Make hay when the sun doesn’t shine

The global business landscape is increasingly characterised by unpredictability. From geopolitical conflicts in different parts of the world to global health crises such as the Covid-19 pandemic, force majeure situations are no longer rare occurrences but a recurring challenge for businesses worldwide.

For brands, particularly those in the retail sector, navigating these turbulent waters requires more than just crisis management; it demands foresight, adaptability, and a profound understanding of evolving consumer needs and supply chain vulnerabilities.

During periods of uncertainty, consumers tend to become more cautious and conservative in their spending. Premium brands, especially those with readily available lower-priced alternatives, are particularly vulnerable as consumers prioritise value over brand prestige.

This doesn’t mean an outright rejection of all premium products; rather, it signifies a re-evaluation of perceived value and a greater emphasis on utility and necessity. Beyond price, consumers also become more attuned to a brand’s societal role and ethical stance, especially in the context of the crisis situation. Purpose-led positioning becomes more critical than ever.

How brands can future-proof themselves

While force majeure situations are inherently unprecedented, there are a few ways that brands can partially insulate themselves, and perhaps even gain a strategic advantage.

Developing a wider product portfolio A mix of essentials and non-essential products ensures continuous engagement with customers and will help to retain retaining toplines when demand disruptions arise.

Consider alternate avenues Setting up a product development and manufacturing back-end that is flexible and agile to switch between different product lines will help to take advantage of such situations by shifting focus on manufacturing those products whose demand spikes during such situations. The unprecedented speed at which pharma companies such as Pfizer and Moderna developed effective Covid-19 vaccines is an example of their remarkable agility and scientific prowess.

Building an omnichannel strategy An omnichannel approach ensures that businesses are not solely reliant on one channel and can utilise all operating channels to reach customers, whether through online sales, click-and-collect, or diversified delivery options.

Supply chain diversification An over-reliance on single-source suppliers or limited geographical regions proves disastrous during disruptions. Brands should actively diversify their supplier base, explore near-shoring or re-shoring options, and invest in localised production capabilities.

The pandemic highlighted the risks of just-in-time inventory systems, such as when supply disruptions in micro-processors affected the automotive industry worldwide. Brands with a high risk of supply chain disruptions should adopt a more balanced approach, incorporating strategic stockpiling of critical components or finished goods to buffer against sudden disruptions.

Developing a purpose-led positioning In times of crisis, consumers look beyond mere transactions; they seek reassurance, stability, and a sense of shared values. Consumers are increasingly willing to support brands that align with their values, even if it means paying a slight premium. Luxury fashion house Balenciaga actively used its platform to disseminate information about the Ukraine-Russia conflict, demonstrating a clear purpose-led positioning that resonated with a socially conscious audience.

Driving the story

Force majeure situations are testing times for creative agencies and those involved in protecting brand reputation. When demand is subdued, these agencies need to quickly understand consumer sentiments to inform the brand’s response.

The creative team needs to switch focus from long-term brand-building campaigns to those that drive immediate consumer response while still being consistent with the brand image. This will require the ability to manage various stakeholders for faster decisions, an understanding of changing media habits during crises to effectively reach out to the right audience and (this is where media planning agencies play a key role) and real-time tracking of consumer responses to ensure that business objectives are met and any corrective actions taken immediately.

While keeping focus on short-term marketing ROI, agencies should ensure that, in an attempt to ride on current trends around the crisis situation, communication remains true to the essence of the brand. For example, taking sides during a war situation or a campaign that is insensitive to a tragic situation will backfire on the brand.

Leo Burnett invented a new ‘0-3-6 Survival Strategy’ as a short-term strategy for its clients to navigate through the Covid-19 challenges which gave a better purpose and direction for their employees, while also delivering value to their clients.

In contrast, Ogilvy focused on crisis communications and shifted to service-led communication. Their ‘Steering Brands Through COVID-19’ guidance, which highlighted the need for an intersection between a brand’s purpose and an issue they can credibly step up to, became the internal playbook for many clients.

Agencies also focused on more hyperlocal, personalised creatives to adapt to the new ground realities. Cadbury Celebrations in Diwali delivered region-wise tailored ads and gifted ad-spots to thousands of small retailers, which targeted on combining brand empathy with hyperlocal media. PhonePe’s ‘Unstoppable India’ style campaign helped to lift brand sentiment in a constrained market. Agencies paired national-tone creative with digital amplification to maintain category share despite tight budgets.

Recalibrating for a stronger future

Force majeure situations, while disruptive, serve as powerful catalysts for innovation and strategic evolution.

For agencies, these situations become a turning point. For example, during the Covid-19 pandemic, industry-wide cuts in marketing budgets, paused retainers, and cancelled campaigns forced the entire industry to reexamine the client-agency partnership. As retail spending declined, companies reallocated budgets to digital, social, and commerce integrations, which aligned well with the rapid growth of digital agencies in India.

Flexible contract terms and changing client expectations are some other parameters over which this relationship could evolve.

For brands, the ability to navigate these periods successfully hinges on a proactive and adaptive approach. By understanding shifts in consumer behaviour, strategically responding across premium, mass, and value segments, embracing purpose-led positioning, and recalibrating supply chains and channel strategies, brands can transform moments of crisis into opportunities for growth and deeper connection with their stakeholders.

The lessons from past disruptions, from the global conflicts of WWII to the recent pandemic, underscore a fundamental truth: resilience is not merely about weathering the storm, but about emerging stronger, more agile, and more relevant in a world where the sun doesn’t always shine.

-Santosh Sreedhar, partner, Avalon Consulting

-Gaurav Joshi, consultant, Avalon Consulting