Serviceplan Group

Be True To Yourself Throughout The Brand Experience

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How do you empower a premium brand for the post-COVID world? And what are the challenges that lie ahead with regard to changing consumer behaviour and preferences? De’Longhi Global CMO Fabrizio Campanella on the right combination of short-term activity and long-term aspects, the art of successful international campaign coordination and the power of emotions.

MATTHIAS BRÜLL: How did De’Longhi manage to navigate through 2020?

FABRIZIO CAMPANELLA: At the beginning it was very important to keep calm. Of course the COVID-19 pandemic required us to take action and change some of the ways we operate, but not to change everything. We always try to keep a long-term perspective, so we decided not to change certain things like our media or marketing investments. Yes, the short-term environment was very challenging, very unpredictable, but we thought both investments were important in the long term. That was our approach in 2020 and it still is in 2021 – to find the right combination of short-term activity and long-term outlook.

Has the fact that people were forced to stay at home had a positive impact on your business?

FC: For many of the categories we are in, the pandemic has had a positive impact because of people spending a lot more time at home. However, this merely accelerated trends that had already emerged prior to COVID. The coffee market was booming before; the coronavirus only accelerated that. We have benefited from the fact that many consumers are used to drinking certain types of coffee specialities that are probably more espresso-oriented when they are out of their homes – but that is not the coffee they drink in their own four walls. At home they might be okay with a simpler, more traditional way of preparing coffee. People not being able to enjoy the out-of-home coffee experience during lockdown is what accelerated the trend for the same kind of coffee at home.

You even increased your marketing investments in 2021. What are the main aspects of this and why?

FC: It’s true that we are increasing our media investment, especially in the second half of the year, but this is a longterm commitment. There are still a lot of countries where we don’t yet have top-of-mind awareness. Not in Germany, of course, but our products are still niche in other countries, so we need to build categories and a loyal consumer base. And it takes time to do that.

You have been working with a global ambassador since the summer. Why is Brad Pitt the right fit for your brand?

FC: If you look at Brad’s awareness, he is the number one across regions from the US to Asia and also across consumer segments. And we were looking for an ambassador who was also strong in terms of their values. I think Brad is a perfect fit for our brand DNA because, like us, he sets great store by quality. He is also very focused on design, which will also become even more important for us in the future.

The campaign with Brad Pitt is your first real global campaign. Why did you wait until 2021?

FC: I think the conditions are right now. We have strong products and the right level of investments and have expanded all markets above a certain threshold, which really allows us to bring them all together on the same communication platform.

Are the markets happy with the campaign and will you stick to that consistency in your communication?

FC: It was relatively easy once the markets were on board. They saw the opportunity with the global ambassador and understood that it wasn’t possible to run this thing independently and that to maximise your opportunity you had to have a coordinated approach. I prefer to talk about coordination rather than centralisation because there’s always a balance. There are things that need to be done and executed locally and decided locally, but in a coordinated framework. We decided to go live on 2 September. That was coordinated. The format of the launch events was somehow consistent, but local markets had the freedom to organise a specific format according to their market reality and business reality. So it’s always a combination of the two. And that’s why I think it’s also the path to take in the future.

Are retail supply chains having an impact for you? Is that posing a problem?

FC: The retail environment has been disrupted in the last few months. So of course there are big swings between one chain or another, online and offline. This was one of the most challenging factors for us: managing the business and adapting to the changing environment. There are some distribution channels that were very relevant in the past but are less relevant today. We have an online explosion in countries like the UK, where 90% of our business is now online. This is a fundamental change to our supply chain because it’s a completely different way of working.

De’Longhi’s brand positioning has been driven by a strong focus on design and technological leadership, the objective of matching people’s needs at home. So people-centricity seems to be a crucial driver of your business. How is that reflected in your organisation and daily work?

FC: Design is important for us, as is technological innovation. We are a company that is very focused on technical improvement, technical innovation and technical excellence in our products. But it is also important – and this is something I am personally pushing – to consider the emotional aspect, which is about consumer-centricity. Yes, consumers need better products from a technology standpoint, but they also need to have a good emotional experience. This is something that now features prominently in our conversations on the marketing side, and the evolution of the product portfolio will also go in that direction.

Is the physical point of sale still the place where you provide your consumer with the full brand experience or have most of them already switched to the digital experience?

FC: Of course the digital experience is becoming fundamental. But I also think that the physical touchpoints will remain important. They will change and the reason for their importance will change too. So these days it is probably less about distribution and more about the experience. But at the end of the day, if you really want to buy a fully automatic coffee or espresso machine for the first time, you need to taste the espresso. That is something you cannot do digitally. Just imagine countries like China: as a market, China is further ahead in terms of digital channels. Everything is digital in China, but if you need to convince the Chinese consumer to buy an espresso machine for the first time, I assume they will need to taste the espresso in the stores first. The whole experience aspect is something that will remain fundamental.

What is your strategy for providing your target audience with the best brand experience?

FC: There are probably three things that are key for me. One is consistency. Be consistent and true to yourself throughout the brand experience. Being relevant is also important – talking to your customers based on what they really need and focusing on the emotional benefits of your brand and your product. So if you’re consistent, if you’re relevant and if you’re warm, you will have all the elements in place to offer the best brand experience.

This article first appeared in TWELVE, Serviceplan Group’s magazine for brands, media and communication. You can read more exciting articles, essays and interviews by and with prominent guest authors and renowned experts in the eighth issue under the central theme “A Human-driven Future: How People Shape the Digital Tomorrow. Click here to access the e-paper.

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Madison Rhyner

Roaring Recovery – Luxury Segment on Historic Growth Trajectory, Driven by E-Commerce

luxury-market

Following a sharp drop in sales in 2020 due to the pandemic, the personal luxury goods segment experienced a V shaped recovery in 2021 and is now set on a historic growth trajectory – forecasted at 29% YOY for 2022 (Bain & Company). The recovery has been driven primarily by domestic spending in the US and China as Covid-19 continues to curtail international travel, as well as increased adoption of online channels – a trend that was well underway pre-pandemic. The following trends outline the forces shaping the luxury market in 2022.  

E-Commerce is fueling the recovery.  

In a category that previously relied almost exclusively on brick-and-mortar sales for high-price items, consumer behavior is increasingly shifting online. According to Bain & Company, online sales jumped 50% between 2019 and 2020 and were up an additional 27% in 2021 thanks to increased adoption during Covid-19. Important for marketers to note, brand-controlled websites experienced the lions’ share of growth and now account for 40% of the online segment (up from 33% from in 2019). From an investment perspective, the top Luxury retail brands have shifted media dollars in mass from traditional to digital and social channels apart from Hermès – who keeps tight distribution and exclusivity at the core of their brand strategy (Kantar).  

Brands are investing in personalization of both product and experience. 

Covid-19 has massively disrupted consumer purchasing behavior, leading them rethink how they shop and the value they expect to receive – specifically as it comes to personalization and ease. Luxury companies are now using data analytics to measure and predict what consumers want and are developing automated production capabilities to provide it. This trend towards “mass-customization” extends to the overall shopping experience, with brands providing personalized product recommendations to shoppers in-store, as well as unique customer journeys online. AI-powered chatbots are another burgeoning trend that allow for immediate, one-to-one customer service (Bain & Company). This shift is providing marketers an opportunity to rethink their approach and provide a more effective consumer strategy.  

Metaverse mindset – luxury brands are playing in the virtual world.  

In the frontier of the metaverse, a network of shared virtual worlds that users can access through a variety of platforms and devices, a new marketplace for digital luxury goods has emerged. Luxury brands are quickly capitalizing on the opportunity to sell virtual product to outfit users’ avatars, along with exclusive and collectable NFTs (non-fungible tokens). Gucci, Burberry, Balenciaga, and Dolce & Gabbana are just a few of the luxury players already extending promotional activity into the virtual world. As the metaverse becomes more mainstream, now is the time for brands to begin thinking about taking steps into this new arena that align with their brand offering.  

It’s time to walk to the walk when it comes to sustainability. 

Consumers expect more from brands than ever before, and now actively seek out those that align with their personal values. According to YouGov data, nearly a third of luxury consumers prefer to shop brands that put sustainability first. To meet expectations, luxury brands must develop an authentic voice on social issues and begin investing in sustainability across their supply chains that allow for real accountability and transparency.  

Social shopping must be seamless. 

With consumer dollars shifting online in mass, having a frictionless social shopping experience is non-negotiable. According to Forbes, the average online shopping cart abandonment rate is 70%, with 49% of consumers citing extra costs at checkout as the main reason for abandonment. 87% of online shoppers will abandon their carts if checkout is complex, and 55% will abandon the retailer completely. Brands must invest heavily in a seamless social shopping experience and one-click checkout options, or risk losing sales to retail brands that get the experience right. 

Brands leaning into these trends are a driving force as the personal luxury goods category as it has experienced a huge resurgence following pandemic lows. The surge is being driven by young, digital savvy consumers that have an appetite for immediate, seamless, and personalized experiences. They want to shop when, and where it’s convenient for them – and that is increasingly in growing online channels. While the demand on brands to be flexible and fast-moving has never been greater, neither has the opportunity.  

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Mediaplus Group

So, what is a Unit Director Video Consulting doing?

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When it comes to video advertising for our clients, no detail is left to chance.

In our new round of Jobtitles Bingo Bernadette Pa, Unit Director Video Consultant for Mediaplus, tells us why her job is so exciting and various, she talks about the challenges she faces in her day-to-day job and how she brings successfully together family and career.

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Serviceplan Middle East

The Future of Brick & Mortar Stores

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By Pooja Suvarna, Digital Marketing Manager at Serviceplan Group Middle

The growth in e-commerce in the recent two years has been exponential, we have seen the Pandemic as a wake-up call for many brands to speed up their e-commerce plans and activate their digital stores to ensure that they do not miss out on the opportunity of selling their products when the world went into lockdown. This is clear with double digit growth in e-commerce volume in our region according to multiple sources and expected to become a $50bn market by 2025 in GCC ($17.7bn in 2019. Stated in a report by Kearney Middle East notes).

Following this growth, many have started speculating about the role of Brick & Mortar stores, and even considering setting a date as to when the digital stores will completely take over. The online sales in e-commerce business are expected to increase by 14.8% every year whereas the offline stores will only increase by 1.9%. So, does this mean that physical stores are going to disappear?

There is no straight answer to this question, and with our experience in the digital sphere we can say that brick and mortar will continue to play a major role in the foreseeable future. However, the changes on the consumer behaviour imposed by the Pandemic will continue to impact the means of communicating with our consumer and their requirements in terms of store experience.

It is clear that in our region, digital penetration and usage is amongst the highest globally, and although many marketers focus their efforts on conversions when looking at digital channels, they should still consider the top of the funnel as a major role of such channels to help drive awareness about brick-and-mortar stores and eventually drive footfall. Though, with a channel that has been always understood to be highly targeted and very minimal wastage, we will have to rethink how we approach awareness when our objective is driving footfall. We can still use the traditional channels with hyper location targeting to ensure the messages are geo-fenced to the specific stores and this applies whether the retailer is a small or large one.

 On the other hand, brands must ensure that they create in-store experience that can compete with the online experience and eventually retain the footfall to the stores. These experiences can start with the human element with staff engaging the shoppers all the way to unique moments in the stores that will enhance the overall experience. Give-aways gift/vouchers with purchases can be another way of attracting the customers to visit the store and shop in stores. Direct checkout without long queue can be an option too to enhance the user experience further.

 Many retailers have started using in-store technology to attract users by introducing things like Augmented Reality overlay to see product reviews, discounts, features etc. which will entice and empower the shoppers to make a purchase decision. Shop and collect options can also be one way to bringing the user to the store which might also lead to additional shopping in the stores, this way the e-commerce business can also play a vital role in supporting the retail business.

Brick and Mortar stores will continue to be an important channel of sales, but innovation and technology will play a vital role for it to continue to excite people and engage them more while shopping in stores. Any retailer either big or small will have to embrace the change and start looking for ways to keep the engagement with their customers.

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Serviceplan Group

So, what is a Unit Director Client Consultant doing?

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Understanding the customer – wouldn’t we all like that? Nico Blößl has a few tips to share. As Unit Director Client Consulting & Planning at Mediaplus, he not only manages the communication issues of our clients, but also helps them get their messages to the right people in the right way, at the right time.

So, have fun with a new round of Jobtitles Bingo!

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Serviceplan Group

So, what is a Digital Media Consultant doing?

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Our colleague Alicia Fricke gives us some exiting insights into the world of the Digital Media Consultant, the job profile combines curiosity, analytical thinking, creativity and sociability.

Read more
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Serviceplan Group

So, what are New Business and Marketing Managers doing?

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Job profiles at Serviceplan Group

Who does new client acquisition for Mediaplus? And what exactly do our colleagues when it comes to acquiring new clients? Susanne Kiefl and Larissa Staadtlich provide us with interesting insights into their jobs as New Business & Marketing Managers and tell us how their day-to-day work resembles a barraquito.

Check out our new episode of Jobtitles Bingo and learn more about the exciting day-to-day life as a New Business & Marketing Manager at Mediaplus.

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Madison Rhyner

The New Arena: Facebook makes a play for the gamer audience

Media insights on the launch of Facebook gaming

BY MODCO MEDIAPLUS

In a move to take on Amazon’s Twitch and Google’s YouTube, Facebook launched their own dedicated mobile app “Facebook Gaming” where users can create and stream live gameplay. The app is already available on Android and will soon be available on iOS. We consulted our gaming team for some insights on how this will play out for brands on the platform. 

Facebook lowers the entry barrier with significantly cheaper CPMs

For advertisers, the app will have appeal thanks to Facebook’s integrated audience data, dynamic optimizations, and ease of delivery through their self-managed ad platform. Where Twitch provides premium content against a highly-qualified audience, Facebook lowers the entry barrier with significantly cheaper CPMs. Facebook’s strong performance metrics for video content will also help drive higher view times and completion rates compared to standard in-feed placements. Because Facebook Gaming is app only, Facebook can guarantee 100 percent share of attention on that device and higher ad viewability, whereas Twitch and YouTube have to contend with divided attention and free browsing on desktop.

Advertising opportunities

Gaming is huge, and it’s only getting bigger. It certainly makes sense for the tech giant to double down on gaming-related efforts and move up this launch to take advantage of increased time spent at home. With a captive audience, now is the perfect time for advertisers to test and learn on a new platform.

Article BY MADISON RHYNER AND KEVIN RENWICK

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Wolfgang Bscheid

When the browser becomes the boss

In a future cookie-free advertising landscape, browsers and operating systems will become the gatekeepers of digital marketing. This has serious consequences – much more serious than most people are aware of so far.

Who will decide in the future what advertising we see in the digital universe and when – a few gatekeepers? Or do we want to keep market access more open in the democratic or market economy sense? We are currently facing important questions and setting the course. These conversations will probably have a major impact on digital marketing in the next two decades. And most of us may only have an inkling of what’s in store for them.

How did we actually get into the current situation? The short summary: Too much blingbling on the websites, too many trackers and a too high nerve factor of the buy-me-retargeting. Maybe we as an industry simply overdid it a bit. In response, users have installed adblockers and the legislator has reacted with the DSGVO. The politicians meant well but did it badly! Because now our European or German data protection is absurdly leading to the fact that we are promoting global data oligopolies. These massively restrict our scope for action and our economic opportunities. The fact that “A world without cookies is already a first good step”- as Jürgen Scharrer recently commented in Horizont – I personally consider to be a very naive view. The opposite could be the case: “Cookies out” means “GAFAs before”! The loss of cookies strengthens data oligopolies, maybe even a data monopoly.

On the way to a data oligopoly: Few drilling platforms with exclusive rights

If data is the new oil, then – if we are not careful – a few large US digital “oil companies” will own the sources in the future. With only a few rigs, but very exclusive production rights. I think many in Germany and Europe have not yet really understood the true dimension of this upheaval. Google, in particular, has been very clever strategically in this game.

In the first stage, the attention of regulators was focused solely on the “evil” third-party-cookie. Log-Ins, which contain much more extensive rights to data that can be perfectly linked together across devices, were left out.

Stage 2 presents a solution to a problem that only arose in stage 1: the current DSGVO reality with its content solutions is far too complex and lacking in transparency, both for users and companies. The perfect starting point for Google: Because now in the second step – as the saviour on the white horse – Google is approaching with its initiative of the “Privacy Sandbox”.

And from both a technical and organizational point of view, this is a very interesting approach: a central office that collects and manages all data. An end to the completely confusing sea of service providers who are involved in every opt-in process and who, in the end, can no longer be really controlled. And thanks to Google there is already a suitable infrastructure. The browser or the operating system for mobile use. We are told that the digital advertising world would become simple and controllable again.

But we shouldn’t fall too quickly into the convenience trap. If the market only uses the Google solution just because it is simple, faster and apparently easier, it could permanently block the free path to data. And with it, all opportunities in the future to set up and implement their own business models linked to more extensive data. 

The question of what comes after cookies is so fundamental because under the guise of data protection, a new technical infrastructure is to be created that will shift the usual balance of power in the World Wide Web even further to our disadvantage. In a third-part cookie-free Internet, browsers and operating systems become the central gatekeepers. This changes the nature of the web. In the future, few gatekeepers want to decide what kind of data is available to advertisers, agencies and publishers. And thus, also who can refinance themselves to what extent.

The Black Box decides which data we are allowed to work with

The browser becomes a black box. Everything that is important in terms of data and information for meaningful targeting is measured and generated behind closed doors. If one reads Google’s statements more closely, it seems to lead to a situation that we already know in principle from the video portal YouTube among others. Advertisers learn whether they reach their target groups. But in the future, they will no longer be able to track and verify the results themselves. Only YouTube collects the performance data as well. Control? Hardly possible. What was once an open system based on the division of labour, is now a centrally controlled Internet with a completely different character. In this system, one person in particular learns and optimizes: the gatekeeper. This makes it extremely difficult for us as media agencies to externally monitor performance and adapt existing strategies. Creative in-house developments are no longer worthwhile because the gatekeeper decides which set of data is made available.

Of course, you can accept this attractive offer from Google. One should only be well aware of the possible consequences. Because afterwards, nobody should claim they didn’t know.

The Internet is just the beginning, mobile follows and TV is coming soon

Online the weights have already shifted. That’s just the beginning, because in today’s digital ecosystem, everything is connected to everything else.

The largest browser, for example (Chrome), belongs to the globally dominant advertising network Google. And Google also provides the dominant mobile operating system – Android. From this perspective, the oligopoly of browsers mentioned at the beginning quickly becomes a duopoly of operating systems with a rather small player (Apple with iOS) and an overpowering player (Google, for example, has a 76 percent market share in Germany with Android). And it will by no means remain with desktop, laptop and smartphone. This expansion of operating systems will have consequences for advertising on all screens, especially television. As a result Google, a company with a market share of around 80 percent in the western world, would dominate the two largest advertising media worldwide because it controls its revenue processes.

The discussion about cookies, browsers and operating systems is therefore not only an issue for the Internet in the narrower sense, but ultimately affects our entire media and advertising landscape. It is also a cultural debate. Perhaps even the most fundamental one we are currently conducting. It is about refinancing the content that is the basis of our democratic society. Do we regard the Internet as a public space, with the possibility of participation by many citizens and companies? Or is it becoming a purely economic infrastructure dominated by one or a few US corporations?

It is high time that we in Germany and Europe intensify this debate. We Germans, in particular, sometimes tend to lose ourselves in debates about the industry that are too small-scale. It is time to think bigger together and develop serious alternatives!

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Andrea Malgara

The Media Agency of the Future

There has been a lot of talk in recent years about the topic of media agencies and how they have to develop and position themselves. The answer is basically simple: The media agency of the future is a media agency – not a management consultancy, not a technology start-up and not a creative digital agency. Although all these related disciplines have been trying to penetrate the domain of media experts for years, this has not been crowned with lasting success yet.

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