The pandemic caused unexpected instability throughout physical supply chains, restrictions on movement and work had enormous implications for many business operating at a local and particularly global level. But it also forced brands and consumers to quickly adapt to what became and continues to be an increasingly digital first world ‚ÄĒ which means it‚Äôs critically important to have a strong (yet flexible) digital supply chain, too. The links in a digital supply chain need to serve the purpose of producing effective, high-value, and constantly evolving digital assets for the business, including digital infrastructure, content, community, and first-party data.
In the current climate, relying only on in-house marketers and commercial teams is an unstable approach to take, particularly when company workforces are subject to the impact of Covid-19 infections, isolation, and distancing regulations. A¬†recent report by McKinsey predicts ongoing disruptions to the global workforce in the wake of the pandemic.
Instead, brands can create stability and opportunity for growth within their online resources by diversifying the digital supply chain, and ensuring that the structures they have for creating and managing their online presence and demand generation strategies include a range of tactics.
Understanding The Value Of Digital Supply Chains
As a marketer, I‚Äôve spent a lot of time sourcing and reviewing media partners for beauty brands. In the Middle East in particular, I noticed that only a small number of companies embraced the content marketing model pre-pandemic, and the region is still slow on the uptake when compared with other global markets.
No surprises here but social media users in MEA and Latin America spend the most time on social networks compared with other populations only increasing since the pandemic, and yet my interactions with beauty brands show me that although content marketing is alive and well in the region, there‚Äôs still a void when it comes to understanding the importance of building those content and data structures that don‚Äôt just rely on a small number of creators being infinitely creative, and constantly available.
A well-built and well cared for digital supply chain provides companies with an ongoing, reliable stream of good quality content, and the means to connect directly with consumers (for example, through a managed private community) and deploy effective digital marketing strategy based on data that is collected and organized with that specific brand in mind.
To do this, international brands are beginning to think more like media companies and less like straight-up retailers. In doing so, they position themselves to capture and hold consumer attention in a landscape where attention is becoming a currency all of its own. American software developer HubSpot announced earlier this year that it had acquired The Hustle, a media company known for inspiring entrepreneurs and innovators. HubSpot pointed to its history of creating ‚Äėremarkable content‚Äô for its customers, but suggested that it had reached its limit on its own and needed to level up, by embedding a media company within its operations. Hubspot co-founder Dharmesh Shah tweeted: ‚ÄúModern media companies have a software company embedded inside. Next-gen software companies will have a media company embedded inside.‚ÄĚ
Why Should Retail Brands Act Like Media Companies?
There are two key reasons at play here. Firstly, high quality media content creates interest and demand for products ‚ÄĒ so brands that own their own media outlets, or have enough content reach on external platforms to influence a broad audience, have a lot of scope to direct trends. Secondly, brands that have access to the customer data generated by the consumption and/or reaction to their digital content can leverage that data to shape the direction of their own product strategy.
Take fashion media company Hypebeast, which operates the e-commerce platform HBX. By being a media company first, Hypebeast can publish content about products they predict will be popular, capture the data generated by that content, analyze that information and then decide whether or not to invest in those products. It‚Äôs a clean line from content to audience-driven retail, and the model helped HBX generate an estimated revenue of USD $40 million in 2020.
In the beauty industry, Glossier is perhaps the best-known example of the efficacy of a sophisticated digital supply chain ‚ÄĒ although in the beginning, it seemed to happen by accident. The cosmetics brand launched off the back of a successful beauty blog, Into The Gloss, created by Emily Weiss in 2010. The blog was already pulling over 1.5 million unique visits per month by the time Weiss started selling products through Glossier; and the brand was valued at $1.2 billion in 2019. Glossier has stayed close to its digital content roots, and the relationship between the retail brand and the blog (along with a growing toolbox of other digital tools, including an active and engaged online community) is the driving force behind its success.
Other brands have taken advantage of celebrity founders or collaborators to capitalize on the audiences of those individuals. Jessica Alba‚Äôs natural baby and beauty brand The Honest Company benefited from celebrity status to get its extensive product line noticed, and made $10 million in revenue in its first year of trading. Kylie Jenner was already a media brand in her own right before she launched her beauty company, Kylie Cosmetics ‚ÄĒ and her own face became the ultimate tool for marketing the brand‚Äôs products, along with her 254 million-strong Instagram following.
But the power of a supply chain is that it makes celebrity unnecessary. Having a big name ambassador is a nice bonus, but it‚Äôs not a must-have. When a retail brand takes on the market as a media-minded entity, its reach and impact grows exponentially ‚ÄĒ and that‚Äôs even more true in 2021 than it was before the pandemic, because as highlighted in a new report by Deloitte, the public is now more reliant on digital media as a source of entertainment, information, and connection. Of course, more people consuming content online also means the competition for readers/viewers/listeners is higher, so brands have to be at the top of their game in terms of the type of content they produce, the attractiveness of said content, and the impact that it has on audiences in a short space of time.
The Deloitte report found that watching TV and movies at home is the overall favorite form of media consumption, with 57% of survey respondents ranking it in their top three. Which could drive more retail brands to diversify their digital supply chain even more by stepping into TV production ‚ÄĒ like L‚ÄôOr√©al, which has its own seven-episode TV series called Run Le Hair Show. For Generation Z, however, TV appears to be less important. Only 10% of Gen Z ranked TV or movies at home in their top three forms of entertainment, preferring instead to play video games (26%), listen to music (14%), or engage on social platforms (12%). So brands that want to capture the attention of Gen Z ‚ÄĒ an increasingly important consumer group, as they come into their own in terms of earning capacity and purchasing potential ‚ÄĒ would do well to consider new, creative, and multi-faceted media ventures.
It goes without saying that marketing teams still need to have their finger on the pulse of all aspects of their overall strategy, and core tactics like consumer journey and lead generation remain crucial. But there‚Äôs a paradigm shift at play in the way consumers engage with companies. Increasingly, brands need to find ways to interact with consumers that don‚Äôt look or feel like advertising. Marketing has always been about relationships, but we‚Äôre hitting a pivotal moment in how those relationships work; and brands must be willing to understand their customers, communicate with them, educate them, and entertain them. A brand of the future can ensure its survival and bolster its success by thinking like a media company ‚ÄĒ because high-value media creates long-term, high-value relationships.