As we put 2020 behind us, it is time to pause and take a look at the big elements affecting marketing in the new year. Here are six major themes you should begin planning for in 2021.
The Conscious Consumer
Pre-pandemic, the world was in the middle of a shift from conspicuous consumption to conscious consumption. The pandemic only accelerated this arc. Here’s a case in point: the organic food market has grown 18X in a 12 year period. This has already had a major effect on more traditional brands like Kraft Heinz which had to write down $15 billion in brand equity in 2019 as consumers preferred healthier offerings. The organic trend will accelerate as more people are now focused on their health and wellbeing.
Health-focused is only part of the Conscious Consumer. Consumers have been trending towards purpose-driven and ethical brands. The trend towards sustainable, ethical, and purpose-driven will only continue in 2021. In the US alone, consumers are expected to spend $150 billion on sustainable products by the end of 2021. Expect to see packaging, messaging, and product offerings all flavored with an element of purpose.
The Professional Nomad
For a significant portion of the population, working from home will now become the standard way of life. During the pandemic, working from home also transitioned into working from anywhere. Airbnb’s within 100 miles of major cities were fully booked during lockdown, with many staying multiple weeks as a respite from the confines of the city.
Now that businesses have figured out how to have (or support?) remote workers, a new business persona is born — the Professional Nomad. This new persona wants longer stays, all-inclusive packages, business class amenities, and the joys of being on vacation when they clock out.
The travel and tourism industry has already begun preparing for the Professional Nomad with countries like Barbados and Bermuda creating new visa programs to accommodate these nomads. Ads for month-long stays have already begun percolating across social media. Expect to see the travel and tourism industry courting this new persona moving forward.
Marketing Transformation Hits Terminal Velocity
In 2020, the Salesforce State of Marketing report found marketers’ number one focus for 2020 was innovation. All brands had to pivot as a result of COVID-19 forcing a transformation timeline many had not planned on executing so soon. Brands were forced to accelerate adoption of many elements of marketing transformation.
Many brands had to embrace agile methods replacing long build cycles with a test and learn approach. This move is a core tenet of marketing transformation as agile provides brands with a method of creating better results faster. In a recent interview a Chief Experience Officer, he or she told me “We were able to shorten our time to production from 6 months down to 30 days with Agile”. Expect to see more brands embrace agile methods, as it will become a baseline method of how marketings work gets done.
Another tenet of marketing transformation is decentralized marketing. The pandemic forced many to move marketing out of the silo department and to decentralize into smaller teams focused on key moments along the customer journey. These new cross-discipline teams are leveraging agile methods to create new experiences in faster and more efficient ways. This decentralized model of marketing has allowed many brands to not only move faster, but produce better outcomes for their customers.
Significant digital investments were also made during the past year. These new tools, and capabilities were quickly implemented and leveraged creating better experiences for customers. Not only were new tools implemented, new metrics and methods were deployed alongside them to create a wave of innovation and better customer outcomes. One Chief Experience Officer interviewed created a new process and tool to aid onboarding customers. The combined efforts decreased customers’ time to value by 65%.
As we move into 2021 and beyond, these new muscles will only become stronger and provide more value over time. It will be hard to compete with brands who have transformed their marketing departments as they can move faster, produce better results, and provide better outcomes. Expect marketing transformation to be a significant focus for marketers in 2021.
Outcomes Become The New North Star For The Enterprise
Net Promoter Score has long been the measure of customer success. However, new trends are showing a significant shift to a new measure of customer success — Outcomes. Enterprise vendors have long been invested in experience, and used NPS to measure their success. While Net Promoter Score is a well-accepted metric it has a lot of issues making it ripe for disruption. Expect to see brands lessen their focus on NPS and embrace a new measure — Time To Value — in the coming year.
While experiences are critically important, they are not the customer’s actual goal. It is true that a better experience can produce better outcomes, however that doesn’t mean the customers will stay. In fact one Chief Customer Officer we interviewed stated, “We have happy customers leave all the time, and unhappy ones stay. The difference is the outcomes they receive.” Experiences are nice to have, but Outcomes are must have.
Where NPS measures the experience, Time to Value measures how quickly the outcome is achieved. TTV is objective, and opens the doors for new go to market methods such as outcome-based selling and service. Expect to see a significant shift towards Outcomes as it provides a competitive advantage. Vendors who are able to ensure the delivery of Outcomes will have a significant advantage over vendors who can only promise that Outcomes are possible.
In 2021, expect to see businesses rally around the following mantra; Experiences are the method, Outcomes the goal, and Time To Value is the metric.
The Post-Cookie Future Sparks A New Data Revolution
With third party cookies being eliminated, brands are looking for new methods of targeting and first party data is the answer. Expect to see a new world of methods and technology focused on helping brands capture and leverage first party data. This is the new data revolution.
Brands will rush to collect first party data from a variety of methods. For example, a large global beverage already has 30 different methods of collecting first party data. These include the standard loyalty programs and owned digital properties, but also extend into new territories such as dating apps, direct to consumer websites, and sponsored wifi hotspots. The company plans on expanding these programs in the coming years.
The reason first party data is the next data revolution is three-fold. One, it is easy to collect, and two, it can instantly be utilized for direct returns. Additionally the power of the first party is multi-faceted.
First party data allows brands to personalize experiences on their owned properties and can also be extended to drive omnichannel personalization within “walled gardens.”
A Walled Garden (you mentioned Walled Gardens earlier in the document — it should be defined there) is a digital property where the data created in the space can only be used to advertise within that same space. Facebook is a good example. Facebook’s ad platform allows you to leverage the deep first party data owned by Facebook to drive your advertising, but only on their ad network. Amazon is another great example.
This creates better experiences, and larger purchase orders, and increased lifetime value.
In addition to personalization first party has been shown to improve ad efficiencies. When compared to third party data, some brands have seen ads driven from first party data to be 50% more effective. A small amount of first party data can also be leveraged to model new audiences helping businesses break into new markets. Finally, the data provides a business with a real-time stream of customer data which can drive innovation forward and be easily used to create new products and offerings.
In 2021 expect to see brands begin to invest heavily in first party data collection and tools that allow brands to easily create and deploy apps as well as customer data platforms to connect the disparate data together and AI to help drive deeper insights from the data.
From Grocery Stores to Walled Gardens
As ecommerce becomes a serious business online, retailers are finding out their digital properties have a new upside as they become highly profitable ad marketplaces. Retailers have long sold shelf space, end caps, and shopping cart space to advertisers. Now with digital stores, these methods have become programmatic and brands like CVS, Best Buy, and Walgreens have all become walled gardens.
Walled Gardens are powerful for many reasons because of the data they own. In the post-cookie future, first party data becomes extremely important. Retailers also have a very specific set of data. They know who buys what, how much, and when. This data can now be leveraged to serve ads in real time at the point of purchase. Additionally those ads are displayed at point of purchase allowing for closed loop reporting to take place.
These gardens are creating a significant new revenue stream for retailers. For example, Amazon is currently the second largest ad network behind Google, and their ad network drives 13% of their total ecommerce revenue. For all these reasons we should expect to see a flood of new ad networks in 2021 that will force brands to rethink their marketing mixes.
This will likely cause a major shift for brands as they begin to focus more on performance marketing within these gardens in 2021. Also expect to see major retailers create their own ad network to attract these performance marketing dollars. 2021 is going usher in a new era in retail marketing.
The future of marketing in 2021 is flush with new consumers desires, personas, and marketing methods. Brands will have to embrace or be left behind. In 2021, expect to see many brands continuing their transformation into more nimble and agile organizations. Also expect to see many brands focused on first party data collection methods, and investing in new technologies to aid in this endeavour. Additionally look for enterprise vendors to begin rolling out new go-to-market strategies focused on Outcome-based selling, and service models. Finally we should expect to see a sizable shift away from traditional branding via mass methods, to more performance oriented marketing within walled gardens.
These six trends are only a few of the changes we can expect to see in the coming year. Below I’ve added the full Future of Marketing 2021 slide deck that will walk you through a larger and more robust look into the coming year and show you what you should expect.