Millennials can make or mar a brand, says David Roth
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Mumbai: Millennials are mercurial consumers and pose a great challenge for brands looking to hold on to them in a competitive environment. In Mumbai to launch BrandZ Top 50 Most Valuable Indian Brands report, David Roth, chief executive officer, EMEA (Europe, the Middle East and Africa) and Asia, at The Store, the global retail practice of WPP, talks about how brands can address this group, why it makes business sense for companies to invest in nurturing brands, and why India’s top 25 emerging entrepreneurial brands are noteworthy. Edited excerpts:
How can brands woo fickle consumers such as the millennials?
Millennials are difficult to understand, change their mind and views frequently and are not as brand loyal as previous generations. We look at millennials in a slightly different way. The idea is to help them experience the brand as opposed to push the brand towards them. You have got to help them discover the brand themselves, and let them almost inside your organization and be part of building the brand. That’s really difficult for traditional marketers, because we as an industry have always been used to controlling the brand.
But millennials, in a sense, have control over the brand. They create and share brand content. The definition of a brand manager, for this group in particular, needs to change from a manager to curator. And as a curator, you are creating content millennials can use, share, adapt and change.
What’s also interesting about millennials is that they can help to build and change products. For instance, some of the luxury brands, even the likes of Gucci, have used crowd-souring to help designers design. And I know that was a very anxious dilemma for a luxury brand, because luxury brands among all brands have the most rigid controls as an organization. The rewards are big, so it’s not something that we can ignore.
In a competitive environment, companies tend to focus on finance and procurement. How important is it for them to also nurture brands?
Every single organization has to be cost efficient, and more productive. That is the way of the world. But there comes a limit to how much you can save. Whereas there is no limit, up until you have got 100% market share, of how much you can improve your share and sales performance. And the brand, is probably one of the best investment you can make in order to grow. At the end of the day, every investment that the organization makes has to deliver an economic return to shareholders. That’s why we are all in business. Shareholders are fickle and will move to another company if they get better returns. Our study categorically shows that strong valuable brands outperform the stock market index and deliver superior returns. For instance, the stock portfolio of the BrandZ top 50 Indian brands increased 10.8% in value between August 2014 and August 2016, while over the same 24-month period, India’s Sensex (a weighted index of 30 stocks on the Bombay Stock Exchange) declined 3.5%. In other words, $1,000 invested in 2014 in the BrandZ™ India Top 50 portfolio would have grown to $1,108. The $1,000 invested in 2014 in the Sensex stocks would be worth only $965.
Why did the BrandZ India report also list 25 emerging Indian brands?
This is first time, globally. This is really, an interesting group of up-and-coming niche brands, (which) with the advent of social media, have a different trajectory and different way of communicating with consumers. These brands didn’t fill our criteria because they’re either not publically traded or not yet large enough in brand value. In a funny way they are catalysts for changing the categories they operate in. For instance, take Uber, which has revolutionized the industry in the last few years, but wouldn’t make it to our top 100 as it hasn’t had an IPO. So I think we wanted to recognise that along with the landscape of valuable brands that are listed, there is a bubbling under of brands that we think are interesting and intriguing, because they potentially exert an influence on the category they operate in. They are the kind of brands that quite rightly keep chief executives awake at night. They don’t have the legacy of what the norms are of the industry and are run by people who think anything is possible.