‘Accelerated Signalling’ & Other Key Takeaways For Consumer Brands

2019. What a LONG, interesting year. Year of TikTok? Year of the ‘Woke’? Year of an impending slowdown? Whatever it may have been for you, 2019’s definitely the year where things got a little weirder, and a whole lot more less predictable. We saw an array of consumer products launch across India. “India 1” brands felt the heat to diversify their portfolio to include products at entry level pricing, and the need to create more reasons for customers to come back to them again. TikTok changed the narrative around how content is created and who content is created by, as the platform embraced and invested in its own exclusive set of influencers. Ikea apparently had a pretty good start to their India launch. Netflix, Amazon, Hotstar, MX Player- all embraced original programming and how! It seemed like almost everyone on Twitter (small universe) was all over Social Commerce, the definition of which changed with every subsequent tweet. No matter what product (tech/non-tech) or category, everybody seemed to be fighting harder than before to acquire, keep and re-engage with consumers that are increasingly wanting premium seeming products, at mediocre prices.

What is generation #PremiumMediocre?

Call them mass-tige, premium mediocre (coined by Venkatesh Rao), or whatever new lingo you picked up on Twitter- there’s a wave of brands that have been created across the world that check the following boxes:

> Are digital native

> Are really, REALLY well packaged (think Instagrammable restaurants, beauty brands that’ll call their lip-colours the newest Travis Scott/Diljit Dosanjh song, and apps with slick interfaces)

> Sell some promise that under-35 year olds are super into (these days, it’s #selfcare)

> I can bet you couldn’t blind-test the difference in between Brand X’s products and the next really well packaged brand selling the same category/product line

> … But, they sell (scale is arbitrary, but their community leverage is significant)

Consumers usually don’t know why they’re buying the product/service they’re buying, but they want it.

With more and more brands sprouting up that continue to check the above boxes, and a TAM (top 70MN customers in India) that isn’t growing anytime soon, what’s imperative for founders starting brands is to prioritise what battle they’re fighting for a generation that consumes ‘Premium Mediocre.’

There are 2 forces in action here:

1. The age of ensemble: Loyalty’s becoming harder to buy or create: I don’t think the same customer has exponentially more spending power than they did 3–4 years ago; I do think they’re diversifying their choices, cutting their disposable income into a pie with thinner slices than what it was before.

Consumers are spending lesser money on more things, than spending more money on more things. That said, the more the necessity, the slimmer the margin. The more the desire, the bigger the margin.

2. The age of accelerated signalling: what used to be a car, house, fancy watch or jewellery for my parents’ generation, has now been replaced by pretty much anything that is worth posting on Instagram, TikTok or YouTube. Signalling has become a daily occurrence than one that you’d wait for in your monthly/bi-annual family catch-ups. This translates to keeping up with a consumer who wants “new” 24/7, and wants “new” better and faster than before.

There are certain categories where its easier for users to be promiscuous than monogamous. The greatest exemplification of this is in OTT (newer shows, fresher faces, diverse talent) and in Fashion (10 day catalogue cycles). Content will play a big role in delivery of “new” as a promise.

(additional reading: https://www.eugenewei.com/blog/2019/2/19/status-as-a-service)

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This leads me to what we see gaining momentum and traction over the coming year. While some of the below mentioned ‘consumer trends’ have compounded since last year; there’s others which seem to moulding into new trends for 2020 (side note: history usually always repeats itself, so what really is new?).

Everything is entertainment

I like how Haresh Chawla describes the internet viewer vs internet consumer audience. As more and more companies chase MAU and user growth, more and more founders and stakeholders should start thinking of their marketing and/or product strategy through the lens of “entertainment” (as opposed to purely functionality). While this may not apply to all categories of products, a trend we’re seeing is users look at “online” as a way to be entertained first- a customer expectation that is an outcome of OTT becoming even more omnipresent and accessible, and apps like TikTok, YouTube, Whatsapp, Instagram, PUBG becoming the first ports of interaction when users open their phones.

Gamification and entertainment won’t only be restricted to content apps. We’ve (LBB’s) done some interesting experiments around this in 2019, and I’m excited to see more and more apps and products adapt and create their own version of entertainment to drive customer engagement at the least, and transactions downstream.

Women, FINALLY

From female hygiene products to private label beauty products, 2019 seemed like the year where women as a consumer and customer base didn’t only grow, but saw recognition and acknowledgment across the board (investors, mainstream media… and a lot of male founders). On LBB, we’ve always seen women being much more open-minded to try new products and places- they share more, engage and comment more, and generally explore more than their male counterparts.

While this (women being an important and significant customer base) isn’t a new insight- FMCG companies and multi-billion dollar retail brands have clearly been at the forefront of deep-diving into what makes women click (literally and figuratively)- it’s been interesting and awesome to see the growth in women focussed brands- especially in hygiene/self-care product category and technology/retail products (Meesho, Bulbul, SimSim, TikTok influencers etc).

Embrace #GenWoke

#Sustainable #VeganLeather #BanStraws #GreenWashing #CleanBeauty, 2019 saw the emergence of a very openly woke consumer. Social media and the #armchairactivism it comes with, a fairly polarising economic and social environment, and movements like #MeToo have kicked off a wave of people who are getting increasingly comfortable with cutting through PC and saying what they really feel about issues important to them. In its worst form, this takes the shape, size and form of cancel culture; at it’s best, we’re seeing a specs of change in consumption and therefore brand positioning.

Consumers are expecting their favourite brands/founders and faces to actively take a stand on matters that matter to them. Brands can no longer afford to sit on the fence.

We’re just about scratching the surface of influencer marketing

Fun fact: Did you know, Michelle Phan “invented” being an influencer?

What Michelle Phan may have started back in 2015–16 has been legitimised as a career and a marketing strategy throughout 2019, the #peak of which was exemplified with Kylie Jenner becoming the world’s youngest self-made billionaire. Here and here is how I actually feel about influencer marketing if you’re looking to read an additional 15 minutes. TL;DR? Influencers = content marketing (not distribution) in a brand new, shiny avtaar. Therefore, a GREAT influencer is a GREAT content creator; and you know you’re working with the wrong influencer when you’re telling them what content to create.

Era of Experiences

We saw BookMyShow take the leap with building live events and experiences (seems to be panning out well as per this). OnePlus brought Katy Perry and Dua Lipa to India. Flea Markets, Pop-Ups, Food Festivals, Street Art festivals, art festivals- there’s even TikTok fan fests these days- and its iterations have become even more omnipresent. While I don’t have enough examples in hand for smaller cities and markets (if you do, please comment!), this trend has definitely got a whole lot of traction across the top 10–12 cities in India. Cadbury’s launching new chocolates through offline experiences (powered by LBB!), BodyShop spread the message of recycling through an experiential campaign (also powered by LBB #humblebrag), while brands like Bira, Vajor, Asian Paints, Zomato continued to create or power their own IPs.

As social media and content platforms grow, we see consumers wanting more stimulus to “post”; and the smarter brands are investing in or are creating unique stimuli and offline properties that enable the same.

In Summary

Keeping all of the above in mind, what is going to become critical for brands to do is pick and choose their battles. Is it price, distribution, go to market, customer segmentation- what in your execution is unique to you?

Especially with chatter and visible indicators around a slump and slowdown, brands’ 2020 plans and customer promise(s) need to be sharper than they’ve ever been.