Brand Authenticity and Inclusivity : Future Growth Engines
An authentic brand has principles, moral values and helps us be true to ourselves. I was first made aware of the growing relevance of Brand Authenticity years ago, by a close dear friend and eminent Digital Marketing professor at NYU, Ms. Sharma. Then, the world had come out of recession and being discretionary and parsimonious with your purchases was widely accepted, possibly even seen as fashionable. Green and fair trade consumerism slowed and offerings in that space struggled as consumers bypassed expensive cause associated products and traded down to cheaper alternatives. Priuses gathered dust in showrooms, consumers spurned pricey displays of their cause credentials, also known as ‘badging’, and turned to subtle ways to support like reduce, reuse, and recycle. In my view, the downturn had such a profound impact, that it shaped the mindset of an entire cohort of consumers.
So nothing seemed further from the truth then with authenticity on the decline, however the recent events that unfolded over the last one month, namely the GameStop stock surge story, made me rethink about that conversation. To cut a long story Short (pun intended), hedge funds got trapped in a ‘Short’ squeezed which meant they had to purchase the stock they borrowed and sold to a buyer in order to return it to the lender, at a much higher price to cover their positions, further driving the price of the stock up and dragging with them others who had bet Short’. Was this too ‘Short’ an explanation? Perhaps so.
What surprised me about this is incident is power of social media at play. Individual investors on social news platform Reddit grabbed opportunities normally reserved for the big hedge fund players, leveraging trading platforms like Robinhood. This was a rally by small retail investors to spoil the game for the notorious large institutional players who are used to crashing the party for serious retail buyers. They were driven by a cause to beat the hedge funds at their own game. However Robinhood played spoilt sport and stopped trading on GameStop shares, much to the chagrin of its patrons.
What followed was the unexpected backlash Robinhood faced, with customers feeling betrayed over these trading limits and increased feeling that it was pandering to the whims of the institutional investors. They witnessed a flight of customers to other brokers and increased number of complaints about account closure. Whether there was truth in it or just a case of poor brand management only time will reveal.
This is the part that really interests me as a marketer and brought me back to the idea of “Brand Authenticity”. This is a value about brands that people hold dear to form strong endearing relationships. By being authentic, brands resonate with people’s desires to stay true to themselves. Brands help reinforce that feeling when their customers make them a part of their lives through brand adoption.
Robinhood who rose on the promise of an honest trader for the people had turned out to be the Sherriff of Nottingham and people have already started to disown the brand for its perceived alignment with the institutional investors and not staying true to its promise.
Contrast this with a brand like Dove. By authentically championing women’s empowerment and wanting to change the conversation around beauty has over the years possibly stayed true to its mission and continues to grow.
Parler, the microblogging and social networking platform doubled its users from 1.5M to 2.8M in a short space of 15 days in July 2020 for being true to freedom of speech. It is now inactive and was taken down by Big Tech as they believed it to be a platform for Right Wing supporters. Once it comes back online, they are likely to witness a surge in users as people rally around this brand for staying true to itself. Case in point, the Parlor app (spelt with an ‘O’) is already enjoying a surge of new memberships as people search for the social media platform Parler.
Tesla, the darling of the stock market in 2020, had unprecedented growth in stock price driven by the huge contribution of carbon credits it earned on its automotive sales to Automotive manufacturers who needed to offset their sales of polluting vehicles against these credits. Whether its equity will erode over time among customers who believe in sustainability will depend on its continuance to do and awareness of this sale. It will also depend on whether its customer base are true believers in sustainability or are those who want to be seen among their peers as a sustainability believer.
The world of today is a complex web of inter relationships and dependencies that impact a brands ability to stay true. From the investors, to suppliers, to governments in markets we operate in, all have divergent needs and staying true in today’s world and meeting those needs is becoming difficult, but it can also make or break a brand.
The demand for Brand Authenticity may have started with the Millennials. The surge in access to information, increased competition and offerings and their distrust of advertising have all contributed to their increase demand for brands to be relevant to their values. However, as Gen Z enter the market in a big way, this expectation is expected to be more pronounced and the demand for a brand to not only be authentic but also inclusive whereby they support diversity. Brand Inclusivity will add another layer of complexity to Brand Authenticity for brand managers of the future.
To Gen Z, the congruence of the brand’s personality with theirs will not suffice because the brands suppliers, the corporate entity, their retailers, and the governments they work with all need to be aligned. This will drive ethical sourcing and organisational structures that embrace diversity at all levels apart from the brand proposition. It will also determine the retailers they contract to bring those products to market.
It’s a new world order, a bi-polar world with accentuated emphasis on authenticity and inclusivity , which is at the forefront of the consumer’s minds and brands are increasingly getting caught out. Take the case of the Mulan controversy, with the derision of Disney for putting profit over principle, or the My Pillow CEO Tweets, that resulted in prominent retailers refusing to stock his company products. Apple recent attempts to weaken a bill aimed at preventing forced labor may create dissonance between the brand and official stance on human rights, as it attempts to maintain it key market and supply chain.
Research has found that ads that are considered progressive are 25% more effective than other others in driving adoption. P&G’s The Talk, an ad made to promote their ‘Black is Beautiful’ initiative is a great example. However there are many layers to diversity, and it goes beyond gender or skin color. It’s also about age, geography, socio-economic diversity, prejudices, commonly held stereo typical views, social issues, gender identity and expression, sexual orientation and very soon, about your political affiliations. In India, brands like Shalimar Paints, Kellogg’s, delved into issues like deep-seated prejudices, corruption, and LGBT rights through their ads, instantly connecting with audiences. The beauty space is the most exciting and fast evolving to challenge the stereotypical notions of beauty where diverse faces are being presented in a naturalistic way to represent the world, we live in.
The GameStop surge made me realize in a connected world, where dissemination of information happens at an explosive pace, brands can no longer manage the fallout from such events. The Black Lives Matter a movement in another country had a ripple effect on Unilever’s Fair & Lovely in India, an iconic brand, who is due for a name change in support of its inclusive claim.
As GenZ becomes a larger force to reckon with and the heightening of social issues and causes, the lack of Brand Authenticity and Inclusivity will lead to failure and instant fall from grace and brands need to be careful about that.