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Brandwave-logo-6.png |Business Unusual | may '20
15.05.2020
​There is no doubt that the Covid-19 pandemic took the whole world by surprise. Besides Bill Gates and very few futurists, not a single government have predicted such scenario where millions of people will be hit and consequently a global economic meltdown will bring businesses down and unemployment up. While this crisis will have to end better sooner than later, it will leave its marks and some deep scars on the society namely how we work, socialize, trade and entertain.
Focusing on the economic and business side of the equation, would we say that all sectors are being equally affected? Obviously not. Restaurants, hotels, fashion retail and movie theaters are hit hardest. Meanwhile, F&B, Pharmacies, movie streaming (Netflix), online communication platforms (Zoom, MSMeet,..) and last mile delivery to name a few are flourishing. Taking a closer granular look on this thriving segment, we realize that in reality, only brands and companies who built a multi-channel strategy (store, online, click-&-collect, mobile, call center,..) early-on with efficient logistic and seamless delivery process, are the true share winners (growing bigger that their industry average). More interesting is that most of those locals are nimble & relatively small-size companies like totters, Yala grocery stores and other new fast mushrooming players.

The question that comes to mind is: "Why for instance major retailers the like of BHV, ABC, or Aishti to name few, who all basically have the scale & resources to build multi-channel offerings have missed the train? with dire consequences on their revenues, financial health, staff moral, salaries cut, lay-offs and so on.

The answer can very complex like the well-known 'innovator's dilemma' principle that states: Under normal or growth conditions, moving resources to build new uncertain offering will take away from generating more revenues in existing ones. Thus by refraining to invest in emerging products, they left the entire floor open for new players to fill the gap and gradually take on their customers,

But in Lebanon, the most likely answer is yet simpler. They all adopted the old-time famous business inertia:"If it ain't broken, don't fix it."

In other words, why bother to invest in new channels as long as they can have customers coming to them? why canibalize brick-&-mortar revenues by selling online? Their baseline assumption is that customers are a uniform and static entity with minor deviations and overall stable & predictable needs & behavior! We call this having a 'Fixed mindset' or a mental frame of mind that beleive that things are set and no effort can change them.

But then why elsewhere retailers and even the same brands they carry have all provided customers with multi-channel options in most markets despite their widespread geographical stores footprint? Again we often hear the conveniently simplistic answers: Lebanon has a small geography and people can easily commute to their stores. Or there is not enough demand to support alternative channels profitably.

To check, let's put some (pre-Covid-19) facts on the table :
  • According to the last available data, e-commerce generated US$ 341 million in sales in 2016, representing a 9.8% growth from 2015 (US$ 310 million).
  • The market is characterised by a general interest in cross-border trade - for both Pan-Arab and international websites - and the lack of a local general retailer giant. Ali express is one of the leading e-commerce sites in Lebanon, while Amazon only offers limited delivery, mostly of books.
  • 2.3 million people shopped online in 2016, compared to 2.1 million in 2015, which represents an annual growth rate of 9.5% (State of Payments, PayFort 2017). Younger age groups (below 30) are the most active online users (50% of internet users). Regarding income levels, mid-income category (US$ 533 to US$ 1,065) had the most active online shoppers. The top shopping categories were clothing (44% of online shoppers) and travel services (42% of online shoppers) while electronic equipment (tablet, TV) were among the least bought products (PayFort). Lebanese people tend to shop online mainly for three reasons: competitive prices, group offers and exclusive products.

In other words, Lebanese consumers have spent abroad multi-millions $ amounts for things & reasons that could have been easily provided by any enlightened retailer or company. That would also have limited the foreign trade balance deficit at times where hard currency is literally hard to find. We call it having a 'Growth mindset' meaning having the willingness to change status-quo by exploring and opening up to new realities

Back to today with Covid-19 putting its toll on personal revenues, the conventional wisdom might say: "who wants to buy clothes or not-a-necessity items in time of crisis with purchasing power dwindling?" Here again the answer might sound simplistic: No one. Looking closer and according to 'RedPoint' a global IP protection firm recent research on impact of Covid-19 on e-commerce sales reveals different realities:
  • 58% of customers are buying more online than usual
  • 73% of respondents will further increase their online shopping compared to in-store if COVID-19 outbreak continues
  • 59% of U.S. shoppers are making more snap purchasing decisions in light of the pandemic
  • 60% would increase online shopping if they were worried about catching the virus in stores

Here's what it means in terms of some emerging opportunities:
  • The internet is quickly becoming the only place for shoppers to get what they need, whether basic necessities or gadgets to pass the time. Also in a similar category would be board games, puzzles, journals, and musical instruments.
  • Demand for office supplies has grown as more people are trying to work from home, and the same is happening with homeschooling materials.
  • Personal care products, household products, and packaged goods are at the top of the list. This makes sense, as people want to stock up on items that they regularly use or consume in daily life.
  • With more time inside, people can treat themselves to at-home spa days. Home exercise equipment may also see an increase in demand so people can stay in shape while avoiding the gym.

The big question is whether this short-term increase in online shopping will translate into long- term change. If people who are new to online shopping have positive experiences, they may continue to incorporate more ecommerce purchases into their spending habits. More so, brands need to establish a continuous insights-generating mechanism to gauge consumers sentiments, identify the 'over-served or under-served' segments of customers who can represents early wins opportunities and build a proper channel-market fit i.e. matching customers with their preferred channel. Without insight into future growth, companies will drag behind the growth trend rather than ride it from the start.

When combining Covid-19 with a structural weak economy in a downturn, moving may be the last thing on CEO's minds. As revenues slow and margins are squeezed, management switches its focus to cutting costs to maintain earnings. This being legit as survival becomes the #1 priority. Nevertheless smart re-allocation of resources and small scale agile foray into promising new adjacent offerings, prototyping of innovative business models and multi-channels delivery to meet the customer where he is right now (in home) may be an equally important salvation act by generating new revenue streams for the company. Worth mentioning that it will also allow them to re-allocate their idle or unemployed human capital into fulfilling new functions mandated by new model and re-skilling them towrads future business needs and standards.

What should not be an option is inertia which can quickly deplete value for shareholders and even bring the company to a near-death experience ( remember Kodak, Nokia,..). Here lies an important difference between winners and losers. While big gains require big choices (most of share-gain winners had a distinctive business-model with multi-channel advantage), you don’t have to do much to qualify as a loser. Adopting a passive posture may well be enough and the market and everybody will notice it soon enough.

In summary, the Corona crisis just confirmed the famous Darwinian 'Survival of the fittest' theory. Brands that invested in multi-channel delivery & logistic are reaping the greatest rewards while those who adopted a 'Build it & they will come' or a 'wait & see' old fashioned approach have simply ceased to engage with their customers and are completely shut-down proving that nowadays either you are multi-channel or you simply are not existent.


Should you want to have a conversation about this topic & more, do email me at joe.ayoub@brand-cell.com.
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15.05.2020
As governments make significant interventions in response to the coronavirus, businesses are rapidly adjusting to the changing needs of their people, their customers and suppliers, while navigating the financial and operational challenges.

With every industry, function and geography affected, the amount of potential change to think through can be daunting. We are here to help.

On this page you will find expert perspectives from our leaders that provide insight paired with tangible actions your organization can take to turn massive complexity into meaningful change.
Impact on Systems

COVID-19 is pushing companies to rapidly operate in new ways, and systems resilience is being tested as never before. As businesses juggle a range of new systems priorities and challenges― business continuity risks, sudden changes in volume, real-time decision-making, workforce productivity, security risks―leaders must act quickly to address immediate systems resilience issues and lay a foundation for the future. Leaders in the chemicals industry, for example, are recognizing resilience as a key success factor.


Impact on Experience

The global COVID-19 pandemic has forever changed our experiences―as customers, employees, citizens, humans―and our attitudes and behaviors are changing as a result. Once the immediate threat of the virus has passed, what will have changed in the way we think and behave, and how will that affect the way we design, communicate, build and run the experiences that people need and want?

The answers to these questions will be revealed in the ways people and businesses react and find innovative ways to rise above these challenging times. In consumer goods, this crisis is fundamentally changing how and what consumers buy and is accelerating immense structural changes in the industry, for example.


Impact on Operations

Business process functions across most industries are severely disrupted due to the immense pressure of the pandemic crisis. For many multinationals, complex and business-critical services that are handled by global operations must be reassessed and restructured. Organizations must respond rapidly to maintain continuity and to de-risk their operations to serve their businesses now, and in the future.

Adopting a distributed global services model can help large organizations across industries—from oil and gas to communications and media—to diffuse enterprise risk. And automating routine tasks with human+machine models, where everyone is a knowledge worker, can also help to serve businesses now, and to position them for growth post-COVID-19.


Impact on Commerce

While Direct-to-Consumer and B2B organizations scramble to meet immediate and emergency needs, the Coronavirus pandemic has activated a new wave of commerce innovation. New buying behaviors are forming that are likely to remain after the crisis has passed – and this presents opportunities. Those who viewed digital commerce as a secondary channel, now need to reprioritize their business with a digital commerce focus. For example, retailers are rallying to provide “contactless” delivery and curb-side pick-up services for consumers.


Impact on Customers

The impact of the coronavirus outbreak requires companies to move at an unprecedented speed and that means re-evaluating how contact centers are leveraged, how employees deliver relevant customer experiences, where they work, and how digital channels can be used to support the increase in contact center volume.

During this time, leaders that can shift to new ways of working help to reduce potential revenue loss, forge new levels of trust with their workforce, and position their businesses for renewed growth once the pandemic subsides. Consider banking, for example, where social distancing restrictions will push customers toward digital channels for service and increase the need for a connected, responsive team.


Impact on Supply Chain

Now more than ever, the supply chain is critical. Companies need to supply goods and services quickly, safely and securely—especially to those at risk of infection or who are working at the frontline of the medical response, such as life sciences companies developing COVID-19 tests and treatments. While meeting this unprecedented demand, companies have a responsibility to protect the health and welfare of their employees, their supply chain workers, and the wider communities they operate in, while maintaining the required flow of products and materials.

Companies need to develop a rapid response to address the current disruptions and strengthen operations in preparation for future value chain risks. 


Impact on Leadership

The greatest immediate impact of the COVID-19 outbreak is on people. Organizations are focused on caring for their workforces while rapidly managing the shift to new patterns of work.

At this critical time, leaders must see through these changes in ways that gain and maintain the trust of their people. That trust depends on leaders demonstrating their care for individuals as well as the wider workforce and community. It means sharing a clear plan and transparently showing how decisions are made. And it requires leadership teams who can proactively respond rather than react, anticipating their people’s changing needs. This is particularly important in Public Service organizations, where leadership needs to calm markets and reassure citizens, businesses, government employees and community stakeholders.


Impact on the Workplace

Key initial impacts of COVID-19 are the need to manage an immediate shift to remote working, along with preparing for higher rates of sick leave. These evolving challenges can be addressed by creating an Elastic Digital Workplace. Implementations will differ for each organization, but they should be based on the following foundations: to protect and empower your people, serve your customers, core needs, and to establish business continuity. For example, the now critical need for virtual care messaging and visits in healthcare.
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Collaboration with the Cedars restructuring project
Brandcell is happy to announce its collaboration with the Cedars restructuring project financed by FFA, bringing Strategy and Innovation advisory to an iconic F&B Lebanese Group.
15.05.2020
No one saw it coming, which can be said for any crisis. It’s in times like these that a brand’s true self is exposed. A brand’s core values come to light instantly; as a reflex. For the brands that have a solid foundation in how they treat their customers and employees, it is easier (not easy). For the brands that are posers, retrofitting their values stance is extremely difficult, if not impossible, to come across as believable.
Over the past few weeks, we’ve seen brands and businesses step up in a variety of ways, but each effort aligns with a set of core values that guide a huge segment of our country. I’ve been impressed with how brands have leaned into faith, community and family as this crisis has unfolded. 

From marketing messaging and philanthropic actions to business operations and product innovation, the good brands have redistributed their resources to promote unity when we’re socially distanced. 

Here are nine brands that are doing a phenomenal job:

KFC: The brand is part of YUM Brands, whose CEO, David Gibbs, funneled his salary for the rest of the year into employee bonuses and a fund for COVID-19 relief. At a more local level, KFC donated $400,000 to Blessings in a Backpack, which provides meals to children when they’re away from school, to help the nonprofit with increased demand from school closures. With 1,092 program locations across 45 states, Blessings in a Backpack has direct impact in cities across the country, with seventy-eight percent of kids saying the program makes them feel cared for by their community. In addition, KFC corporate has delivered 1 million pieces of chicken to its franchises to give away as a part of local food drives, especially for first responders. 


Perdue Chicken: As the fourth largest producer of chicken in the United States, Perdue Chicken, employees of plants in Milford, Delaware and Perry, Georgia have recently been exposed to the virus, and the company has implemented appropriate protocol. To show appreciation for the people continuing to power the plants, company Chairman, Jim Perdue, shared two videos on social media, which became T.V. ads. Shot as a selfie, the videos included a heartfelt message from him thanking “the people who feed America” during challenging times. The spots from the company founded by the outwardly religious, Arthur Perdue, were titled “We Thank You” and “A Time Like This,” with the latter headline evoking a message of faith. 


Ford Motor Company: On their journey to become the “world’s most-trusted company,” Ford has made some great moves in response to COVID-19. Putting competition aside, Ford and GE Healthcare joined forces with 3M to assist in the production of health equipment including respirators for those who are having trouble breathing due to the coronavirus. Being sensitive to the fallout from the pandemic, Ford is also shifting its focus away from selling to new customers and towards relieving stress of current customers. The company stopped running ads promoting its Escape and Explorer models and replaced them with informational spots about a car payment relief program that gives customers respite from their monthly expenses. Both moves are consistent with the company’s response to global and national events in the past. During the world wars, the company led manufacturing efforts and built tanks and planes. In response to natural disasters, Ford has offered relief in the form of similar programs that it’s extending to customers now.  


Nike: From nearly every angle, Nike is attacking COVID-19 through community. Headquartered in Oregon, one of the states hit first and hardest by the virus, Nike is showering organizations in the area with donations. They’ve committed millions in funding to Oregon Food Bank, the Oregon Community Recovery Fund and Oregon Health & Science University. The brand also switched up its advertising angle. The brand that equips customers with apparel and other products to get active outside encourages viewers in a new ad campaign to play inside not just for themselves, but for the world. Social posts tapped into customer attitudes of fame and recognition for being the best in their field. One graphic in particular read: “If you’ve ever dreamed of playing for millions around the world, now is your chance.” Influential sports figures including Pete Alonso, Cristiano Ronaldo, Tiger Woods, and Michael Jordan echoed the statement through their social platforms, infiltrating a conglomerate of communities with the message. In another notable community-oriented deed, Nike is giving free access to premium training programs through its Nike Training Club app. 


Mattel: Mattel has an impressive catalog of content from its suite of brands which includes Barbie, American Girl, Fisher-Price, and Thomas & Friends. Through cross-collaboration, the toy manufacturer organized the Mattel Playroom, an online resource chock full of free activities and entertainment for kids. The playroom enriches the lives of children and parents, providing a welcome distraction during a time of uncertainty. Companies like Mattel are translating their missions for the current situation. “Our mission to inspire, entertain and develop children through play is more important than ever,” Richard Dickson, President and COO, Mattel said. 


Spectrum: Imagine that you’ve been ordered to work from home and that your children can no longer attend school, but all of you still have tasks to complete and you don’t have reliable internet. That’s the reality for many people across the country right now. Spectrum has decided to offer families with students in K-12 free internet services for two months. This is a huge sign of goodwill that empowers families during this difficult time. The company is enabling parents to provide for their children and students to continue their education outside of the physical classroom. 


Scholastic: The publishing company presented an opportunity for families to get back to the centuries-old tradition of story time in a modernized format via social media. Its #OperationStoryTime campaign enlisted the help of authors and celebrities who shared videos of themselves reading books with the intent that children would listen in. It’s great to see a company utilizing its resources and networks to build points of connection back into the family unit where it may have been lost in the shuffle of our previously hurried lives. 


Einstein Bros. Bagels: This food chain is taking a micro and macro approach to supporting people who are struggling to access food or balance new stressors during mealtimes. On the macro level, Einstein Bros. Bagels is helping families streamline meal prep with takeout Family Meals designed to feed several people and to make meals a chance to gather and enjoy positive conversation. Locally, however, the company is supporting food banks, fire stations, police departments, and schools by donating 13 bagels for every Baker’s Dozen Box that guests purchase. 


Little Caesars: The company is donating 1 million pizzas to hospitals and first responders across the country in addition to the Pie it Forward initiative where customers can donate pizza. The 1 million pizza donation is made possible by Little Caesars, its independent franchisees and their locally owned stores, and Ilitch Charities. The company’s marketing department is pivoting too, putting a new spin on their product’s features. New spots highlight its pizzas’ from a health angle, showing that they’re cooked at 475 degrees and aren’t touched by a human hand from the time they come out of the oven to when they land on your kitchen table. 

After reviewing the selfless responses brands have had to the coronavirus outbreak, it’s refreshing to see marketing used outside of the process of selling a product. Brands play an important role in bringing people together through values they share with their customers. Thanks to those brands that are living their values.
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1. Delight customers with “Costovation” (innovation that cut cost)

2. Band together with other Companies

3. Keep your customers loyal

4. Spot the re-prioritized Job-to-be-done

5. Adjust to new customers habits 6. Re-think the Customer Experience




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