Driving brand relevance is a key indicator of profitability in a post Covid world

When a company faces financial distress, and possible liquidation, the brand of that company takes a significant blow and can sometimes become synonymous with a defective or inferior product. Think about the heavy blow that was dealt to Comair when the Civil Aviation Authority of South Africa grounded its flights in March sighting technical concerns. Driving brand relevance is important.

Moving away from Comair, a report by PricewaterhouseCoopers (PwC) points out that many companies in the retail industry are facing significant challenges adjusting to a disruptive market that has been driven by Covid. The world is planning a significant Covid recovery and consumer goods leaders spoke to PwC pointing out what their future should look like. Driving brand relevance was a key feature in this discussion.

Driving brand relevance step by step

What brands stand for is increasingly important to consumers and other stakeholders, especially as we all emerge from a transformative global crisis. People are seeking purpose-driven brands that mirror their values and beliefs, and they want brands—and the companies and CEOs behind them—to do more to solve a wide range of societal problems.

In an industry survey, PwC asked respondents (consumers) to indicate to what extent they agreed or disagreed with specific statements regarding shopping sustainably. Fifty-five percent of survey respondents said that they choose products with a traceable and transparent origin. Fifty-four percent of respondents said that they make purchases from companies that are conscious and supportive of protecting the environment. Fifty-four percent of respondents to the PwC survey said that they intentionally buy items with eco-friendly packaging or less packaging. Fifty-three percent of survey respondents pointed out that they are buying more biodegradable/ eco-friendly products. And 52% of survey respondents pointed out that, when shopping for products, they check the packaging for sustainability certification(s).

This attitude has only intensified in recent years. In fact, consumers rank trust in a brand second-most important (after price) when making purchasing decisions, according to the annual Edelman Trust Barometer. PwC research in the US finds that 70% of respondents see trust as the most important factor when buying a brand. And the CGF’s Honest Generation report from 2019 notes that in the US and UK, 66% of Millennials think brands are never honest or are not honest enough about environmental issues, a number that leaps to 79% for Generation Z (Gen Z). And we are all well aware of how Gen Z is obsessed about driving brand relevance.

Global retail and consumer goods CEOs understand well that brand trust is a precious asset that must be carefully nurtured to create long-term value. Salman Amin, CEO of British food company Pladis, refers to this process as building “a bank of trust.” Success depends on a litany of factors, including product quality, company purpose, dependability and integrity. When the pandemic hit and UK residents were stuck at home under lockdown, they took comfort in Pladis’s McVitie’s biscuits, a treat that had been around for more than 100 years and whose brand the company had long invested in and cultivated. Sales shot up 25%. “Brands that have built trust…have built that by delivering exactly what they’ve promised over many years,” says Amin. His assertion is supported by PwC’s June 2021 consumer survey, which shows that almost half of consumers (46%) say they will stay loyal to a brand if it is reliable. This is why driving brand relevance is important

But newer brands, such as Procter & Gamble’s Native deodorant, have also built trust and resonance with consumers in a short time, by offering innovative products that speak clearly to customers’ values and concerns. The brand has a “no compromises” pledge that assures consumers that its products are free of potentially harmful chemicals and not tested on animals, among other promises about health, safety and social effects. The company has also built into its strategy a commitment to eliminating unconscious bias and has, to that effect, produced a series of videos, The Look, The Talk and The Choice. This is an innovative way to drive brand relevance.

Going forward, companies will have to make building trust with consumers even more of a priority, knowing that the elusive trust factor can provide a halo effect of goodwill, yet can also have devastating business effects if breached.

Challenges and opportunities ahead

There are many challenges that companies have to navigate when it comes to driving brand relevance in a market that is facing significant disruption.

Below are some of the more pertinent of these challenges:

• Making the brand promise tangible. Brands today must do more than simply articulate what they stand for. They must back it up with sincere actions that resonate with stakeholders. “The pandemic has resulted in a shift of expectations for businesses and their leaders. Increasingly, as consumers, we want to feel connected to the purpose behind the brands we consume. For businesses, this means that in a rapidly transforming economy, words are not enough. Now more than ever, we must follow through with actions,” says Bejjani of Majid Al Futtaim.

• Converting trust into brand equity. Although trust may be an intangible quality, it can translate into tangible business results. The more that consumers trust brands, the more willing they will be to engage with them and share personal information, creating a virtuous circle that benefits both parties. Brands that can deliver on consumer demands for greater relevance, care and personalisation can realise benefits that ultimately go to the bottom line. Two pathways to converting trust into brand equity are social influencers who can credibly vouch for a product and frontline employees.

• Leveraging frontline employees as ambassadors. The pandemic shone a spotlight on the importance of looking after not just consumers but also employees. The business leaders we interviewed for this report felt a responsibility for ensuring that employees knew they were cared for and recognised for the sacrifices they made to maintain business as usual. In addition, in its work with retailers, PwC has found a strong correlation between a retailer’s emphasis on employee experience and store profitability.

Will addressing these challenges help companies when it comes to driving brand relevance?

Ajinomoto is one company that has used feedback from its employees to shape its values and inform how it represents its brand to customers. A recent engagement survey the company conducted found that most of its employees wanted the company to contribute to sustainable causes. “We have set a ground vision of contributing to the better health of 1bn people in the world through our nutritious food,” says Nishii. “To that end, we’ve just started to educate our employees on nutrition science. From fiscal year 2021, we are going to expand that education programme to all employees, worldwide. I have a high expectation of this programme because it will help to bring up the level of motivation among our employees around the world.”

What is clear from the content of the PwC survey is that brand relevance is key to remaining profitable in a world that is facing significant disruption. This means that there is significant scope for turnaround professionals to play a key role when it comes to driving brand relevance.