Sidney Evans: The Genius Index is a regularly updated list of brands studied by your firm. What is a genius brand, in fact? And what are five things that genius brands do well?

Maureen Mullen: We use the digital index to measure the digital competence of brands. We have been digging back to 2009, researching 14 different sectors across 10 different geographical zones globally, to measure the way brands perform from an online perspective. This includes everything from e-commerce to social media, digital marketing, and mobile strategies. And we have found quite a few commonalities or similarities between the digital geniuses that top our ranking:

  1. Digital geniuses tend to skate to where the puck is headed rather than focus on what might be top-of-mind now. They like to take risks around new platforms – whether that’s voice, omnichannel, or just being really perfective around their mobile strategies.
  2. The geniuses really embrace a “boring equals sexy” mentality. They’re not obsessed with bright shiny objects, but rather get into the nitty-gritty, tactical ways of digital marketing. Actions like search engine optimization or sending an email that’s very well segmented may not be the sexiest of things, but (in my opinion) geniuses tend to be very good from an expectation standpoint. I think that Home Depot’s strategy is a good example of this; they digitized the user experience for big-box retail, even if you don’t hear as much about them as you do about other innovators. They do an exemplary job (operationally-speaking) of optimizing their stores for e-commerce.
  3. Digital geniuses get a ton of accolades for their social media and content and products, but what people might not recognize is that they do a remarkably good job of protecting their brand on Google through really smart and tactical search engine optimization.
  4. Digital geniuses also think progressively around platforms like Amazon and, if they do operate in China, platforms like Alibaba. They’re not just sitting there waiting to be subtle prey, but rather actively playing offense and defense. And that means a variety of different things. In certain industries, this really requires taking the bull by the horns to shimmy in on Amazon by maximizing your growth potential. In industries within the luxury sector or of high-market products where Amazon might not be as successful, it’s really about having tight control over your supply chain, making sure that your products aren’t appearing in certain searches, and protecting your own destiny.
  5. Geniuses tend to be mobile-first. Everybody talks a big game about mobile and we all recognize the stats now that mobile is responsible for about 60% of all of our usage. However, you still see most companies develop websites, media strategies, etc. for more of a desktop mentality and then retrofit them to be mobile optimized. Nevertheless, some companies are constantly thinking through mobile solutions that make sense based on the utility of a mobile phone. A good example of this is Sephora, who invested in a mobile strategy before it was cool. They really use their mobile application to be the connective tissue not only with their loyalty program, but also how consumers shop both online and in store – which has become a real point of differentiation for them.
  6. The final area that I think geniuses do have in common is that they’re becoming great storytellers. Historically, the market has rewarded companies that underpromise and overdeliver; in the era of Amazon and Alibaba, however, we are actually witnessing that rewrite itself as Amazon begins to make promises around things like drone delivery that won’t be realistic for the next 5-10 years. They get a ton of free press and additional threads of access to a remarkable amount of capital. You’re starting to see traditional organizations – and the one I will point to that’s a genius when it comes to big-box grocery is Walmart – taking a page from the Amazon playbook by really beginning to trumpet their innovation. They’re not afraid to speak publicly when they decide to kill something that hasn’t worked; they did that with their ShippingPass program (which was an Amazon-like copycat). They’re being very vocal about a lot of the organizational changes that they’re making and I think that this has completely transformed their culture around painting that innovative vision.

SE: Video has definitely emerged as one of the dominant branding strategies for 2018. According to your Director of Intelligence, social platforms have emerged as a vital component of a strong digital, video strategy. What are the most important components of an effective video strategy to drive online growth?

MM: First and foremost, when brands attack the opportunity of online videos, they have to think about it different than they how they’ve planned creative historically for television updates, with media budgets and media planning. Nowadays, there are all sorts of new platforms available for shooting videos: Snapchat, Instagram Video, and Facebook Live are just a few examples. On the one hand, some might say that this makes it easier for brands to create and promote video content, but it’s really important to get tactile in those media. There’s a lot of running room for organisations that can generate very creative, authentic video content using their platforms natively – organisations just tend to think that it’s a lot easier to achieve that than it really is.

Some media mechanisms on social platforms, in particular for video, put a little bit of a different focus creatively. If we look at Facebook autoplay video or Instagram video, then we would estimate somewhere between 40-50% of videos are viewed without sound. This means that – from a sheer tactical, creative standpoint – you need to think about visual formats where you can put the call-to-action upfront because oftentimes the video isn’t viewed to completion. You can really see and get that branding message through the visuals independent of whether or not the consumer’s listening to the voiceover.

Another trend around video particularly is the YouTube platform. YouTube is as much a media platform as it is a search platform, so thinking about video in a search engine optimized context where you can actually – rather than just pushing video out and interrupting the consumer – you can actually pull consumers in through how-to content, product demonstrations, product reviews, etc. The final point is recognizing that some brands are great with video without actually doing a whole lot to create that video and are getting their products into people’s hands. The beauty industry is famous for this with the vloggers and creating a lot of the “looks” that use their products. But there are even disruptors like Allbirds. The packaging of their wool sneakers is such that people have such a fantastic time unboxing their Allbirds sneakers that they actually film it and put it on YouTube. In my opinion, disruptive brands need to focus on the way they can get consumers to create content on their behalf.

SE: Omnichannel is an ongoing challenge for retailers, but one they know they must meet and overcome. According to recent study by your firm, specialty retail brands made the most improvements in omnichannel competency, seeing a 75% increase in adoption of the analysed site features. Why is omnichannel success crucial to a brand’s success? What are the specialty retailers getting right?

MM: I think that the rumours surrounding the death of the store have been greatly exaggerated. In an era where the news is covering retail bankruptcies and retail store closures, it’s easy for one to think that everything is moving towards e-commerce models. The reality is that the majority of consumer categories still do anywhere from 50% on the low end all the way to 95% of their sales in a traditional brick-and-mortar environment. Now, where I do think the path to purchase has changed dramatically is that the vast majority of those brick-and-mortar purchases are heavily influenced by online research behavior, online customer service, and by digital touchpoints. So, we really see the effective omnichannel strategies oftentimes starting digital-first, but providing a clear path specifically to the stores. SEE ALSO:You Don’t Know the Power of Brand Experience Until You Know Tea Traditions

An interesting example of an organisation that has been successful is Best Buy. Back in 2012, the retailer was kind of left for dead with close to zero probability that they would be around today. The phenomenon of showrooming – people going into Best Buy stores, checking out the TVs, appliances, and what have you, and then going on and buying them for a lower price on Amazon – hit them hard at that time. So, what they did was doubledown on investments in their stores and real-time inventory visibility, actually shipping products from their stores so that they had more flexible inventory pools and could get products to consumers faster. They also managed to create a really good antidote, so to speak, to brands like Amazon by providing seamless links to their blue shirt services. There is definitely a subset of consumers that loves online shopping, while reading through the reviews, informing themselves, being pragmatic and purchasing products seamlessly, but there is an equally large cohort of consumers that don’t necessarily know the difference between a 4K and HD, and watch TV in stalls on their wall. And I think that Best Buy, through their omnichannel strategies, are really linked in there.

But even seeing nontraditional brands that you wouldn’t necessarily think of as having super robust store strategies – brands like ASICS – to provide real-time inventory (so that you can see specifically what shoes and items are available in their retail stores); you can actually book appointments and do all sorts of things that use that online touchpoint as the drive path to get the consumer into that retail store environment.

Chanel, one of the most iconic players in fashion, has never actually supported direct-to-consumer e-commerce. However, they recently invested in a company called FarFetch and began creating virtual reality experiences that oftentimes start online, but then connect to the store. They believe this to be such a powerful touchpoint for them that they’re going to embrace more connected technologies in order to get people into their stores (after starting their experiences online) versus full, end-to-end e-commerce.

SE: While international expansion is often seen as an answer for revenue growth, most brands struggle with overseas growth. What are some of the best practices in digital strategy that brands should master when thinking about international expansion?

MM: Digital, in a lot of ways, does make international expansion a little bit easier. Media and retail have inherently been local animals. But the biggest digital media players (Google and Facebook) are effectively global everywhere with the exception of China, and Amazon is increasingly becoming a global retailer with at least 35% of their overall retail revenue being in Europe – if you compare that to a retailer like Walmart, then I don’t believe they’ve ever exceeded 9-10%. That does make it a little bit easier, but then you also have brands that test the waters in international markets by using direct-to-consumer e-commerce before creating their own end-to-end store strategy.

A lot of the challenges for brands are similar to ones that have always been. You still need to navigate the global-local phenomenon around. If you have a global brand, then you want to keep equity and communication pillars as consistent as possible; but, at the same time, that brand (and its products) has to be locally relevant and able to tap into that nuance. SEE ALSO:Brand Equity: A Strategic Pillar for Competitive Advantage in Luxury Markets

We also see that there are definitely nuances from a consumer behaviour standpoint: if you’re looking at opening e-commerce in a market like Germany, then you need to know that 50% of e-commerce purchases in Germany are returned. It’s just how they approach e-commerce – they try before they buy. This makes the operations for running a successful e-commerce business in Germany much more focused on successfully processing returns then (potentially) selling products, so it’s a completely different animal then say a market like the UK where click and collect with retail stores really hasn’t seen heavy adoption.

Another big market that I think is of interest for a lot of brands is China, where there’s increasing demand for foreign goods, particularly on the luxury side. And China has a lot of platforms to take advantage of: Tmall, for instance, has leaned in with Tmall Global. They actually focus on helping international brands enter China exclusively via e-commerce and also provide Chinese consumers with a safe place to buy branded products. So, I think there are a lot of interesting opportunities for brands to dip their toes in the water in a market that obviously has many favorable circumstances from a brand perspective.

SE: Trademark: What is the next great challenge for brands?

MM: From a technology perspective, I think that the biggest challenge for brands in the next decade is going to be the increasing prevalence of voice-based interfaces. When you look at Amazon Alexa or Google Home – and Alexa is definitely winning right now from a market share standpoint – you are going to have a platform that we believe is going be the most transformative technology of the next 10 years (just as the mobile phone has been for the past 10).

Voice completely challenges the traditional adages of branding because the consumer can ask a voice interface about a product or even purchase a product, but they don’t have access to pricing information, product packaging, or placement on the shelf. I think it completely challenges traditional brand management; in this arena, if you want to be a forward-looking brand, then you must be thinking a lot not just about how to maximise or optimize for the current Alexa algorithm, but also about the consumer behaviour around how people use voice in their home and how you can provide benefits as a brand. You might not always score a purchase, but it will introduce you into that consumer behavior. SEE ALSO:What Brands Need to Know to Succeed in the Age of Intelligent Agents

The other point I will make, and this isn’t anything new, is that every brand – irrespective of its industry, distribution strategy, and price point – has to have a strategy for both Amazon and Alibaba. That might not be a distribution strategy, but you have to understand the impact that their platforms have on your business. Even if you feel that they’re an arm’s length away from the platforms actively touching your consumers, then I think that that’s a mistake.

Amazon is probably the first retailer that – with a press release – has been able to take the stocks down in any given industry within a 24-hour period. I think every kind of consumer brand, even services and B2B brands, need to be thinking about the impact it could have on their business.

SE: As a follow-up to that, what kind of role do you think privacy is going to play in the voice-interactive routine?

MM: I think voice interaction is going to be really interesting taking into consideration Facebook’s recent data breach and scandal. What we’ve seen is that if a platform is ingrained enough in consumer behaviour, then even when there is massive privacy concern, it doesn’t feel like it has a huge impact in terms of consumers’ willingness to access that ecosystem. I think the big let-down of the last several weeks has been that, although consumers are in some way horrified by the amount of exposed data and the way Facebook has used that data, you’ve actually seen it have very little impact in terms of the overall usage of the platform.

Voice, in my opinion, is likely going to be similar as it provides and becomes ingrained in how we live our lives. Privacy concerns, unfortunately, become somewhat second fiddle. It’s definitely something to keep an eye on, but I don’t think that (to-date) we’ve actually seen it impede the progress of technology and the impact it has on consumer brands.

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