WANTED: Heroes for 2019 - A Case Study on Nike vs Pepsi

January 5, 2019

Courage - it's something that builds resilience and perseverance, but not without costs.  It could have been that bully, or the test you failed, or an unrequited crush, somehow you mustered up the courage to get back out there to try for another day.  Overtime, our risks become more moderated or "calculated" as it's termed in economics; we weigh if and when we should speak up, we weigh the cost of marginalization or dislikes for our honest thoughts or actions and we weigh the economic opportunity cost of our courage. 

 

It's not a mere coincidence that there are no dislike buttons on Facebook.  

 

Most of the time, what we experience everyday is private courage.  It's private to our specific situation... such as facing down a bully at school, or in the street.  Or maybe it's the courage that a single parent harnesses for that last morsel of energy to tuck their kid into bed after every bone is exhausted from a long day of work+school+dinner.  

 

What we also marvel at is public courage.  It's the courage we don't have the time or energy for, or because the personal costs maybe too high.  But we are seeing it.. now more than ever... such as in Colorado's first openly gay governor, #NotoriousRBG, or the nationwide walk-out by students to protest gun violence.  Historically, public courage has been embodied in individuals as Nelson Mandela or Rosa Parks.  Our tumultuous times call for more public courage.

 

Consumer brands worldwide are trying to tap into this public courage - to be relevant, to connect emotionally, and ultimately, to drive sales.   

 

But how do consumer brands drive sales when the consumption movement has shifted in the last several years from "non-experiential goods" to "experiential goods"?

 

One, you either create those experiences for your customers or two, you tap into their experiences, by aligning with it and amplifying it.

 

First, let's show where the consumer spending shift is happening.  Dotted lines are "experiential goods" and solid lines are "non-experiential goods".  

 

 

In aggregate, spend on experiential goods has been closing in on levels of non-experiential spend since 2010.  In 2013, experiential spend begins to overtake non-experiential spending.

 

 

"Experiential goods" are goods that are consumed with either a social or public element involved that is commonly more "shareable" on social media.  Some of these are...

 

+ restaurants / dining out

+ concerts / events / entertainment

+ travel airfare, shared transportation, public transportation

+ hobbies (e.g. camping gear, photography equipment, bikes), video gaming

 

"Non-experiential goods" are goods that are consumed mostly in your home and/or by mostly you for private consumption that is less "shareable" on social media.  Some of these are...

 

+ food at home

+ vehicles

+ apparel

+ household furniture & appliances

+ electronics video & audio

 

Propelled further by the explosion of social media in 2008 (according to Pew Research), experiential consumption - or the expenditure on shareable experiences started really closing the gap on non-experiential consumption, and eventually overtaking it in 2015.    

 

During this shift, consumer brands needed to stay relevant to "experiences", while being emotionally connected in a new gilded age of major social and political upheaval.  The natural marketing path was to tap into consumers' underlying beliefs and motivations; but this was easier said than done!

 

No matter what side of the political spectrum you fall, the deep polarization of frustration and emotion is strong.  From gender movements to teacher strikes and gun laws, the build-up of these emotions need a cathartic release.  It is sparking action, in the form of activism, marches, campaigns... and more.  Brands that use their vehicle as a means to take a stand or tap into the emotion of any movement are taking risks, but that risk needs to be genuine, or it won't succeed.

 

Some brands have succeeded and some have not, due mostly to a key ingredient ... AUTHENTICITY.

 

Let's take two great examples to understand how AUTHENTICITY & public heroism works.

 

Case #1:  Nike made $6B after its Kaepernick Ad. 

In Kaepernick's Case, he took a knee during the national anthem to protest the treatment of African Americans and was "blacklisted" by the NFL.  His kneeling cost him his career and no NFL team would hire him, even when he was a top performing quarterback.  At the same time, he was publicly branded as unpatriotic.  Nike hired him when nobody else would.  Putting their brand behind an activist, a public hero.  It was a calculated bet, because they knew their target consumer base.  At that moment, Nike became part of the protest movement; they not only aligned themselves with a public hero of a Black Lives Matter Movement; Nike themselves took the risk that their tagline was relaying.  It was authentic.

 

Case #2: Pepsi received angry backlash and had to pull its Kendall Jenner Ad.

In Case #2, you could reasonably ask in retrospect, what was Pepsi thinking?  The ad features Kendall Jenner watching a protest march from a posh balcony of a modelling studio.  Jenner decides to join the protest march by flinging her blonde wig aside, fluttering through protesters and offering a Pepsi to an officer assigned to contain the protest movement. We don't recall Jenner ever marching among activists or protesting in her real life; she epitomizes the superficialities of reality tv - how unauthentic can you be?  Pepsi spent millions of dollars on the ad and several more dollars to build back their brand equity after pulling their ad.  It was Pepsi's attempt to be affiliated with a movement, but they weren't willing to go all in, they wanted the affiliation without the risk.  The consequence?  Bad publicity and backlash from real activists.  It only reiterated that Pepsi was part of the "poser" generation and who would want to be affiliated with that?  

 

How do brands authentically align themselves around public heroes and avoid these pitfalls?  

 

+  Identify the public heroes

+  Know your customer base and understand their emotional accelerants e.g. what are they passionate about and what are the causes that they would stand behind and give to?

         >  Miscalculated steps of being on the wrong side of your customer base can also have disastrous consequences e.g. Colorado sports store owner decides to get rid of all its Nike gear - it was the downfall of his family business which was opened for 20 years

+ Bring the mindsets of activists, protesters and public heroes into your ideation process and you'll be amazed at what you come up with (these can be internal and/or external participants)

+  Do it with authenticity - pick a cause that your organization believes in and is willing to stand behind

+  Lead with how to make an impact for your cause, not just how to make a sale

+  Get reactions along the marketing & communication process from your intended audience and from everyday consumers

+  Become authentically part of the movement

 

Some of the most successful entrepreneurs and ideas came from taking risks to  address an unmet need.

 

 

 

 

 

 

 

References:
 

 

https://ftw.usatoday.com/2019/02/colorado-sports-store-nike-close-kaepernick

https://www.theatlantic.com/magazine/archive/2019/01/charles-duhigg-american-anger/576424/

Average Annual Expenditure Survey - Bureau of Labor Statistics:  2010-2017 https://www.bls.gov/cex/csxmulti.htm

Breakdown & definition of categories:  https://www.bls.gov/cex/csxgloss.htm

 

 

 

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