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epsilon.com/CORE
The Give and Take
With Walled Gardens
CORE
Balancing platform limitations, the customer
experience and pe...
InTheMarket
Epsilon
31
Volume1,Issue1Epsilon-Conversant
ByJenniferGoforthGregory
IllustrationsbyErikCarter
THE
ULTIMATE
DI...
33
COREIssueOne
32
Epsilonepsilon.com
33
Asthevirusswepttheglobe,brandschangedhowtheyinter-
actedwithcustomersduetosociald...
34
Epsilonepsilon.com
35
COREIssueOne
•Nostalgia:Changegivesrisetoanxiety,andanxietytriggers
consumers’nostalgiaforhappier...
Core Issue 1 - The COVID-19 pandemic led to a seismic shift in consumer behavior
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Core Issue 1 - The COVID-19 pandemic led to a seismic shift in consumer behavior

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As the virus swept the globe, brands changed how they inter- acted with customers due to social distancing and stay-at- home orders. Consumer perspectives about making purchases also shifted with fluctuations in the stock market, skyrocket- ing unemployment and supply chain issues. As many people lost their jobs and those still earning a paycheck worried about future layoffs, impulse purchasing became infrequent. Messages that resonated with consumers a few weeks prior suddenly fell flat and even seemed insensitive.

“You need to re-create the customer journey for these times, and then prior- itize investments based on what you learn,” says Brian Solis, global innovation evangelist at Salesforce and author of X: The Experience When Business Meets Design.

Marketers need to take a fresh look at what people are searching for, where they’re going, what they value and what they’re finding, Solis says.

www.briansolis.com

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Core Issue 1 - The COVID-19 pandemic led to a seismic shift in consumer behavior

  1. 1. epsilon.com/CORE The Give and Take With Walled Gardens CORE Balancing platform limitations, the customer experience and performance transparency CHALLENGE YOUR MARKETING BELIEFS ISSUE ONE 2020 Lessons From the DTC Revolution Email’s Growth Potential COVID’s Lasting Effects on Marketing
  2. 2. InTheMarket Epsilon 31 Volume1,Issue1Epsilon-Conversant ByJenniferGoforthGregory IllustrationsbyErikCarter THE ULTIMATE DISRUPTION HowtheCOVID-19pandemicforced changesinconsumerbehavior—andinturn, marketers’abilitytoconnect—forgood.
  3. 3. 33 COREIssueOne 32 Epsilonepsilon.com 33 Asthevirusswepttheglobe,brandschangedhowtheyinter- actedwithcustomersduetosocialdistancingandstay-at- homeorders.Consumerperspectivesaboutmakingpurchases alsoshiftedwithfluctuationsinthestockmarket,skyrocket- ingunemploymentandsupplychainissues.Asmanypeople losttheirjobsandthosestillearningapaycheckworried aboutfuturelayoffs,impulsepurchasingbecameinfrequent. Messagesthatresonatedwithconsumersafewweeksprior suddenlyfellflatandevenseemedinsensitive. “SomebrandswanttousecampaignsthattheyshotinQ1, thinkingiftheywait,theycanplayit,”saysAkiSpicer,chief strategyofficeratLeoBurnett.“Butyouaren’tgoingtowant toreleaseacommercialforyourvodkabrandwithpeopleata raveanytimesoon.Everythinghaschangedintheworld,and marketingneedstoreflectthebrand’svalues,whichhopefully arerightforourcurrenttimes.” COVID-19affectednearlyeveryaspectofmarketing becausecrisesofthisscalechallengethecoreofbusiness basics,saysTimothyCalkins,clinicalprofessorofmarketing atNorthwesternUniversity’sKelloggSchoolofManagement. Somecompanieswereleftunabletodoanysortofcommerce, whileothersstruggledwithtoomuchdemand.“It’saveryrare companythatcanusethebusinessmodelandmarketingthat theyusedpre-pandemic,”Calkinssays. Intheearlyweeksofthepandemicresponse,manybrands pivotedmessagingandoffersasquicklyaspossible.Hotels.com shiftedadswithitsmascot,CaptainObvious,frompartying Adapttonewvirtualbehaviors Asstay-at-homeandsocialdistancingorderstookholdin thespring,customersreliedevenmoreheavilyondigitaland mobileplatformsastheirsmartphonesbecamealifelinetothe outsideworld.Newvirtualbehaviorsemergedandexpanded asconsumerscompletedtheirdailytasksdigitally,suchas curbsidepickup,telehealthappointments,onlineworkouts andcontact-freedelivery.Andasmanypeopleworkedfrom home,wenttoschoolonline,andconnectedwithfamilyand friendsvirtually,videochatuseexploded.Thevideochatplat- formZoomsawastaggering418%growthinadoptionratein twojustmonths. Inresponsetothesenewbehaviors,brandsproactivelyshowed customershowtheyfitintonewroutinesandexpectations.Pizza Hutrolledouttamper-proofseals,makingitapparentifanyone hasopenedapizzaboxbeforeitgetstotheintendeddestination. BeautybrandMACcreatedatooltoletcustomersvirtuallytryon lipstickandeyeshadowsincetheycouldnolongersamplecolors atamakeupcounterorMACstore. Evenasphysicalbusinessesopenup,theinfluenceofsocial distancingislikelytostaywithconsumerslongerterm.Many ofthesenewbehaviorsmayturnintolong-termhabitsinstead ofshort-termsolutionsexecutedincrisismode.“Youneedto re-createthecustomerjourneyforthesetimes,andthenprior- itizeinvestmentsbasedonwhatyoulearn,”saysBrianSolis, globalinnovationevangelistatSalesforceandauthorofX:The ExperienceWhenBusinessMeetsDesign. Marketersneedtotakeafreshlookatwhatpeopleare searchingfor,wherethey’regoing,whattheyvalueandwhat they’refinding,Solissays.Inmid-May,forexample,“golfpush carts”becameatop-growingqueryonGoogleassomestates reopenedgolfcoursesbutrestricteduseofgas-poweredcarts. Atthetime,Dick’sSportingGoodsrankedNo1.inGoogle searchresultswiththetitletag,“GolfPushCartsforSale| CurbsidePickupAvailableatDick’s.” Identifynewcustomerperspectives Consumerprioritiesarechangingasaresultofthepandemic. Thewaypeopleinteractwithbrands—andhowtheyview themselvesasconsumers—isfundamentallydifferentthan itwaspre-quarantine.Spicerhasseenthreemajorshiftsin consumerism: •Home:Peoplearespendingmoretimeintheirhomes, whichhasbothpracticalandemotionaleffects.Aconver- sationSpicerhadwithSamsungcenteredonhowpeople arerethinkingtherolethatproductssuchashomeappli- ancesnowplay.Notonlydoappliancesneedtowork,but peoplehaveotherconsiderationsaswell,suchas:Ismy washingmachinequietenoughtohaveaZoomcallinthe nextroom?Doesthevacuumcleandeepenoughtoremove germs?Whereareappliancematerialssourcedfrom? 3BrandsThatGot ItRightEarlyOn Adidas Notonlydoesitshashtag#HomeTeam perfectlyalignwiththebrand,it’sa fittingshoutouttoourhomebound times.Adidas’Q1pandemicsocialmedia campaignshowedsportscelebritiesat home—almostallincasualclothesand settings,justlikeus!Thebrandreinforced theimportanteducationalmessage ofstayinghomewhilealsohelpingits customersconnectwiththeirheroesand feellessalonewhilequarantining. GuitarCenter Byquicklyaddingonlinelessonstoits productofferings,GuitarCentertook advantageofthenationalmindsetof settinggoalsforself-improvement projectsduringstay-at-homeorders. Throughsocialmediaandemail, theretailerstayedincontactwhile encouragingpeopletomakemusicat home.Andforthosenotquiteyetready tolearnnewchords,GuitarCentershared musicalvideosofpopular,professional guitarplayersforinspiration. OrientalTrading Intheearlydaysofshelteringathome, orientaltrading.comofferedfrazzled consumersanswers:howtokeepkids busy(artkits),celebrategraduateswhile socialdistancing(yardsigns)andhome- school(scienceprojectmaterials).The brandgetsbonuspointsforpickingupon thetrendofdrive-bycelebrationparades byshowcasingcar-decoratingkitsfor birthdaysandgraduations,aswellas waysforkidstothankfrontlineworkers, onitsFacebookpageheader. “Everything has changed inthe world,and marketing needsto reflectthe brand’s values, which hopefully areright forour current times.” —AkiSpicer,chiefstrategy officeratLeoBurnett withfriendstoeatingpopcornalonewithabottleofhand sanitizer.PaneralaunchedPaneraGrocery,enablingcustom- erstobuyhigh-demandgroceryitemsitalreadystocksinits restaurants—suchasbread,produceandmilk—alongwith soupsandsandwiches.Inanefforttohelpparentswithkidsat homefulltime,TimeforKidsmagazinegaveanyoneaccessto its2020digitaleditionsforfree,andAmazonPrimeprovided kidswithfreevideocontent. Whilemanybrandsmadeshort-termchangesduringthe initialcrisis,companiesmustnowlooklongertermandbuild thefoundationtostayconnectedwithcustomers.According toanarticleintheJournalofAdvertisingResearch,brandsthat reducedadvertisingspendduringrecessionsdecreasedsales revenueoncetheeconomypickedup.Ifhistoryshowsthat brandsthatcontinuetomarketduringdowntimeswilllikely comeoutahead,whataretherulesofengaginginaworld wherethe“nextnormal”isstilltobedefined? Yes,it’sadifferentworld,but“thesearenotunprecedented times,”SimonSinek,authorofStartWithWhyandTheInfinite Game,saidinacompanyvideoonYouTube.“Theinventionof theinternetputmany,manycompaniesoutofbusiness—the oneswhocouldnotreinventtheircompaniesfortheinternet agebutratherdoubleddownontheoldwaytheydidbusiness,” heexplained. Theopportunityistoshiftfromsurvivalmodetoreinven- tionmode,tofocusonwhatwillbeinsteadoftryingtopreserve whatwehad. TheCOVID-19 pandemicledto aseismicshiftin consumerbehavior. seismicshift
  4. 4. 34 Epsilonepsilon.com 35 COREIssueOne •Nostalgia:Changegivesrisetoanxiety,andanxietytriggers consumers’nostalgiaforhappiertimes.“We’relookingfora bitofnostalgiaintheshowsandcontentwe’reconsuming, downtothekindsoffoodwe’rebringingintoourhomes,” Spicersays.“Thatcomfortandnostalgiabecomeanew essential.”Withashifttomoreshelf-stableproducts,people arerevisitingbrandsthathaven’tbeenintheirpantriesor freezersforquitesometime.Spicersaysthatifthosebrands focusondemonstratingtheirvalues,they’remorelikelyto stickaroundinthosehomeslongterm. •Self-reliance:Thetypicalconsumeristakingonmore responsibilityfortaskstheywouldnormallyhiresome- onetodoforthemoroutsource.Peoplearebeingmore creativewithmeals,astripstothegrocerystoreand restaurantsbecamerisky.Manymenarecuttingtheir hairathome.Willpeoplecontinuetopayforthese services(diningatrestaurants,gettingtheirhaircutat abarbershop)afterdiscoveringtheycansuccessfullydo itthemselves?Asconsumersrealizeeverythingtheycan accomplishthemselves,brandswillbepushedtoactively showwhytheirproductorserviceisvaluable—andulti- matelywhyit’sworthpayingfor. Theconsumerpointofviewshiftsconstantly,butin pre-COVIDtimes,brandscouldnormallypivotonsmaller scalestomakeadifference—likeofferinggluten-freeoptions ormakingcontentavailableonstreamingplatforms.Coming outofthepandemic,peoplearethinkingabouttheirroleas consumersdifferently,whichwillforcebrandstomakelarger fundamentalchangestoanticipatenewconsumerneeds. Startfromscratch Brandsnowhaveanopportunitytoreviseandrebuildtheir relationshipswithconsumers. Physically,peoplearenowondevicesandnetworksthat weren’tpreviouslycommingled—suchasworkcomputers onhomeIPaddresses.Additionally,moreindividualsinthe houseareonthoseWi-Finetworksacrossdevices,making uniqueidentificationcomplicated.Moreexistentially,people arecravingrelationshipsandconnection.They’relikelynot expectingbrandstofillthatneed,butanybrandthatdoeswill berewardedforitsefforts. “COVID-19isgoingtoaffecttheplatformsyouuse,the contentyoucreate,theoffersyoudesignandcampaignsto supportthoseoffers,”Solissays.“Essentially,youhavethe opportunitytostartfromscratchandbuildthosetouch- points,hopefullyinvestingheavilyinartificialintelligence andmachinelearningacrossthejourney.” Butthestakesarealsomuchhigher:Thegapbetweenhit andmisshasgottenwiderinthistimeofincreasedsensitivity andanxiety. Rothy’s,adirect-to-consumerbrandthatsellssustainably madeshoes,announceditwoulddonatefivedisposablemasksto frontlineworkerswitheverypurchaseinAprilandimmedi- atelyreceivedbacklashfromcustomerswhoviewedthepolicy asaself-servingploytodrivesales.Rothy’squicklyresponded witha“we’relistening”messagethatannouncedtheendof thepurchase-to-donateprogramandacommitmenttosimply donate100,000masks. “Ifempathywasonceamarketingstrategyformessaging, it’snowamandateforbrands,”accordingtoSpicer.However, empathycan’tcomeacrossasfeigned.Mostinboxesarestuffed withfaux-caringemailsfromeverybrandconsumershaveever orderedfrom,offeringtheircondolencesbeforetheytalkup theirexcitingnewpromotion. Manybrandsturnedtogamificationasawayofproviding somethingfunandvaluabletoconsumers.Diordevelopeda cardgameforpeopletoprintoutandplaywhileinisolation; Chick-fil-Agotkidsinvolvedbyprovidingmusicandlyrics tothesong“Rockin’Robin”andsharingrenditionsonsocial media;andCanva,agraphicdesignplatform,offeredafree (andpersonalized)versionofbingo. What’sheretostay BecauseCOVID-19affectsconsumersdifferentlyacrossstates andgeographicareas,brandmarketersshouldcarefullythink throughhowarangeofconsumerswillreact.Howwillyour campaignplayinbigcitieslikeAtlantaorNewYorkandin smallertownsinruralareas?Andhowdoyoushiftthemessag- ingbasedonlocation? Concernoverhealthandsafety,especiallypersonal contactandlargegroups,willlikelyremainwithusfor monthsandpossiblyyears.Whilesomepre-COVID-19 behaviorswillreturnatsomepoint,manyofthechanges thatoccurredduringthepandemicarelikelytobecome permanent,especiallynewhabitslikevideochatswith family,telehealthvisitswithdoctorsandvirtualworkouts athome. Movingforward,Solisadvisesmarketerstolookatthejour- ney—notjusttheindividualtouchpointstheyrepresentfora completeoverviewofthecustomer’sexperienceandwhereto addvalue.“Thisisanopportunitytobeopen-minded,think differentlyandallowyourselftonotknowalloftheanswers,” hesays.“Duringthesetimes,organizationsneedtomostofall findmoreopportunitiestobemorehuman.” Brandsshouldlooktobuildtheirinfrastructureand futureproductstosupportthislikelypermanentshiftto usingvirtualplatformsandoptionswhenpossible.Even withoutmandatorysocialdistancingguidelines,many consumerswillcontinuetofavoronlineactivitiesdueto theconveniencefactor. Thecornerstoneofmarketinghasalwaysbeencreating connectionswithcustomers.Thepandemiccreatedanew worldwhererelationshipswithbothpeopleandbrands becamemoreimportantthanever.Bycloselymonitoring ever-shiftingcustomersentimentandpriorities,andleverag- ingtoolstorampuppersonalization,businessescanleavethe crisiswithnewlong-termcustomers. “Whateveryousoldbeforehasanewcontext,”Spicersays. “Whatdoesyourbourbonlooklikewhenthereisnobar? Everyproduct,everybrandhastodoabitofrecontextual- izingtheirproductinthisnewenvironment.There’swork tobedone.” ThePhasesofthe NewEconomy Thecurrentstateofoureconomyisnewand unusual,saysBrianSolis,globalinnovation evangelistatSalesforce.“Boththeeconomyand thevirusputbusinessinaplacewithoutadefense mechanismoraplaybookonhowtorespond,” explainsSolis,whoreferstothecurrentshiftsas the“noveleconomy.”“Thisiswhyweseedifferent approachesaroundtheworldwithchaosand competingadvice.” Solissaysrealistic,productivemarketers craftedathree-phaseframeworktonavigatethis noveleconomy. Phase1:Survive Leadersrespondedtothecrisisbyreacting andaddressingimmediateproblems,suchas adoptingcontactlessdelivery. Phase2:Alive Brandsacceptedthedisruptionasthenewnormal andstartedbuildingafoundationasbusiness shiftedfromshocktostrategy.Manyfocusedon buildingrelationshipswithconsumersbyoffering opportunitiesforengagement—evenifthey weren’tdirectlytiedtotheirproductsorservices. Phase3:Thrive Nowit’stimetomovefromrecoverytoresilience. Businessesshouldstartproactivelybuilding infrastructureforthenoveleconomy. COREINSIGHT Historically,crises bringoutcreativity asbothcompanies andconsumers meetnewneeds. DuringtheGreat Recessionof2007– 09,forinstance, withmanypeople outofwork,money wastight.This gaverisetomore direct-to-consumer brands,whichcut outmiddlemen tomakeproducts easiertogetand cheapertobuy. Whatwillyour transformative movebe?Tolearn moreaboutDTC brands,goto page42. “Thesearenotunprecedentedtimes.…The inventionoftheinternetputmany,many companiesoutofbusiness—theoneswhocould notreinventtheircompaniesfortheinternet agebutratherdoubleddownontheoldwaythey didbusiness.” —SimonSinek,“TheseAreNotUnprecedentedTimes,”YouTube

As the virus swept the globe, brands changed how they inter- acted with customers due to social distancing and stay-at- home orders. Consumer perspectives about making purchases also shifted with fluctuations in the stock market, skyrocket- ing unemployment and supply chain issues. As many people lost their jobs and those still earning a paycheck worried about future layoffs, impulse purchasing became infrequent. Messages that resonated with consumers a few weeks prior suddenly fell flat and even seemed insensitive. “You need to re-create the customer journey for these times, and then prior- itize investments based on what you learn,” says Brian Solis, global innovation evangelist at Salesforce and author of X: The Experience When Business Meets Design. Marketers need to take a fresh look at what people are searching for, where they’re going, what they value and what they’re finding, Solis says. www.briansolis.com

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