“The most challenging crisis we have faced since the Second World War” is what UN Secretary-General Antonio Guterres called the outbreak of the COVID-19 pandemic around the world. As of the writing of this article there are almost 2.5 million confirmed cases in 185 countries or regions, with numbers increasing despite efforts to flatten the curve. At the same time, the economic effects of the crisis are still unfolding – the U.S. are facing the highest rates of unemployment since the great depression, for example, and whole industries like travel, traditional retail and hospitality are struggling not just to minimize losses but even to survive.
Where we go from here
In our work here at Seventy, we examine trends and shifts on a daily basis – be it short- or long-term, focusing on consumer behaviour or developments in industries and society as a whole. There is no doubt that this crisis is already changing the way we live and do business and will have major and long-lasting effects on all levels – from individuals to companies and brands to entire nations. What will the post-COVID-19 world look like in 1 week, 1 month, 1 year or even 10 years from now? What will be the “New Normal” once the world hits play again?
Solidarity vs. protectionism – shutting down or opening up
While some argue that we are going to see a brand new world developing in real time right in front of our eyes, others see the pandemic as simply speeding up ongoing shifts and changes – from an acceleration of digitalization, a more critical view on globalization to distributed workforces, etc. In this article, we will examine one of the more challenging aspects and developments of the current situation and what it could mean for brands and companies: the struggle between solidarity and protectionism in a world affected by COVID-19. The – sometimes difficult – dynamic and balancing act between those two responses can be observed on both a micro and macro level: individuals as well as companies and nations.
We will see a long-lasting effect on behaviours and values
When it comes to individuals, we can see clear examples from both ends of the spectrum, some more extreme than others. On the one hand, we have seen neighbours showing solidarity and sticking together, offering to run errands for people in need. We have seen whole cities applauding their local health care workers to show appreciation, or thousands of people volunteering in the UK to help the the UK National Health Service supporting the most vulnerable and people in need. At the same time there are reports of people hoarding supplies, emptying shelves in supermarkets and even fist-fighting over toilet paper. Fears of the outbreak and its consequences have also fueled xenophobia around the world, mostly targeting people from Asian countries with even Donald Trump insisting on calling the virus the “Chinese Virus” for a long time. It is interesting to observe how people react in such difficult times and we will unquestionably see long-lasting changes not only in people’s needs and behaviours, but – and maybe more importantly – the values and attitudes they hold.
No more business as usual – the death of unrestricted globalisation
The same is true on a macro level, namely how nations and companies react to and tackle the crisis. When it comes to countries’ responses, the New York Times reported that at least 93 percent of the global population now lives in countries with coronavirus-related travel restrictions, with approximately 3 billion people residing in countries enforcing complete border closures to foreigners. France accused the United States of buying Chinese face masks bound for France while, ironically, simultaneously imposing an export ban for face masks supposed to be distributed to other European countries. At the same, we can also see increased levels of collaboration between countries, like South Asia joining forces, coordinating their responses, and pooling resources to fight the pandemic. Countries are clearly struggling to find appropriate measures and strike a balance between the two extremes of solidarity and protectionism and companies are facing similar challenges. For example, COVID-19 is undermining the fundamental principles of globalisation with its multi-step, multi-country supply chains. As a result – and a protective measure – we can see a need for companies to rethink and remodel production, insource parts of their value chains and become more resilient.
Showing solidarity during a crisis
On the other hand, there are countless examples of companies showing solidarity and using their resources to contribute during the pandemic. Streaming services Netflix and Spotify started funds to support those in their respective creative communities who have been heavily impacted by the virus. Electric car manufacturer Tesla announced that the company is working on building ventilators to help patients with severe symptoms of COVID-19 with two-thirds of the materials used being already-existing parts for Tesla vehicles. These actions are in line with consumer expectations: research has shown that brands are expected to play an important role in crises like this and some consumers even report higher trust in brands and businesses than governments.
An opportunity for brands
With these and other examples at hand it is clear that while the situation might be difficult to navigate – and some companies are focused on surviving at all – the COVID-19 pandemic also offers an opportunity for companies that are willing to adjust to the “New Normal”. It is a rare opportunity to clearly position themselves and show what they stand for, both during the crisis but also – and maybe more importantly – for the post-corona future. Below we examine four specific areas – collaboration, walking the talk, digital togetherness and agility on demand – that brands can focus on to navigate through the pandemic and create long-term, lasting brand equity:
- Cross-industry collaboration – When the city of Austin, Texas announced in the beginning of March that it would cancel the annual South by SouthWest (SXSW) festival, it was a huge blow to short filmmakers whose work was set to debut there. To help the situation, marketing automation platform Mailchimp and independent film company and distributor Oscilloscope Laboratories teamed up and created a digital home offering the vast majority of this year’s SXSW shorts online for free. We believe this to be a great example of opening up and working together in times of crisis. Not only does it strongly position both companies, it also gives them the opportunity to break new ground and test a new service.
- Walking the talk – Here at Seventy, when working with brands, we often talk about the “Why”: why does the brand exist, what is its ambition and reason to be. A crisis like the current one is a chance for brands to put words to action and make their purpose come to life. A great example of this is ride-hailing (and food delivery) company Uber: the company announced that it will offer 10 million free rides and deliveries to health care workers, seniors and people in need. While critics may see this as a marketing stunt, it is a move that is clearly in line with the company’s purpose of “igniting opportunity by setting the world in motion”, shows solidarity during demanding times and will certainly build the brand’s equity amongst stakeholders and consumers.
- Digital togetherness – Sometimes a crisis is the perfect feeding-ground for creativity. While many people are struggling with the effects of physical distancing during the pandemic – not being able to meet family and friends and enjoy group activities like going to the movies together – some developers were quick to find a creative solution to the problem. Netflix Party, a Chrome extension, lets you watch Netflix videos with your friends and chat together at the same time. The video is synched which makes it possible to watch the same thing at the same time. While this may have started out as a gimmick to overcome the barriers of distancing, we can certainly see this as a full-fledged feature implemented by Netflix to make streaming at home more social, interactive and fun in the future.
- Agility on demand – While many companies are struggling due to plummeting demands, some are quick to act and adjust to the new situation. German sportswear manufacturer and retailer Trigema was forced to close its stores and has seen its sales decrease by 50% since the outbreak. However, seeing an increasing need for face masks for health care workers, the company was quick to adjust and is now producing up to 100.000 reusable masks per week. This does not only generate new revenue streams, it also shows that the company is agile and fast to respond and, additionally, creates good will during a PPE (Personal protective equipment) shortage.
Many of the actions that brands are taking now and in the coming weeks and months might be seen as temporary strategies, marketing stunts or one-off activities to show some level of solidarity in the eye of the public. However, we would argue that the crisis represents an opportunity for brands to live up to their aspirations – going from words to actions, using their resources and strengths for impact, to clearly position themselves and to create long-lasting brand equity. Yes, brands will need to adjust to the crisis and some will definitely struggle to survive. However, we see this as a chance for brands to make meaningful adjustments, try new strategies, products and services and decide who they will be for the next 5, 10 or more years. There will be a “New Normal” and, in our opinion, it will be dictated by brands that are open and willing to collaborate, truly driven by purpose, use their creativity to find new solutions and are agile enough to implement those solutions.
These and similar issues are something that we are currently discussing with many of our clients. If you would like to hear more of our thoughts or how we could help your brand steer through the crisis and come out on the other side stronger than before, feel free to get in touch with us at andy.kreidenweiss@svnty.com or bernhard.luthi@svnty.com.
For more insights on the impact that the COVID-19 crisis will have on brands and what we believe companies should do during this crisis, see our founding partner Sandra Lindholm-Wu’s thought piece for Resumé [pay wall, SWE] here.