How Retail Consumer Brands Remain Relevant in a Time of Crisis
The coronavirus pandemic is forcing consumers to rethink their purchases and brands have had to quickly pivot. As the world continues to grapple with this virus, companies who can quickly adapt and move forward have the greatest chance of survival. The most successful brands have shown rapid flexibility in pivoting their products, services, and content and communication efforts in order to maintain relevance to consumer needs.
Below I will analyze three industries within consumer that will likely face crossovers: Retail, A/VR, and gaming
- Retail Oriented Brands:
The last five years have not been easy for retailers, big or small. While many have called this era the “retail apocalypse” it is critical to consider the future of retail. I believe that once the coronavirus subsides and people emerge from their socially-distant isolation, they will seek out experiential retail stores more than ever.
Before this crisis, it was evident that experiential retail was a critical driver of success. Slow-to-evolve stores that have been resistant to change have been falling to the wayside as newer, more experiential retailers have been leading the charge. With coronavirus killing essentially all in-store retail deemed non-essential it is critical that retailers think about ways to differentiate themselves in the times ahead.
Two early pioneers in new retail concepts were Rapha and Glossier.
Rapha
Rapha, an upscale cyclewear brand, uses the idea of a store as a clubhouse. Rapha initially introduced its stores as pop-ups to prove the concept, and now has more than 20 in cities around the US, Europe, Asia and Australia. Each ‘clubhouse’ has a cafe, screens showing cycling, and organizes regular group rides, as well as functioning as a store.
Glossier
Cult beauty brand Glossier has leveraged its flagship store in New York along with pop up shops around the globe to engage the local community and create a buzz. Despite being an online player, Glossier sees offline brand activities as a key part of engaging its customer base in the form of its flagship New York and pop-up retail stores.
2. Augmented /Virtual Reality Outlook on Brand Impact :
AR/VR technology will transform brand engagement. Companies will have the tools to virtually replicate in-store shopping experiences while also providing them with personalized and informed experiences.
Examples of AR/VR in action are allowing shoppers to virtually try on products in their own space rather than in-stores. These virtual experiences help reduce the risk of disliking a product and provide greater confidence in a consumers purchase — especially when these products are new.
However, augmented experiences won’t be limited to assessing products from home. This technology can change in-store shopping dynamics by providing retail experiences that blend physical and digital environments.
Cosmetics brand Charlotte Tilbury uses smart mirrors with augmented reality to let shoppers put on different looks virtually in seconds, trying out new colors and styles.
Recent M&A Activity sparked in VR:
In recent market news, Apple has made headlines for its acquisition spree. Since early April of 2020, Apple has made more acquisitions than it has in all of 2019.
It’s most recent acquisition is rumored to be NextVR — a technology company that captures and delivers live and on-demand virtual reality experiences. According to 9to5mac.com, NextVR has over ten years of experience blending virtual reality with sports and entertainment. It currently provides VR experiences for viewing live events with headsets from big players such as PlayStation, Microsoft and Oculus.
Apple’s recent rumored acquisition leads into my next point about gaming.
3. Gaming
With the rising concern of coronavirus halting all major sporting events over the course of the next few months from March Madness, the Masters to the 2020 Olympics, it has brought attention to the realm of online gaming and eSports. These industries continue to grow with global gaming market generating $152.1 billion in revenue in 2019. Live-streaming gaming platforms like Twitch, Mixer, Caffeine, and Discord all posted their best revenue-generating month in March.
One company that I find interesting is FaZe Clan. A lifestyle brand and gaming organization based in Los Angeles.
FaZe Clan has been able to disrupt the existing definition of any one category by operating as a talent management agency, content production business,
e-commerce platform, merchandise producer and technology creator rolled into one. While the company operates across various categories its user base remains consistent and targeted.
A powerhouse in the eSports and gaming industry, FaZe has an impressive arsenal of more than 6 of the top ranked teams, 29 dedicated players, 49 content creators and 200+ million digital followers.
As FaZe continues to grow its cult-like following, it should begin to have recognition and valuation beyond traditional sports franchises. For instance, eSports organizations are able to capitalize on the universality of games and engage fanbases from across the world without having to change anything that they are already doing. This differs from traditional sports where teams primarily profit from the actual sports they play. In terms of social following — FaZe clan has 18+ million users across its social media platforms compared to the New York Yankees who total 14 million. This further highlights the global leverage eSports can have over traditional teams.
History has also proven the power of community based consumerism. Jordan came from the basketball community, OVO came from the hip-hop community, and Supreme came from the skate community — and now shines an opportunity for brands to enter the gaming community.
The community of gamers has proven that captive audiences will need products and services tailored to their tastes, and FaZe Clan has delivered on this front.
Final thoughts:
Retail is changing, and retailers need to adapt. While coronavirus has forced retailers to cut down on costs and staff, it may put them in a better position to take advantage of new innovations such as AR/VR and community focused branding to redefine what they stand for.