BRANDS HITTING ECONOMIC TURBULENCE! WHAT CAN WE LEARN FROM AIRLINE PILOTS?

Photo used under Creative Commons. By http://www.flickr.com/photos/lockergnome/27276309/

At a recent trends presentation I attended by the market research house Nielsen talking about mass market grocer trends, they made a few points that are of note and importance I felt. And also were a bit of a surprise too...


The basic premise and analogy given was that we are going through a period of “turbulence” economically, and they argued that if an airline captain reacted the way that retailers and manufacturers are reacting to turbulence, you would find yourself on a very scary, wild and irrational flight! One that would be overly dramatic and very unpleasant. An airline captain when entering turbulence would ask passengers to buckle up and make some fairly limited adjustments to the high or direction and get through it without too much drama and upset.


However, what retailers and manufacturers seem to be doing is wild and over exaggerated movement and adjustments. The point they were making is that if you look at trends over time you would not do that at all, but focus on the core key fundamentals that the trends show. And ride out the turbulence with a clear focus on the destination ahead.


There were 3 key factors and trends that stood out to me that support their view on the best approach:


1: Consumers tend to shop where they always shop, and there is huge inertia and not dramatic shifts taking place in where they are shopping for groceries and related items. The key factors affecting this are the strength of the retailer brand and what is stands for in the shopper’s mind and location. They argue that retailers need to focus on having a clear and differentiated brand story and proposition for their chain and stores, above and beyond just price.


2: There is no data showing that shoppers change their favoured store due only to promotions, but they do look at and seek out promotions in their preferred store. This did resonate with me as a shopper. It shows the importance of constantly improving and looking at how you offer value and keep interest in the brand to get repeat and loyalty. Or shoppers may jump to and from what is on deal.


3: Private label gains share at the expense of smaller and 2nd tier brands. The market leader with a clear proposition and support tends to be affected least. It shows the important of having a strong brand, strong offer and differentiated offer that you support and reinforce. Or consumers will drift into the private label offer as they will start to seem better value, or price will start to drive choice as offers are seen as less differentiated and more similar.


Some interesting thoughts, about how it is important to focus on the good practices and core fundamentals of branding and building brands – even in times of turbulence.


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