Blog Post - Hugh Fletcher, Mar 21 2019

Branding is now about experience, not visibility. Here's why

Branding is now about experience, not visibility. Here's why

For decades, brands have relied on visibility for their impact. When the American Marketing Association (AMA) first coined the term 'brand' in the context of consumer goods back in 1960, it explicitly emphasised the visual elements.

Branding, the AMA said, differentiated products through signs, symbols and design as well as names and slogans. These visual aspects were integral to what became known as brand identity. The graphic qualities of branding meant that, with a single glance, consumers did not just distinguish particular products from particular vendors. They also instantly made associations and judgements based on quality, provenance and value (not to mention values).

In short, branding works on the level of symbolism - a simple visual signifier that stands for something much bigger; the entire back story of a product or company. What the AMA recognised, and what marketers have been basing much of their work on ever since, is that instant visual recognition is an incredibly powerful tool in encouraging consumers to keep buying your products.

Now, however, digital commerce is threatening to upset the order of things. As ecommerce evolves and channels multiply, opportunities to make brands visible are diminishing. Where you used to have giant billboards and neon signs, now we have smartphone screens. Not only is the visual real estate getting smaller and smaller, we are also seeing commerce move into areas where the visible just does not apply.

Hidden brands

It all perhaps started with the digital marketplace. Unlike shopping in a supermarket or department store, when people buy from the likes of Amazon, the product brand is often hidden behind the platform. This isn't just a matter of Amazon not allowing much room for brand visibility; it also reflects consumer preferences. In our 2018 Future Shopper survey of online shopping habits, respondents told us that brand was less important than price, speed of delivery, and whether or not shipping was free when making online purchasing decisions.

This loss of visibility for brands looks set to accelerate as the next generation of digital channels reaches maturity. With voice commerce, for example, as pioneered by the likes of Amazon Alexa and Google Home, there is no visual interface whatsoever - purchasing is all managed by speaking to an AI bot. 40% of respondents to our last Future Shopper survey told us they currently used or had used in the past smart assistants to shop.

Other emerging channels that are erasing the visual interface from digital commerce include automated reordering systems, which use 'smart' IoT-connected machines to detect when a product has run out before automatically purchasing it again. While pioneering examples like Brita water coolers and Nespresso coffee machines lock the customer into a single vendor, the arrival of smart refrigerators which can do a similar job will reduce the opportunities brands have to get their products in front of consumers. It is also anticipated that the growth of brain interface technology could lead to people one day being able to place orders simply by thinking about an item they are running out of.

From brand recognition to brand experience

The big question is, with reduced visibility, what power do brands still have? How do they grab attention in crowded online markets without the option of instant visual identification? How do they communicate the identity behind the brand and lock in loyalty?

The first thing to be considered is that the link between visual brand identity, consumer recognition and conversions into sales is not as strong as it was when the AMA first gave its definition of branding. As long as a decade ago, McKinsey argued that the internet and digital media had fundamentally changed what it called the 'customer decision journey'. In the digital age, consumers are empowered to do more research before they make a purchasing decision, by asking for advice on social media, reading user reviews and comparing and contrasting options on different websites.

This model differs from the traditional marketing funnel, which depicts a linear progression from advertising through brand recognition to purchasing. The funnel assumes that the consumer is a largely passive vessel and that the objective of bombarding them with sales and branding messages is to make your own stand out. That is why the instant recognition of visual symbolism was so important.

This becomes much less critical if, as in the McKinsey model, digital consumers are active agents in the purchasing journey. Their decisions are not so much based on recognition as on evaluation and, McKinsey also argued, on prior experience. Their customer decision journey model talks about a 'loyalty loop', whereby the thing that is most likely to secure brand loyalty in digital commerce is now positive prior experience.

A couple of years after McKinsey, Google expanded on this with its 'Zero Moment of Truth' (ZMOT) concept. As well as defining the body of prior experience and acquired knowledge that a consumer took with them to the moment of making a purchasing decision, ZMOT argued that modern digital consumers often decide to take supplementary actions, such as writing a review or recommending a product to friends on social media, once they have completed a purchase. Thus, it is not just the loyalty of a single customer that is at stake for brands, but reputation and awareness as passed on from peer to peer.

This can be summed up by saying that, as far as digital commerce is concerned, brand experience has overtaken visual brand identity and recognition as the key factor in influencing purchasing decisions. To bring it back to the reduction in online brand visibility, this simply confirms that brands need to think about building their equity in new ways.

Defining brand experience

Building brand equity out of CX requires a sophisticated multi-channel, multi-discipline approach. It requires high quality, engaging content on the platforms that are most relevant to your customer base; active participation in the conversations that are taking place on social media and elsewhere; tight integration with sales channels to ensure seamless, convenient shopping experiences, top quality service that adds value at every opportunity and intelligent use of CRM to personalise the whole journey.

The key point with brand experiences is that they do not rely on a single point of identification such as the old brand symbol. They are a sum of all the content, reviews and recommendations any potential customer can find across any channel. If they are using a smart voice assistant like Alexa or Google Home to shop, it doesn't matter that they cannot 'see' the brand. They can ask the assistant to make a list of recommendations for a product with X, Y and Z specifications with at least four-star reviews, and then sort them by price, free delivery and so on. Equally, they could ask what products are trending on the social media platform of their choice.

In terms of locking in loyalty, some of the emerging 'faceless' digital commerce channels actually benefit brands built around CX. We have already mentioned examples of automated re-ordering through IoT devices tying consumers in to certain bottled water or coffee brands. These rely specifically on building a reputation for convenience and quality to attract new purchases.

Another example is subscription commerce, which according to Nielsen already accounts for 20% of online spend. High profile services like The Dollar Shave Club, BirchBox and Ipsy are explicitly selling an experience; one that pushes convenience and value to the fore to lock in loyalty. Amazon is also in on the act with Subscribe and Save, creating the world's biggest online subscription service in the process.

Finally, the next frontier for CX brand-building is perhaps personalisation, and here cutting-edge technology comes to the fore. With AI already being deployed in voice commerce, the next stage is applying machine learning so digital personal shopping assistants are able to filter out recommendations based on individual preferences and tastes.

Technologies like AR and VR will help brands create stunning immersive and interactive experiences to further drive engagement and participation. And also waiting in the wings ready to make its entrance on the digital stage is so-called 'active content' - technology that can read and/or predict a user's response to something they are viewing or reading, and change accordingly. Google is already known to have filed a patent for eye-scanning technology embedded in a device that can 'read' emotional responses in just this way.

Voice commerce and the changing nature of branding is just one of the digital trends we explore in our Futures 2019 trend report.

Download Futures 2019 report