These are challenging times for brand. One challenge is that of demography. A challenge that requires brands to leverage strategic dexterity and insightful planning.
Demography is the study of events that shape the structure of human populations, such as births, age, deaths, fertility rates or income. There has always been this mantra that “demography is destiny.”
Accompanying this mantra is the idea that the only events that can change the arc of demographic destiny are global catastrophes on the level of nuclear war, severe famine or pandemic plagues.
Enter Covid-19, the catalyst for changing the demographics of our nation. Although birth rates in the U.S. have been on the decline since the 2007-2008 recession, coronavirus has already overturned our future population outlook. Coronavirus has decreased the U.S. birth rate while increasing the U.S. death rate. Our life span forecasts have changed.
The forecast from The Brookings Institute – a research group focusing on the social sciences — is that there will be a possible “half a million fewer children” next year. (This Brookings report is available online.) The Atlantic magazine featured an article (also online) this past July 2020, on how the pandemic is disrupting the three key indices for population growth: births, deaths and migration. According to the authors of the article, “… the U.S. population could reach its lowest growth rate in 100 years.”
Responding For Tomorrow
Brands must address this new future of who will be the customers for products and services. Enduring profitable growth will not be achieved without a review and action agenda that addresses our demographic transformations. This means immediately developing and investing in products and services for the changing population outlook or risk profit declines and irrelevance.
Some brand-businesses are already making changes. Reckitt Benckiser makes Lysol. The organization is experiencing increased demand for Lysol due to its disinfectant properties. But, Reckitt Benckiser also makes Enfamil, the nutritious baby formula. In a world of millions of fewer babies, the future of robust Enfamil sales is uncertain. However, as reported in The Wall Street Journal, Reckitt Benckiser’s CEO, Laxman Narasimhan, is exhibiting strategic agility by using Enfamil’s expertise in infant nutrition to generate supplements for aging populations. Think adult Enfamil. Mr. Narasimhan said, “We see a real tailwind in seniors and the growth rate is not small.”
Brands that sell baby diapers, baby food, baby wipes and more are not the only ones facing uncertain futures. Fewer babies mean fewer children. Cereals aimed at kids need to take note of these altered demographic data. McDonald’s Happy Meals need to react to these demographic changes. Pre-packaged lunches, such as Kraft Heinz’ Lunchables, will need to rethink strategies, especially when schools may not be open.
Brand-businesses need to figure out how to use their expertise to address needs and concerns of older adults. At the same time, they must not forget about the younger population. There may not be large numbers of babies, but in the U.S. there are still large numbers of teens and young adults.
One of the challenges for marketers is that our coronavirus demographic dilemma has a hidden paradox. While there is currently a large generation of baby boomers, the majority of whom are in their 70s, there is also a large population of Generation-Z, born between 1997 and 2012. Millennials may seem young to Boomers, but on average they are now over 30 years old.
In other words, not only do marketers have to innovate for our pandemic-altered demography, marketers have to find ways to focus on two very different groups of people. Brands must focus on: 1) a large number of “older” customers over 70 years old; and 2) a “youth bulge” Along with the pandemic’s diminished fertility rate and increased death rate, and what these forebode, our world is older and younger at the same time.
Covid-19 may be playing havoc with our demographics, but there are opportunities for brands to address multiple cohorts with creativity and inventiveness. In order to leverage expertise in new ways, brands must be able to answer five key questions. Then, products and services should be designed accordingly.
1. What Are The Changed Behaviors By Age Groups?
Usually, brand-businesses use new product and service news to change customer behaviors. But this time, the pandemic has already changed behaviors. Data from global consultancy McKinsey indicates that due to coronavirus, 3 out of 4 respondents have tried a different way of shopping. Brand-businesses must have clarity on behavior changes in their areas of expertise. Starbucks and Chipotle are building new stores that are pick-up only. These stores are not designed for dining in but rather driving through and grab-and-go.
2.What Are The Different Cohort Problems Generated By These Changed Behaviors That The Brand-Business Could Leverage?
Just because people have changed behaviors does not mean that people are satisfied. Nor does it mean that changed behaviors are problem-free. Making online shopping and meal delivery easier for seniors is an area ripe for innovation.
Know your areas of expertise. Then, figure out what frequently irritates people and solve these irritations. Finding a relevant, differentiating solution to people’s problems is a great source of innovation. When asked about what they want, people usually provide generic, known answers. This is because most of us do not really know what we want. Think like a customer. Use common sense. Think of your own experiences. Think of what you have heard or learned from others. Look at your businesses through the eyes of your users.
For example, Covid-19 has altered people’s perceptions of assisted living facilities. Now, children of the elderly – Generation-X and some older Millennials – are rethinking sending mom and dad into nursing homes. Children of the elderly have problems. They are fearful of leaving mom or dad alone to age at home. Yet, for these children of the elderly, their homes are either too small or not designed for accommodating a senior. Lennar Corporation, the largest U.S. home construction brand-business, is addressing these concerns with new multigenerational housing. Lennar is the leading the way with creatively designed multigenerational, affordable homes that take into account the needs of senior citizens. Other homebuilders are doing the same.
3. What Are The Brand-Businesses True Areas Of Expertise?
Some brand-businesses become stuck in a category because of a limited definition of what they do well. These enterprises become unable to see the greater potential of their expertise. Kodak is an example. Thinking it was in the haloid film business, Kodak lost its way when digital film took over. Fuji Film did not see itself as in the film business. Fuji Film believed it was in the business of molecules and elements. Fuji Film scientists knew that the gelatin used in film comes from collagen. Collagen is a critical element for youthful-looking skin. Fuji took the science of film and applied it to skin care, a growing category.
4. What Is Our Brand Framework?
A Brand Framework provides the non-negotiable guidelines and policies that define the brand’s relevant, differentiated promised experience. A Brand Framework is a catalyst for innovation. The Framework creates the brand’s boundary lines within which the brand promise is to be communicated and delivered. Within the Framework’s parameters, innovation is not merely allowed, it is expected. Creative freedom is encouraged. Business leaders evaluate and activate all action on behalf of the brand against the brand’s Framework.
Crowne Plaza hotels reinvigorated its business traveler heritage using a revised Brand Framework. Every thought and action behind the Crowne Plaza brand focused on the concept of empowering business productivity while on the road. Crowne Plaza’s new business-focused room design came directly from creative freedom within its Brand Framework.
5. Are We Sourcing Ideas From Anyone And Anywhere?
Great ideas do not care where they come from. Great innovative ideas do not care who they came from. There are no rules insisting that great ideas are the purview of leaders in headquarters. Creativity is not a department. Creativity is a cultural mindset. Creativity takes time; it takes energy; it takes enthusiasm. It involves passion for an idea. And, creativity can arise in any geography within the organization or from the organization’s stakeholders.
The original “i’m lovin’ it” campaign for McDonald’s back in 2003 did not come from world headquarters and its global agency office located in Chicago. It came from Heye & Partners in Unterhaching, Germany. It was the best idea from the entire roster of McDonald’s advertising agencies around the world, including its big U.S. creative partners. This approach to creativity is even more important today. Be open to relevant, creative ideas from anyone anywhere.
Brand-businesses have an opportunity to leverage expertise and creativity now in order to remain relevantly, differentiated in the coming years. If demography is destiny, then now is the time for demographic-driven decision-making.
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Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education