Poor briefs erode marketing budgets

As much as one third of marketing budgets could be wasted due to poor briefing, new research suggests.

That’s according to the BetterBriefs project, the first-ever global study (based on the opinions of 1,700 marketeers and agency staff from over 70 countries) into the shortcomings of marketing briefs, revealed at the IPA’s EffWorks Global event.

Why it matters

Respondents estimated that a third of the marketing budget goes to waste due to poor briefs and misdirected work. Both marketers (69%) and agencies (73%) agree that rebriefs happen too often, leading to loss of time, money and fuelling frustration on both sides.

Key findings 

Marketers and agencies are on different planets

• It’s not a new finding but the differences remain stark: marketers (80%) think they write good briefs, but only 10% of creative agencies agree. 
• Over three quarters of marketers (78%) think the briefs they write provide clear strategic direction, but only 5% of creative agencies agree.
• Marketers (83%) believe that the briefs they write contain clear and concise language, but only 7% of agencies agree.

Briefs are essential but neglected 

• Both marketers (89%) and agencies (86%) agree that it’s challenging to produce good creative work without a good marketing brief. But almost all marketers (90%) and agencies (92%) also agree that the brief is one of the most valuable and paradoxically most neglected tools marketers have to create good work.

The co-founders of the BetterBriefs project, Matt Davies and Pieter-Paul von Weiler, say its aim is “to jumpstart more informed conversations about briefs. They should direct and inspire, not confuse and frustrate”.

Sourced from IPA, BetterBriefs

Why CTV advertising should be on media plans

Connected TV (CTV) advertising, which combines the sight, sound and motion of TV advertising with the targeting of digital, has to be seriously considered as part of brands’ media plans, according to the just-released WARC Guide to Connected TV.

Why it matters

Most TV viewers are now spending substantial amounts of time watching TV on a variety of streaming platforms. This means that marketers are increasingly unlikely to reach targets using just linear TV – brands that use CTV as well can take advantage of enhanced targeting and minimize waste.

Takeaways

• In the US, CTV spending is set to reach $21bn by the end of 2022, according to research from the IAB; that figure is just short of the amount of 2022 spending expected in other forms of online video (excluding social). 
• As viewership shifts toward CTV, some brands are pursuing a “video-on-demand first” strategy. 
• Ad inventory in CTV comes from a variety of sources, including streaming services and Smart TV companies.
• CTV advertising runs primarily on first-party data – streaming platforms inherently require a log-in, as does opting in to a Smart TV or device, as does having a cable or satellite subscription. Because of first-party data, CTV also sidesteps many privacy concerns.
• CTV’s internet connectivity makes it possible for advertising to be transactional; brands can take advantage of tactics such as using a QR code to exploit second-screening behavior. 

The big idea

Brands, agencies and media owners will need to become fluent in CTV as viewing habits shift and enhanced targeting in TV becomes easier to achieve. 

Read more in The WARC Guide to Connected TV

Reliance aims to become a house of brands 

India’s Reliance conglomerate is reported to be poised to move aggressively into the FMCG space, with plans to build a portfolio of up to 60 grocery, household and personal care brands within six months.

That’s according to Reuters, as reported in The Hindu, which cites a source saying “Reliance will become a house of brands. This is an inorganic play.”

What we know 

• Reliance already operates a network of grocery outlets and is expanding its JioMart e-commerce operations. 
• Reuters’ sources explain that a new business unit, Reliance Retail Consumer Brands, will house the various niche and regional consumer brands the company is currently negotiating to acquire or form joint ventures with. 
• An “army” of distributors is being recruited to take those brands to both kirana stores and modern retail outlets.
• Reliance is said to be targeting Rs 500bn ($6.5bn) of annual sales within five years.

Why it matters

If confirmed, Reliance would be throwing down the gauntlet to the multinationals that currently dominate this space. Its private-label products already compete for space with big-name brands in its supermarkets. 

Key quote

“If inorganic is the route for Reliance, they will be able to scale up much faster. But they’ll need to get the pricing and distribution right to compete with bigger rivals” – Alok Shah, consumer analyst at Ambit Capital.

Sourced from The Hindu BusinessLine

Mastercard’s three pillars of marketing effectiveness

Mastercard, the payments company, judges marketing effectiveness through the lenses of building and protecting its brand, driving business growth, and obtaining competitive advantage through differentiation.

Raja Rajamannar, Mastercard’s chief marketing and communications officer, discussed this subject in a LIONS Marketers Series event held by LIONS, which, like WARC, is owned by Ascential.

Why it matters

Effectiveness often lacks a shared definition, as marketers adopt their own criteria surrounding what this term means. It is, however, vital for brand teams to have a clear, shared perspective of this notion to guide their strategies and help track performance.

Mastercard’s effectiveness model

In aiming to “forget all the fluffy stuff” relating to effectiveness, Rajamannar explained that Mastercard has focused on three parameters:

• The first is “how do we build, nurture and protect the brand, because marketing folks are the brand stewards,” he said.
• “Second, how do you fuel the business? How do you become a real driver of the business or an enabler of the business, depending on the organization?”
• “The third is: How do you set up platforms that will differentiate and distinguish your company and your brand ahead of competition, so you're creating some kind of competitive advantage?”

The big idea

“If you look at these three [pillars], and anything that you're doing, and you're trying to measure the effectiveness of, against these three pillars, that's when you'll start making a lot of sense.” – Raja Rajamannar, chief marketing and communications officer, Mastercard.

Sourced from LIONS

Mediabrands taps automation to advantage

Mediabrands Australia has launched an automation program it claims is a first within the media agency sector and one it hopes will deliver it a competitive advantage in the coming months.

What’s it doing? 

Over the past 20 months Mediabrands has worked with partners UI Path and Cognizant to automate repetitive internal tasks in its media agencies, from inputting data to campaign tracking. 

Why it matters

The media industry hasn’t altered the way it works for 20 years or more, points out Mediabrands’ CEO Mark Coad, but the world has utterly changed in that time. He sees two primary benefits from automation: i) better media performance as staff are able to spend more time discussing strategy with media owners and clients; and ii) better staff retention as new recruits are relieved of the need to “spend two or three years doing some kind of administrative apprenticeship”. 

Takeaways

• Since launching, the network has automated almost 13,000 tasks and saved over 3,300 hours.
• Over the next 12 months the program is set to save more than 25,000 hours in total.

Key quote

“(This) transformation unburdens our people of the time-consuming and tedious tasks of day-to-day operations and frees them up to do intelligent, creative work that drives growth” – Mark Coad, CEO, IPG Mediabrands Australia, as reported by Campaign Asia.

Sourced from Campaign Asia, Australian Financial Review [Image: Getty]

WeWork and Greggs sketch emerging long-term work trends

Office life is back, but less than before, more flexible than before, and providing less of a lunch occasion than before even if people are getting snacks for their commutes – results from shared workspace provider WeWork and British bakery chain Greggs sketch the complicated reality of the return to ‘normality’.

Why it matters

Travelling to work five times a week versus just once, twice, or sometimes not at all constitutes a radical shift in people’s habits, not only as workers but as consumers of travel, inner-city lunches, and media.

In the UK, hot food sales reflect more travel and more out-of-home consumption, but inner-city consumption struggles to recover.

Globally, in-person office work appears to be normalising, according to the new-look, post-Adam-Neumann WeWork. But increased co-working doesn’t necessarily equate to a return to 2019 levels.

We’re Working! But it’s shifting to flex

Now publicly traded, the US-headquartered global co-working company WeWork announced revenue growth of 28% versus the same quarter last year, more than it had anticipated.

Speaking to investors last week CEO Sandeep Mathrani said memberships had grown 30% compared to the same quarter last year.

More interesting to marketers is the rates of physical occupancy the company is reporting:

• US and Canada: 64% occupancy
• International: 75% occupancy

London, interestingly, came in for a specific mention as a bellwether city as WeWork’s gross sales in the British capital equate to 39% of all London’s traditional office leasing (it manages around 1% of all the office space in London), as the market leads “the shift to flex” in WeWork’s telling.

You are what you eat

Greggs, the beloved UK bakery chain, is seeing strong growth in transport-hub based buying, even as city-centre locations lag the rest of the estate, according to the latest Greggs trading update.

Sales were up 27% in the first 19 weeks of the year versus the same period in 2021. As this point in 2021 saw just a partial easing of lockdowns, the firm notes that growth figures are likely to normalise in the coming months. It warns not only of cost increases weighing on the company but also on consumers’ wallets.

The company has continued to open new shops, as it refines its retail strategy.

In case you were curious as to the shifting tastes of the nation: “Sales of hot food and snacks are showing particularly strong growth, with chicken goujons and potato wedges proving popular.”

Sourced from Seeking Alpha, Greggs

Reimagining Gillette for the modern man

Gillette, the P&G-owned male grooming brand, was built on the clean-shaven look, but today more than half of men worldwide sport beards, including two-thirds of millennial men – it has had to rethink what it does and how it does it.

Why it matters

For many years, Gillette famously discouraged employees from having beards (and suppliers and agencies). Its initial assumption that the facially hirsute look was merely a passing fad, popular among hipsters but not among the male population at large, started to look awry when sportsmen it was paying to advertise its razors grew beards.

The company effectively made the mistake of believing its own marketing (“the best a man can be”) rather than understanding the shift that was taking place – and one that has been accelerated over the past two years by lockdowns.

A new focus 

For twenty years or more, the marketing of male grooming products seemed to revolve largely around the number of blades one could successfully fit on a razor, rising from two to five. But the products were expensive and post-2010 a new breed of business appeared, in the form of Dollar Shave Club and other new DTC brands, offering multiple-blade products more cheaply and conveniently via a subscription service. Gillette also ventured into this territory in 2015 but, as Bloomberg notes, failed to attract many sign-ups. 

It wasn’t until 2018, when Gary Coombe took over as chief executive officer of P&G’s grooming arm, that the strategy changed to embrace the beard and to develop suitable new grooming products – combs, waxes, oils. At the same time, a key insight that emerged from research was that men with facial hair still shave, leading to a razor engineered to target the neckline.

Leading from the top

Top (male) executives grew beards to try out the new King C. Gillette line of products themselves. “It turned out to be one of the most powerful communications of a new strategy that I’d ever done,” Coombe said. “You can stand up there with a PowerPoint slide and talk about it. But walk through the world shaving headquarters with a beard, and you’re the CEO? People notice.”

Reversing decline 

King C. Gillette helped P&G’s grooming division increase revenue by 6% in 2021, to $6.4bn and end almost a decade of annual declines.

Sourced from Bloomberg [Image: Getty]

China's community buying hits the buffers

Many community buying start-ups have gone bust in China while investors stand to lose billions as a result of COVID-19 restrictions and a regulatory crackdown on tech platforms, Bloomberg reports.

Background

Community buying originally grew out of farmers joining together to purchase supplies in volume. In recent years, however, it has become an urban phenomenon, as smartphones enabled city neighbourhoods to do the same with groceries via platforms like Pinduoduo, Meituan and JD.com.

Early in the pandemic, community-buying start-ups seemed to offer the answer to the needs of residents locked down in cities across the country, and significant investment followed. But of about 1,500 community-buying companies in business in September 2020, more than 80% had closed six months later as the big tech companies effectively bought their users. Big tech companies were subsequently fined for those promotional efforts which the regulator regarded as excessive giveaways and anticompetitive discounts.

What’s happening now

• COVID-19 lockdowns have disrupted logistics networks and hit platforms’ ability to meet demand. Last month, for example, Meituan stopped its community-buying operations in Beijing and closed hundreds of pickup points.
• Since January there have been significant staff reductions – between 10% and 20% – at the community-buying units of JD.com and Didi.
• Tuan zhang, neighbourhood representatives who gather orders and help distribute goods when they’re delivered, are quitting in large numbers as orders drop off and the commission they earn plummets.

An alternative take

Wang Shouren, founder of community-buying startup Youjing Youtian in Zhengzhou in Henan province, suggests that spending by big tech companies actually helped the category. “They are the ‘air force and rocket army’ using money as bombs to open the market while we follow up with more sophisticated operation,” he told Bloomberg.

Sourced from Bloomberg [Image: Qilai Shen/Bloomberg]

Peloton shifts marketing focus to lifetime value

Peloton, the exercise brand, is shifting its marketing focus towards scale and lifetime value, rather than customer acquisition costs (CAC), as it aims to bounce back from a period of disruption.

The background

Having seen purchases of its at-home equipment and digital services rise as the COVID-19 pandemic took hold, Peloton saw a drop off in demand as a result of price sensitivity, growing competition and a return to in-person fitness regimes.

In response, it announced plans to halt production of bikes and treadmills, and also appointed Brian McCarthy as its new CEO last month with the goal of turning its fortunes around.

A shift in marketing strategy

As part of his recovery plan, McCarthy wrote to investors, Peloton will be rethinking “the framework we’re using to manage our marketing spending”. More specifically:

• In the past, it “effectively pegged the amount we were spending” on customer acquisition to the gross profits generated by its hardware.
• Now, however, the brand wants to “play for scale”, meaning that its thinking about marketing will necessarily evolve.
• “We’re changing our focus to customer lifetime value (LTV), which is the net present value of the gross profit per subscriber over the expected life of the subscriber,” wrote McCarthy.
• Under this model, the company admits it will “initially lose money on new subscribers due to the cost of attracting their business, as is the case for many digital platforms.
• However, “each new subscriber increases our enterprise value” provided their lifetime value exceeds this customer acquisition cost, noted McCarthy.

Wider considerations

• As Peloton adapts its strategy, it will need to “explore the dynamic relationship” between customer acquisition costs, churn and gross margins, according to McCarthy.
• The ultimate goal is to achieve faster growth by investing in a “better user experience” in pursuit of outcomes including higher organic growth and lifetime value.

Sourced from Peloton

A guide to IKEA’s impulse buying hacks

Homeware titan IKEA deploys a shopping experience like no other, one in which around 60% of purchases are impulsive – a new analysis uncovers what makes IKEA so good at getting shoppers to add to their baskets.

Why it matters

Singular, consistent, and eventful, the IKEA experience – from the outside of the store, to showroom, to marketplace, to café, to checkout, to a hotdog for the road – works by following some of marketing’s most essential rules and breaking others, as a great new piece in The Hustle explains.

The numbers

An analysis by researchers at University College London pegs the amount of impulse purchases in IKEA at 60%. While internally, the company believes that up to 80% of purchases defy logic.

What it does

• Its in-store maze design is a “submissive experience”, one researcher tells The Hustle, in which shoppers are taken through the entire product catalogue.
• Rooms as they would be. IKEA shows many items in a context of an actual room to trigger availability bias (if you can imagine using a product the more likely you are to buy it), often with a lot of mirrors so that you see yourself (and often partner/family) in them. This can sometimes be so powerful as to induce tension in some couples.
• Pricing is what brings people to IKEA, but once there it uses techniques like decoy prices to encourage buyers to choose more profitable options.
• Food courts are essential: one study of 700 shoppers found that IKEA shoppers that ate in the in-store restaurant spent close to double what non-eaters spent.

Sourced from The Hustle, VICE

Unilever: India remains a bright spot amid global gloom

In a visit to India, Unilever chief executive Alan Jope told reporters that he could imagine the company’s India business to grow larger than the US within a decade, based on current trajectories – but in an inflationary environment, consumer behaviour is adapting.

Why it matters

Speaking to the Economic Times, Jope was commenting on the fast-moving consumer goods (FMCG) giant’s Indian operation, which accounts for 11% of global revenues (the US accounts for 19%), which also acts as a proxy for Indian consumer sentiment. HUL’s (Hindustan Unilever) performance is not only a portrait of the company’s future but of the Indian market as a whole.

By the numbers

• Amid an inflation squeeze, Unilever’s commercial fortunes are reflected in India.
• Volume sales in India were flat over the quarter ending March.
• Price increases, however, contributed to a 10% growth in sales.

Why

Jope tells the ET that a handful of trends are driving this:

• Buyers are downsizing.
• Buyers are “eeking out” products they already have.
• In certain categories, shoppers are trading up, having noticed that price per ml is actually cheaper. “A very smart way of behaving”.

What to read from this

Price rises can only go so far when shoppers are so attuned to exactly how much bang they’re getting for their buck. Marketers will have to work hard to justify why branded items remain superior to private-label or discount items.

Marketers and agencies should also consider new thinking around the different kinds of savings offers brands can make to increasingly frugal customers.

Sourced from Economic Times

YouTube v TikTok: What Gen Z prefers

Young Britons are three times more likely to be using YouTube than TikTok, but they engage more with ads on the latter, a new study finds. 

The Social Effect, from video tech business Channel Factory, shows YouTube is the most-used platform across all age groups, with 88% of respondents using it since 2020 – that figure rises to 93% in Gen Z adults (aged 18-29) – followed by Meta (73%), TikTok (54%) and Snapchat (51%). 

Why it matters

Different platforms deliver different results for different age groups. Understanding these nuances can help marketers better focus their advertising efforts depending on what they want to achieve. 

Key findings

• Ads that are aligned with social content have a 17% higher return on investment.
• Millennials and Gen X tend to share a brand video ad when they think its content is relevant to their friends or family members (64% and 57% respectively)
• Gen Z users are more inclined to share ads that they find ‘funny’ (59%) or ‘creative and cool’ (57%).
• When it comes to online shopping, Gen Z mainly engage with Meta Image Ad (40%), TikTok video ad (40%) and YouTube video ad (32%).

Key quote 

“It seems that adverts are not only influencing the next generation’s purchasing decisions but also providing a meaningful way for them to interact with their peers, express themselves and shape their identity” – Rob Blake, UK managing director at Channel Factory.

Sourced from Channel Factory [Image: Christian Wiediger on Unsplash]

How India’s children consume content

A third of India’s kids use both linear TV and OTT channels for their entertainment, but a majority (57%) prefer TV, according to a new report, with just 10% choosing only streaming options. 

Searchlight 2022, from children’s entertainment channel Sony YAY! and based on a survey of 982 kids and 316 parents across eight cities, also finds that younger kids prefer TV, while older kids lean towards over-the-top (OTT) platforms. 

Why it matters

India is a fast-changing market and ongoing shifts to digital have been accelerated by the COVID-19 pandemic. But the picture is nuanced: last month, Leena Lele Dutta, EVP and business head of Sony Yay!, told e4m that while children’s “digital consumption has increased significantly … it is not eroding the TV viewership”. Overall TV reach for the kids category is down on five years ago but time spent is up 30%, she reported. 

Key findings 

• Eighty-one percent of children in southern India prefer OTT, compared to just 56% in eastern India.
• Preferred OTT content is cartoons and anime (81%), but music (47%), educational/informational shows (42%), movies (38%) and standup comedy shows (31%) are also popular.
• Half of the children surveyed enjoy gaming on their phone, with free games being core to their consumption; 53% prefer to play solo while 44% like multiplayer games with friends.
• Two thirds (63%) would like to continue with online lessons rather than go back to classrooms.

Sourced from Afaqs!, e4m [Image: Getty]

How to read FIFA and EA Sports' split

It’s likely one of Electronic Arts or FIFA has made a historic blunder, following the news that the video game publisher and football’s global governing body have parted ways – the question is whether owning the player relationship or the brand name is the key.

Why it matters

It’s hard to express to non-players the fundamental position that the video game under discussion occupies in modern football. Kids play it, adults play it, professional footballers play it, people who don’t even particularly like football play it.

FIFA believes it can take the brand name elsewhere and find success; EA believes it can maintain player relationships and deliver to them the teams, leagues, stadiums, and players that it says they truly love.

It’s the largest commercial deal for the body and the largest and most popular game for the publisher. One has overplayed their hand, but the question is who.

The story so far

The New York Times, which broke the story, led with the length of the relationship: three decades. For many FIFA players, even its ageing millennial audience, FIFA means the game before the organisation – as it has done all of their lives.

But this is a story brewing since around October of last year when Electronic Arts, the sixth largest game developer by revenue, copyrighted the slightly dull EA Sports FC.

What appeared to be a hardball tactic in negotiations with FIFA has now turned into the brand name, after the sport’s governing body stood firm on its reported demand for at least $300 million per annum – at least double what EA pays now. In doing so, FIFA has lost its largest commercial partner.

But it’s also a huge gamble for the publisher, with David Jackson, VP EA Sports telling the BBC: “Interactive football experiences have been central to what has made EA Sports successful over the last 30 years”, and a key link to more than 150m players globally. “It’s a big moment for the organisation.”

What FIFA gains

Simply, the ability to put the FIFA name to other gaming titles, some of which are expected to come out this year. After FIFA 23, the last by EA Sports, president Gianni Infantino has indicated that he envisages eventual competition between a future game and its former partner.

“I can assure you that the only authentic, real game that has the FIFA name will be the best one available for gamers and football fans”, he said in a statement. “The interactive gaming and esports sector is on a path of unrivalled growth and diversification. FIFA’s strategy is to ensure we can make the most of all future options and ensure a wide range of products and opportunities”.

In an earnings call earlier this week, EA CEO Andrew Wilson told analysts that aside from the financial motivations, FIFA wanted to push the game further “to move beyond just the core experience and really build out this digital football experience.” But his bet is that the fundamentals of teams, leagues, and players will be the key – EA will retain many of those.

What Electronic Arts gains

While it won’t be called FIFA, the modern nature of licensing under smaller deals means that the in-game experience won’t be too different. Jackson tells the BBC that players will only notice two changes: “The name and a World Cup piece of content every four years.”

For its statement, EA boasted its licensing portfolio of more than 19,000+ players, 700+ teams, 100+ stadiums and 30 leagues. They include Europe’s largest and most popular top flights: the English Premier League, Spain’s La Liga, Germany’s Bundesliga, Italy’s Serie A, as well as the north American MLS.

Importantly, it also counts powerhouse sports brand Nike under its continuing licences, with the firm noting the importance of the game to helping its fans and community engage with both the game of football and its culture.

What it all means

This is all going to need a lot of marketing activity – though analyst questions of how much that meant exactly were deftly deflected by the CEO.

But it comes at a time when user goodwill is now critical, with FIFA (the game’s) profitability boosted by in-game purchase features said to be worth up to $1.2 billion to EA, per the NYT. 

However, the company will be mindful of an increasingly vocal fan base with criticism of in-game purchases a common controversy in the gaming world. In 2017, for instance, EA had to suspend in-game purchases in its Star Wars Battlefront II game following fan criticism.

Similarly, the newly branded game will need to find ways of monetising a game that asks players to shell out increasing amounts for a new version each year. 

The game does, however, know its way around advertising. With a high-reach pitch for awareness ahead of 2023’s launch of the first EA Sports FC, it could nail name-change best practice and pull off the transfer of current fans to the new game.

For FIFA the governing body, it will be a time to find out whether it truly owns the name or whether the shared cultural meaning of its brand name has actually passed over to the video game, opening up a space in which the organisation’s controversies will no longer have a more positive association to hide behind. Only time will tell.

Sourced from New York Times, FIFA, EA, WARC, BBC, Motley Fool

What AB InBev wants from its marketers

Anheuser-Busch InBev, the brewer, wants its marketing teams to be human-centric, growth-orientated and to reflect the diverse communities served by the company’s brands.

Marcel Marcondes, AB InBev's global chief marketing officer, discussed this subject in a LIONS Marketers Series event held by LIONS, which, like WARC, is owned by Ascential.

Why it matters

Marketers are facing a complex environment, from rapidly-developing new technologies to disruption in consumer spending as a result of inflation and the vicissitudes of the on-going COVID-19 pandemic. Guiding principles can help brand teams focus on what really matters.

Takeaways

For Marcondes, there are three “big dimensions” that should be vital considerations for marketing practitioners:

• Human-centric: “I think it's so easy, in our teams, for us to talk to ourselves, and to start everything we do by [thinking about]: What do we need as a company?” he said. “And we need to change the focus from us to consumers, and then they should be the starting point for everything. So we need people that are human-centric.”
• Diversity: “For me, our success is directly connected to the ability that we have, inside our offices, to have the same representation as we have in real life with our consumers. And this is how we establish rapport with them.”
• Growth-orientated: “The big risk of marketing over time is to be seen as an expense,” he continued. “But marketing, now, more than ever, is in the best position ever to be seen as the most important area in terms of growth creation.”

The big idea

“To connect that humanity with growth creation, and then via creativity, data analytics and all those skills is what really needs to be done in the marketing of the future.” – Marcel Marcondes, global chief marketing officer, AB InBev.

Sourced from LIONS

Customer content rivals brand marketing

The widespread availability of online customer reviews and the sharing of brand experiences on social media mean a high-quality product and an excellent shopping experience are no longer sufficient qualities to persuade shoppers to part with their money. 

That’s according to the Shopper Experience Index, an annual report from UGC solutions provider Bazaarvoice, based on a survey of more than 7,000 global shoppers.

Why it matters

Customer reviews and user-generated content (UGC) in the form of photos and videos are now vital as social proof for buyers. Shoppers are becoming brands’ best salespeople.

Takeaways 

• Reviews are essential for conversion. Globally, 86% of shoppers read shopper reviews when browsing or buying, 75% look at photos and videos from other shoppers.
• Peer content adds credibility. Three quarters (74%) of global shoppers agree that shopper photos increase their likelihood of buying a product, while more than half (53%) say peer content makes them more confident in their purchase decision. 
• Social commerce is on the rise. Over half (52%) of shoppers have bought something on social media. The convenience and ease of social commerce, thanks to the boom in shoppable content from platforms such as Instagram and TikTok, is making it a go to. 

Key quote

“Brands need to rethink their paid media and content strategies and capitalize on influential peer-to-peer conversations to inform, inspire, and convert. Unfiltered user-generated content elevates authenticity, which in turn drives trust” – Zarina Lam Stanford, CMO at Bazaarvoice. 

Sourced from Bazaarvoice [Image: Getty]

Luxury in India defies inflation

A combination of impatience and digitalisation is helping spur India’s luxury goods market back towards pre-pandemic levels, anecdotal evidence suggests.

Why it matters

The inflation concerns that affect the mass market aren’t evident in the luxury sector, where sales of watches, jewellery and fashion are all recovering, helped by new e-commerce options. Sales of used cars are also surging at the top end of the market as buyers prefer to have something now rather than wait for months for a new model because of the global chip shortage that has affected production.

Tales from the market

• Luxury car manufacturer Lamborghini reported a record year in 2021 in India, while Lexus expects to reach its 2019 sales figures this fiscal year. 

• By the end of 2021, sales at watch brand Ulysse Nardin exceeded those of 2019, while demand this year is outstripping production, Mint reports. 
• Fashion retailer The Collective is almost back to its 2019 figures and is confident enough to be introducing new brands into its luxury portfolio. 

Key quote

“There is increased access to luxury products due to the rise in digitalisation. Several e-commerce platforms … offer access to even tier II/III cities to shop for luxury goods which wasn’t the case earlier as all luxury brands were only present in tier I cities in upscale shopping malls” – Anul Sareen, a research consultant at Euromonitor International.

Sourced from Mint [Image: Getty]

Li Ning eyes China’s coffee market

Sportswear brand Li Ning is planning to sell its own ‘Ning Coffee’ from its near-6,000 stores across China, according to media reports.

Why it matters

Those store numbers would put Ning Coffee on the same level as leading coffee chains like Starbucks and Luckin Coffee. But it’s unlikely to be competing on the same basis – it told the South China Morning Post it would be providing unspecified “coffee services” as it focused on “the consumer experience on the retail end”. Expect some innovation here. 

Background

• Li Ning’s application to register the ‘Ning Coffee’ trademark is currently being reviewed.
• Starbucks last week reported a 23% drop in comparable sales in China as the effects of COVID-19 restrictions hit its fiscal Q2 results (but CEO Howard Schultz still expects the China business will eventually be bigger than the US).
• Luckin Coffee, which only recently emerged from a bankruptcy order, has denied a suggestion it is planning an IPO in Hong Kong.

Key quote

“Li Ning … can use its existing network to offer an addition of a lifestyle experience for its consumers. This is a very different strategy versus starting a coffee chain” – Jason Yu, general manager of Kantar Worldpanel Greater China.

Sourced from South China Morning Post, Reuters, Caixin Global [Image: Getty]