Marketing in the COVID-19 recession

This article is part of a series of articles from the WARC Guide to Marketing in the COVID-19 recession. Read more.

Why it matters

Agile and competitively-minded brands that strategically invest in tough times can capture market share and be best-placed to capitalize on opportunities arising during the economic rebound and beyond.

Takeaways

  • Manage all time horizons. Marketers who turn crisis into opportunity consider and address impacts across the short, mid and long term
  • Don’t wait for recovery; adapt to changes and focus investment on what is profitable now.
  • Be ready and agile for the After. Look for lasting shifts, both attitudinal and behavioral, new needs, new priorities and new competitive opportunities.
  • There's an opportunity to convert first-time category users into loyal customers. A Kantar survey among Chinese consumers showed that 84% tried at least one new service for the first time during the novel coronavirus epidemic.

In every crisis lies an opportunity

The Chinese word for crisis carries two elements, danger and opportunity. No matter the difficulty of the circumstances, no matter how dangerous the situation, at the heart of each crisis lies a tremendous opportunity.

While the COVID-19 epidemic continues to take a huge toll on people, communities, the economy and business as whole, this is not the first crisis brands have been faced with in recent history, and there are some valuable lessons to be learned from the current situation.

In these uncertain times, one certainty is, the COVID-19 crisis will pass, and there will be an After. Until ‘after Covid', brands will need to find new reserves of agility, creativity and resolve.

While every crisis is unique, we’ve identified five timely and timeless lessons from the past that are still relevant today:

  1. 'Black Swan’ events can break a brand – or make it: ‘Black Swan’ events like SARS, the 2008 financial crisis or COVID-19 are moments-of-truth for brands (and marketers) – of their purpose, values, commitments; but equally of their agility, creativity and spirit.
  2. There will be an after: We don’t yet know when, but when it happens, it will happen fast, releasing pent-up demand.
  3. But it will be a different place: Marked by lasting shifts, both attitudinal and behavioral, creating new needs, new priorities–and new competitive opportunities.
  4. The key is managing all time horizons: Marketers who manage to turn crisis into opportunity are those who consider and address impacts across the short, mid and long term.
  5. Be prepared: Fortune favors the prepared, agile and decisive – true in good times, even more so in testing ones.

We also believe that brands across the world should firmly grasp the following 10 best practices to prepare for now and the future:

  1. Don’t wait for recovery; adapt to changes and focus investment on what is profitable now.
  2. Review product / SKU portfolio due to changed consumer behaviour.
  3. Disruption provides opportunity; revisit brand value and differentiation.
  4. Think outside your physical brand experience. E-commerce acceleration plan: product mix, new channels, data systems.
  5. Identify new growth opportunities: new occasions, new services.
  6. Use the slowdown to innovate.
  7. Maximize the value and power of existing customers.
  8. Have a long-term brand/ portfolio plan centered on changed consumer behaviour.
  9. Redesign/optimize your go to market plan: consider product mix, geography, sales channels and customer segment focus.
  10. Be ready for the After. Agility is a must. 

Making brands matter, every step of the way

Right now, as markets brace for an impending slowdown, brand managers should take a more proactive and agile stance in order to win in the now, prepare for the medium-term, and transform their business to secure long-term growth.

Recession-proofing in three stages


Short-term brand actions

In the acute phase of a crisis, there are five key brand actions marketers should focus on:

1. Create meaningful action and support

With a recession rolling in, people’s attitudes and consumption behaviors change – as a brand this is a moment to recognize, connect, engage and support these new changes. You should ask yourself:

  • How can my business help consumers affected by the situation?
  • How can I rethink my products or services in a way that benefits people in those times of adversity?

Recessions financially affect both consumers and companies, hence the necessity to re-allocate spend behind most topically relevant segments and SKUs. On the flip side, it is also these moments that present brands with opportunities to be creative, think outside the box and craft a timely response that resonates with existing and potential customers’ emotions. For example, KFC stood out during the crisis by positioning itself as an ally to key stakeholders. With over 9,000 stores (of which more than 30% were shut) and 450,000 employees, KFC navigated the COVID-19 outbreak in a skilful and calm manner: no staff were laid off, and at the group level, YUM China announced the launch of a special fund to provide financial support to parents and children of its employees in case of incidents. The dedication of delivery staff in lockdown areas was celebrated at a time where their daily work’s impact was felt at a much larger scale as part of a national mission to ensure economic stability. A massive shift into meal delivery was also managed, and innovation took place despite the difficult context, with KFC offering tips for safe on-site dining as well as contactless delivery services to protect both employees and consumers.

2. Support partners and associates

Beyond consumer-focused communications, it’s crucial for brands to carry out stakeholder mapping to consider the needs and concerns of all internal, external and institutional stakeholders. Alibaba for instance announced 20 measures to help businesses and merchants in China, including reducing operational costs on its platforms or providing flexible job opportunities to ensure income. The idea is to seize opportunities to create “shared value” programs, mobilizing and connecting all parties for common benefit.

3. Build meaningful utility and content

Building meaningful content to help people in crisis times is one way to sustain short-term sales whilst creating a connection with consumers in unexpected ways. During the 2008 global financial crisis, gym memberships were one of the top expenses consumers cut back on; fast-forward to 2020, and consumers also had to give up on going to the gym due to strict confinement measures. Under Armour realized that remaining healthy in difficult times was important, and shared exercise tips on their official WeChat account as an alternative.


4. Contribute with corporate responsibility initiatives that matter

Businesses should identify ways they can support affected communities in a way that aligns with their established strategic CSR agenda. H3C, a leading Chinese business in the provision of digital solutions, donated over $US 4 million of equipment for new hospitals in Wuhan and provided round-the-clock technological support for hospitals and clients in many provinces outside Hubei. Similarly, Philips showed their support by donating over $US 2 million of vital medical equipment to Wuhan and by helping to install the first CT scan in a newly built emergency field hospital. Brands that demonstrate genuine solidarity in adverse economic times will reap long-lasting benefits.

5. Add cheer and positivity to people’s lives as they struggle with uncertainty

Brands can activate their purpose to support people in a difficult economic climate, and keep life (and livelihoods) going, by adding ‘brand-aligned’ value to people, the community, and broader nation.


During the COVID-19 outbreak, IKEA leveraged its brand promise of ‘bringing joy into the home’, DIY philosophy and creative cheeky persona to bring light relief to all those forced to spend Valentine’s day quarantined at home, or even worse, in isolation.

Mid-term brand actions

In the recovery phase, the priority is to make up for lost ground by priming momentum and leveraging shifts. Your brand actions should be centered around the following priorities:

1. Fuel brand saliency

You’ve managed to maintain sales revenues at a reasonable level in the early stages of the recession. As you enter the recovery phase, it is essential to sustain spend and earned exposure to keep brands salient in anticipation of the rebound.


2. Prime for momentum upon rebound

This is a great time to identify categories and segments that will most benefit from pent-up demand and economic stimulus and leverage CRM and social platforms to activate existing users, and turn new followers into trialists.

Whether it is during the COVID-19 outbreak or the 2008 global financial crisis, in uncertain times, many consumers try something they’ve never used before, creating an opportunity for many new sectors to convert first-time category users into loyal customers. A recent Kantar survey among Chinese consumers showed that 84% tried at least one new service for the first time during the novel coronavirus epidemic.



3. Innovate and reshape your portfolio

Crisis may provide new opportunities for disruption and ongoing competitive edge across categories. Post-recession, we often see new business and service models emerge, with the consumer at the heart of their considerations.


Stepping into 2020, Huanxi Media was faced with the prospect of empty cinemas and radically changed its film distribution by inviting digital pioneer Bytedance (owner of TikTok) to buy the rights of Chinese film ‘Lost in Russia’. The film premiered over Chinese New Year for free on Bytedance’s video platform.

Long-term brand actions

Making your brand matter on the long term in turbulent times boils down to transforming to lead in a changed landscape, or “New Normal”. In this phase, marketers should focus on the following five pillars:

1. Brand transformation
  • Re-evaluate brand positioning, proposition and portfolio priorities for accelerated growth in new landscape/segments.
  • Identify opportunities for first-mover edge serving future needs by creating or modifying a product/service/experience.
2. Sustainable transformation
  • Innovate to create shared value and drive impact across locally and category-relevant Sustainable Development Goal
3. CE & CX transformation
  • Re-evaluate Customer Experience for greater personalized value and responsiveness.
  • Accelerate employee experience transformation for greater personalized engagement, productivity and flexibility.
  • Leverage data and Martech to enable personalization at scale.
4. Crisis & reputation transformation
  • Implement crisis preparedness plans, including risk assessment audit, crisis response, plan and training, reputation repair plans.
  • Update stakeholder and influencer ecosystem–focus on top 100 stakeholders.
  • Revisit Public Affairs strategy and activation plans.
5. Digital transformation
  • Revisit and prioritize digital transformation goals, strategy and roadmap – Identify opportunities to accelerate digital innovation, leveraging emerging technologies for competitive (and data) edge.

While the utmost priority for every business at this time must be the well-being of employees and business continuity, strong companies will manage to turn crisis into opportunity across all time horizons. It is imperative to secure the now, make up for lost ground as the recovery kicks in, and get on the front foot to turn behaviour and consumption shifts into long-term growth opportunities. When we come through this, the world will be a different place; decide what sort of company you want to be.

The full report “Ogilvy on Making Brands Matter in Turbulent Times Beyond COVID-19” can be downloaded here.

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Read more articles from the WARC Guide to Marketing in the COVID-19 recession.