As brands and planners across the world sit down to figure out mission 2023, what should we watch out for? Unless you have Nostradamus in your strategy team, the best you can do is make informed assumptions basis the developments we have seen of late. Before we label these developments as “trends to watch out for”, I like to evaluate them on two parameters:
1) Speed: How fast is this trend moving? This helps ascertain the pace at which businesses might have to adapt to it.
2) Scale: How big an impact could it have? A potential trend can move at a very fast pace but only impact a niche audience. Or it can develop slowly but affect a larger audience base. Scale analysis helps one ascertain the macro patterns that’ll require you to focus on certain strategic aspects relatively more than others.
Together, these two factors help you to weave in a degree of flexibility in your strategy since you are accounting for two relative variables as opposed to treating everything on a similar footing.
Taking that into consideration, the following are the key trends I see for brands in 2023 from a strategic perspective:
1) Restrained spending: High inflation, coupled with layoffs and a looming recession, would heavily impact users' disposable income and discretionary spending across categories. Though the impact may affect different geographies in varying degrees and scales, people are bound to be more circumspect about where they spend their money and likely to gravitate towards brands with equity.
Prices are bound to increase, making customers question the utility value of certain products & services. So how marketers emphasise pricing in their strategy will be key to remaining in the good books of the customers as they’re bound to be exhibiting a conscious purchase behaviour which should be thoroughly understood before locking marketing comms to not appear insensitive or detached from reality.
2) The supply chain crisis: With some of our clients and businesses across geographies, we’re seeing how global factors and the changing dynamics during the pandemic impact the raw materials' backend supply. Semi-conductors and chips for the auto and tech industries are some notable examples. Customers get annoyed when they’re made to wait to make the final purchase for reasons beyond their control. Thus, more than ever, marketing and procurement need to be strongly interlinked to gauge the issues affecting supply and manage demand accordingly. Marketing has to play a key role in interfacing with the end consumers and be ready with different tactics to manage these uncertain circumstances – extended promotions, transparency, constant communication, and alternative solutions, to name a few.
3) Performance marketing holds the key: As consumers will be very particular about where and how much money they spend, brands that demonstrate an effective performance marketing strategy will become stronger. When you put a tab on how much you’ll spend, you apply a filter to everything, and that’s where addressing the right trigger becomes important. Unlike the pandemic, when brands switched to branding to appear empathetic and not just salesy, showcasing relevance and value for money to the consumers in these tough times will be the key as people have also evolved from that time when they were just stocking up on savings.
4) AI - the second wave: Tech has become an integral part of how brands communicate with their audiences today, and it’s a good space to be in, with healthy competition brewing all around. I expect AI to have a second wave of resurgence in how it impacts our lives. While brands are opening up to experimenting with AI tools to automate their communication (watch out, copywriters), there’s great scope for the same to be applied to solutions that solve key problems for the end users. Coupled with a potent platform strategy, AI might be the one to have an impact at scale.
5) Unlearning social media: The hitherto segmented view of different platforms in our social media strategies needs a relook as behaviours become more and more layered and fragmented. This was the first year Meta saw a YOY decline in ad revenue. While brands are questioning the ROI here, they’re also apprehensive about what becomes of Twitter. Parallelly, TikTok has become a giant in this space, clocking tremendous growth. Conventional user journeys have also evolved.
#TikTokMadeMeBuyIt is a clear example of how platforms redefine intervention points in the journey. More and more people are deciding where to eat out basis the pictures on Instagram. So, before we jump into a strategy for 2023, it’s handy to relook at the day in our audience’s life to see how it has evolved and what it means for us.
Secondly, concerning effective engagement, brands are likely to benefit by co-creating with creators with an active community on a long-term basis as opposed to ‘a bit of this and a bit of that’ campaigns. We are seeing strong, loyal engagement for some YouTubers and podcasters, which is a ripe opportunity for brands looking to strengthen their connection with the audience beyond the transactional metrics.
Given the VUCA world, we're in, it's imperative for marketers to not only plan their 2023 strategies keeping these points (and more) in mind but also be alert to new trends that shape up to be better prepared in dealing with them. Just like products, people expect brands to be relevant to the times and lives they're leading.
(The author is VP - Kinnect.)