By John Grant
John Grant’s new book Greener Marketing comes out in August 2020 (Wiley)
Things are slowly returning from lockdown. At some point ‘normal’ life will resume. But things are going to be very different. Challenging for one thing. With a shrunken economy, austerity measures, some consumers not spending and many businesses struggling.
It’s also an opportunity to make a step change. Hundreds of CEOs from large companies signed #greenrecovery commitments. Mainly because we can’t afford to ignore the climate crisis. In 2008 efforts on sustainability were shelved by many companies and governments then focused on the economic slump following the banking crisis. This put us back ten years. We do not have another ten years. Our house was on fire. And now there is another economic fire in the basement. We need to tackle both together.
Even the general public think things will not be the same. A survey in the UK by Sky found that 59% thought that life in Britain would be significantly different after the pandemic, while only 29% thought it would be much the same. The survey found that 49% expect to shop more online, 47% expect to keep working from home, 37% to take fewer foreign holidays. Changes in everyday life include a dramatic mass shift to doing everything digital – meetings, groceries, yoga classes… Also an appreciation of some of life’s slower pleasures. Like the crazes for baking, cocktails (the Quarantini trend), vegetable gardening.
What’s the best way to approach this new phase?
I think we need to shift from treating business like farming, to being more like hunter gatherers. Not gradually harvesting small returns from long term investments. But being alert, curious, agile and acquisitive every day. Being ready to pivot. Testing new products, segments, positionings, even new brands. And finding out what to scale. Not assuming we know what customers think. Or know what they will value, or will regard as ‘essential’. Because all of that may have shifted dramatically. And it may keep changing.
That’s pretty much what life in a start-up is like. To do this in a large company requires breaking things up, letting business units be freer to roam and experiment. Leadership as a support service that can help get central resources behind promising green offshoots. You need to change your process too. Daily stand up meetings not monthly planning. Creative campaigns made using sprints, rapidly iterated with test and learn digital methodologies.
In past periods of austerity, ethical and environmental brands suffered because people weren’t ready to pay more for them. But we’ve already seen 30-40% growth in organic food sales during lockdown. Perhaps people were looking after their health and immunity? Perhaps it is also a shift in priority, more focus on simple daily pleasures like cooking? An Ipsos survey found that 79% globally said that one long term impact of the virus was that they would ‘seek out products that are healthier and better for the environment’.
It’s not just food. I’ve spoken to eco entrepreneurs in markets like beauty and fashion. Many have had an extremely busy few months. One reason (if they sell online) is that Facebook advertising costs dropped by two thirds. While conversion rates also increased because shops are shut and there was less competition. Consumers were stuck at home, bored, not spending as much on things like going out. And so minded to spend online. Behaviours like sending small physical gifts to friends and family also increased. There has even been a greater sense of community and wanting to support ‘the little guy’. These changes might be quite specific to lockdown. Or they might not. They say it takes 60 days to form a new habit.
As far as the #greenrecovery goes I wont make a big case for it here. Suffice to say that a global survey by IPSOS in April found that:
- 71% agree in the long term, climate change is as serious a crisis as Covid-19
- 65% of the public support a ‘green’ economic recovery from the Covid-19 crisis.
Fact is, if you work for a big company (H&M, IKEA, Nestle, L’Oreal) you may already be committed to it as a goal and now trying to work out how to deliver on those public pledges. If you work for a purpose-led company, you wouldn’t have it any other way.
But how to do it? How to revive and drive the business and at the same time also make radical sustainability gains? That’s something I’ve been researching over the last two months. Here’s a map of some of the most immediate strategic options:
MUJI grew up in Japan during a ten year recession. That was when their culture veered away from an obsession with designer labels and luxury brands. The new generation didn’t want to buy LV handbags. They embraced things like street fashion. MUJI’s design principle is doing less (for instance not bleaching paper and fabrics) to be more eco and more beautiful. The name means ‘no logo’. Doing less also makes it cheaper. When I first met the brand in Japan in the 1990s, MUJI were selling a perfectly nice pair of jeans for only €2!
MUJI have a genius for spotting waste and hidden value. Their first product was spaghetti hoops that were actually offcuts from the pasta factory (previously thrown away).
That’s the mindset behind eco saving. What
could you do that strips away 90% of the cost and resource impact. But still
does the same job and gives the same joy?
Ingvar Kamprad the IKEA founder used to say any fool could design a desk. But it took creativity to design a desk for only €10. It’s often about finding an ingenious reframe. Kamprad had the idea of selling designer bare metal bins. These cost €100 in competitors shops. But he managed to do his for €3. How? By going to the catering company that supplied tins of tomatoes. And asking for the tins without the tomatoes (or the lids).
CHEAP TIME TO GROW
Advertising is cheap. Money (because of
interest rates) is cheap. If you want to grow something green you may also have
access to free ‘stimulus’ money or sustainability linked loans. Many green
markets are in steep growth. Like vegan shoes. If you can sell something online
for €100, make a margin of 70% and it costs you €10… you do the maths. The more
money you put in the more revenue. And if you can scale parts of your business
rapidly this may compensate for other tougher markets, give you a way to keep
IKEA has a longterm strategic principle to invest in a downturn for exactly this reason.
The other great thing today is how accountable marketing is through digital channels. You can make daily decisions and see the results. That data will also help you build a picture of what segments and propositions are working. Using Geoffrey Moore’s bowling alley model you can look for ‘neighbouring pins’. For instance, say you are an online travel booking company. You might see an uplift in international key worker journeys. Like government employees travelling to Brussels. That might lead you to find other ‘essential journey’ segments. Like industrial maintenance staff in demand as factories reopen.
NEW DEAL – A WIN:WIN
The time honoured principle of marketing
for the last 70 years was to do everything for consumers and make it
convenient. Like ready meals that people just needed to microwave.
The opposite may be true in the next stage.
The big win could be selling fresh ingredients and teaching people to cook – while sharing the savings made because they use their kitchen not your factory. Hello Fresh in other words. Supermarkets might increasingly sell vegetable seeds and plants to grow at home?
This is another IKEA principle. They shifted the factory to the home. And in return sold furnishings so cheap the majority could afford them. That kind of low cost collaborative model could apply to almost any market, from computing to fashion.
New deals can also come from flexing the business model and terms. People may want to pay for insurance by the day. Or to rent many things they previously had bought.
To make radical green gains and at the same time business breakthrough results just requires one thing.
For decades consumer electronic businesses struggled to market the LED light bulb. Partly because the light was harsh. Partly because it was so cheap and long-lasting you’d be killing your business. Then along came Philips Hue. A new need (interior design), a new segment (millennial geeks), a new price point (100x higher) and a new channel (the Apple store).
That kind of paradigm shift can happen in any market. And it creates 10-20 year successes.
That’s the big opportunity here. Be part of tomorrow’s Green Economy.
The simplest way to do this is what Philips did. Create a Moonshot project. Give some talented and subversive employees the space, time and budget to ‘make a splash’.