a big turbo button to speed dial the trend. COVID accelerated the adoption of digital media. With touch and feel out of the way, going to digital channels even for the most basic needs became the order of the day. Even senior citizens started becoming friends with digital transactions, payments and e-commerce. On the other hand, digitisation was no more an option even for smaller hyperlocal brands. They also were forced to jump on the bandwagon. Local grocers were accepting digital payments, accepting orders on WhatsApp and got comfortable, not depending on the physical shop. The digital playbook got a huge boost. Direct-to-consumer is now no longer avant-garde. And now there is a third trend that is going even beyond the playbook of brands 2.0. And that is the rapid digitisation of another category of brands that were into services.

Content, Community and Commerce: The new Covid-sponsored opportunity

Take the example of some brand which ran physical classes at multiple locations – Sarva – the yoga studios, a Fireside investment is a case in the point. The business was doing well and then suddenly COVID struck and business overnight came to zero. The brand rapidly rushed to digitisation of its classes creating content and digital experiences online. Right from meditation, breathing, pranayama to asanas – there was content now that could reach anyone without the limits of geography. Sarva is now doing 3 times the volumes as compared to the pre-COVID period. We are sure there will be more examples in other domains. Sarva is now looking at billion-dollar businesses like apps like Calm and Headspace. The higher e-commerce opportunity should be used by traditional experiential brands to create content, community and digital experiences to drive robust commerce.

Bucking the discounting trend:

The important part of the journey of brands 2.0 is that they break the misunderstood perception about online brands being cheap and discounted. As a matter of fact, because these brands are crafted on a well-understood niche, they tend to satisfy consumer needs more intimately. They tend to pay attention to what consumers are saying, have a dialogue with them, are conscious of packaging thus creating intimate relationships.  They are therefore a little more expensive. Licious, Vahdam Teas are examples of brands that are not built on the ‘cheap’ premise. Most of these brands live on consumer reviews and have really high ratings. These ratings, reviews from influencers and customers alike enable them to charge a premium to their offering.

Brands built for the Agile World:

Brands 2.0 are not built on the old world of marketing – depending on the monolithic consumer research belted by a big research agency which led to a big TV commercial on all big TV channels followed by front-page ads, Instead they have a constant dialogue with the customer. They invest marketing money through A/B tests in an agile manner constantly optimizing the message, tweaking every iteration to pack in more bang for the buck. They use performance marketing, live and breathe data metrics and use these metrics to constantly fine-tune marketing, product SKUs, product iterations and also their service. They work with bloggers, influencers, reviewers and even collaborate with their customers to make this intimacy even more pronounced.

The growth rate of brands 2.0 is rapidly accelerating:

The best part of Brands 2.0 is that the time taken to reach an ‘X’ revenue figure is decreasing every passing year. For instance, it took Paperboat 10 years to reach an ‘x’ revenue but it took Epigamia just 7 and Licious just 3. And all of this is happening at much lesser investments. And this is all thanks to an increased consumer openness to experiment, faster digital adoption and democratisation of the media opportunity. New players thinking of launching consumer brands must capitalise on this virtuous cycle.

New Covid Niches for upcoming ideas for consumer brands:

Post-COVID, apart from massive digital adoption, there have been huge shifts in consumer behavior. A lot of these changes might be here to stay. These changes are creating various niches for completely new business ideas. Here are some of the niches that COVID is creating – Health – People are increasingly conscious of health and immunity – opportunities for pharma, beauty, skincare, and food products that can capitalise on this and build products that can address it. Work from Home: Opportunities for technology products that make working at home easier – ergonomic furniture for home offices, headsets, connectivity solutions, work from home apparel (WhyNot!), physiotherapy sessions for those strained backs from long working hours, yoga and mediation sessions, workouts at home etc. Food:  Increase in-home cooking, ready mixes, sauces, exotic ingredients, cooking apps, recipe apps, food delivery brands, small specialty restaurants, tiffin services etc. Content and Learning: With so much time being spent online, all kinds of learning will move online – right from your child’s learning to hobby classes for the wife to executive career-advancing learning to spiritual sessions for senior citizens Entertainment: There has been a massive upsurge in Netflix and OTT usage, and all ideas around home entertainment, gaming, e-sports will see a massive surge. There will be opportunities for stand-ups, artists to build smarter solutions for their audiences. Protective Gear: PPEs, gloves, masks, sanitizers, air purifiers and all kinds of brands that will offer high protection. Pet care: One of the categories that experienced a surge in spends in India is petcare. This will be one domain to see smarter brands to emerge. These are just some examples. As we uncover more stories, more such niches are coming forth.

New age Consumer brands are built on passion:

New age consumer brands are not built on stacks of statistical analysis, but rather a passionate entrepreneur excited about a niche he wants to fill. It could be a passion to take yoga to every home or a niche to provide a clean sanitized and hassle-free way to buy meat. These things can’t be done while doing a full-time job, You have to be all-in, and fully committed. It’s only when you take the risk, that an investor will put in money. And in some cases, you will go a long way without a VC investment.

Lastly, always remember Valuation comes only if there is Value:

A clear clarion call is – Forget valuation – Focus on creating value.
If you create value consistency the valuation will come.

For the full interview, click here..

– Sangram Surve

Guts, Glory & Story © 2020. All Rights Reserved.

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COVID TALES

The-Resurgents-Blog

The Resurgents:

Winston Churchill is attributed the above line when he was in Yalta and used the crisis represented by the World War 2 to seed the formation of the United Nations between the unlikely trio of himself, Roosevelt and Stalin.

The word crisis represents unprecedented change – the kind of change that disrupts the current order of things. It’s an out of syllabus question. Something that’s out of our comfort zone. Out of our rule book. It’s our most feared enemy – the Unknown.

When Covid 19 came knocking at our doors in early 2020, it had all the features of a mega crisis. Things have gotten so bad, that Covid and 2020 have become synonymous for typical ‘between devil and the deep sea’ kind of situations. “Shit man, 2020 happened to me today”.  We have been affected in many different ways, since Covid is simultaneously a health, humanitarian and an economic crisis. Unfortunately, we cannot control to large extent, how Covid has done to us. But we can control what we can do about it.” And the premise of this whole series is to pick our response to Covid. Covid was given to us. Let us pick what we give back to Covid!

The current order of things is completely disrupted. Maybe some aspects of the way we used to do things may come back, but a lot of things are going to change for good. And when things change, especially for good, its wiser to change ourselves. For if you don’t, you will waste a lot of wisdom Charles Darwin left the world with. Adapt. Change. Learn the new rules. Darwin gave us a hint – The fittest survive. The ones who adapt, live to tell the tale.

These series of articles are meant to get a hint of the new rules. So in a sense it’s an attempt to uncover the Covid Playbook – The Word Playbook may look it’s a business strategy focused initiative. Actually its far from it. For the wisdom (If it at all it emerges) is not from me but rather the experiences and stories of various people coping with Covid. This series will have less gyan and more stories. Stories of you and me and people like us. People struggling with personal loss, financial crisis, disruption in business, anxieties of the future, loss of income, and then the resurgence of the human spirit, the innovations, the new beginnings and fresh learnings – attempts to understand the new order, learn the new rules, adapt, change and hopefully make Mr. Darwin smile.

The playbook is based on our conversations with lots of people – young, old, married, single, students and working professionals, artists and entrepreneurs. The lessons emerging from these stories are organized into themes – each of them landing in the Covid Playbook. How Covid19 has attacked us, and how each of the people in these stories responded back. Some of the new rules uncovered may be helpful to you. And you may also add some new dimension to the new rules making them your own. And while our twin series on Guts Glory Stories focuses on industry perspectives and trends, Covid Tales focuses on micro-stories. 

So here goes our first one:

Covid Playbook Rule #1: Geography is Dead

How a small yoga business from Bandra to Borivali now caters to Los Angeles, France and Pakistan.

Ritesh Shah is a young yoga teacher who runs a Yoga Studio called RS Yoga. Having started off early in life, he had a healthy set of loyal clients whose homes he visited every week for conducting personalized yoga sessions. He operated from Borivali to Bandra, starting as early as 4 am in the morning and conducting as many as even 12 sessions in a day. Ritesh’s warm disposition makes him a much loved instructor and a favorite amongst his clients. His popularity ensured that he always had more demand than he could ever deliver. But a day only has 24 hours, and he could only squeeze in as many sessions, given his commute time between sessions. He always explored the option of marketing himself online and did his best with rudimentary efforts to establish a digital persona.

And then suddenly Covid happened.

Given the intimate nature of his work, the lockdown immediately impacted the quantum of work. All home visits pressed the pause button immediately. From 20 sessions the business came down drastically. Cash flows were hit and no one knew how long this would last. So, he did what the world around him was doing – Take the sessions online. Now that involved 2 things – learning the online game. And then figuring out how many people were willing to accept the online medium to continue the classes. Lastly, if they did accept it, would they be happy with paying the same fees? Let’s worry about whether people would join in later, Ritesh thought. Might as well focus on his own learning since that was in his own hands. He managed to figure out Google Hangouts, Facebook Live and thought of even conducting classes on WhatsApp Video. He was now ready to take his class online. Next was to speak to people and ask them if they would like to continue online. To this end, he discovered people were still wary of signing up. Slowly though the Work-from-Home and Work-At-Home routine began to get to people and most of them realized the importance of health. They all needed yoga, pranayama and meditation all the more. Most were also missing the regular sessions, interactions etc. Slowly, people started showing interest in starting online. Ritesh now realized that if it was a matter of practicing yoga online, combining batches would not just save him time but also offer a chance for batches to have some social interaction. Ultimately Ritesh was able to conduct all 20 batches in the time slots of just 5 batches. All saved time was spent learning digital marketing to expand the customer base. He used to serve clients between Bandra and Borivali earlier. Today he has batches in Los Angeles, Dubai, France, Baroda and one batch from Pakistan too. Ritesh is not just digitally savvy today but caters to 100 % more students post Covid. His enhanced social media presence attracted two sports brands to appoint him as a brand ambassador for their yoga mats. “Covid may have shut down many borders, but it opened up quite a few for me”

Covid Playbook Rule #2: Explore a new business model

How a COVID affected events business is trying to invent a new business model.

Hemal is a seasoned event industry professional. After a long stint in various Event marketing agencies including Percept, Hemal embarked on her own and launched Mercury Integrated – a boutique Events, Communications and Marketing services company. In 2012, She launched Weddings by Mercury – a specialized division of Mercury focusing on weddings. Everything was going very well and two international events were lined up for March this year. Little did anyone know that Covid was creeping in.

The nationwide lockdown sponsored by Covid gave a heart attack to a number of industries and the Events industry was one of the first to bear the brunt. Needless to say the two international events were cancelled and business and cash flows came to a complete standstill. Months went by but no solution seemed to be forthcoming. Everyone was cooped up in their homes. With the social scene slated to be absent for a long time, no events were going to be possible. Yet, Hemal observed that the need to celebrate hadn’t disappeared. She saw that people were still improvising. Housie was being played on Zoom. Birthday cakes were being cut and even Antakshari had made friends with Zoom. That’s when it struck her that if one can’t leave the safety of the home to go to the party, why not bring the party to the safety of the home. That’s when she thought of Maison by Mercury a home party solution. Maison – meaning Home in French was a solution to bring themed parties to the home. The solutions include pre-plated contact-free food, readymade easily installable decor themes and musicians and artists who can perform online. She is confident that even post Covid the home celebration trend will stay and home parties will be big. Some online components will move offline and become more intimate. Its early days, but a new business model could emerge from the limitations of the current crisis. She has already got her first event and is now learning digital marketing to scale up from there.

– Sangram Surve

Guts, Glory & Story © 2020. All Rights Reserved.

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