Shifting from tactics back to brand strategy

Julian Met­calfe, the co-founder and own­er of Itsu, has described the pandemic’s effect on the fast-food chain’s 77 out­lets as “dec­i­mat­ing”, but at least he has made a good bet for long-term growth in the shape of Itsu Gro­cery, a spin-off brand of prod­ucts to cook and eat at home.

“We’re open­ing more restau­rants now, but not at the same rate at which peo­ple are dis­cov­er­ing what they can do at home with a bao bun or chick­en gyoza,” Met­calfe says.

Itsu is one of many brands, in indus­tries includ­ing hos­pi­tal­i­ty, trav­el and fash­ion, that have need­ed to adopt new tac­tics to sur­vive the pan­dem­ic. So what does flick­ing the switch back to longer-term plan­ning and brand-build­ing look like – and will key per­for­mance indi­ca­tors shift from being sales dri­ven and dig­i­tal­ly ori­ent­ed?

Product innovation – and a digital presence

Met­calfe is, of course, invest­ing in recov­ery for his busi­ness, which is also tri­alling a new store con­cept, com­plete with a sushi-churn­ing robot, to attract the quick-bite-after-work din­ner mar­ket. But his ambi­tions for the gro­cery arm to inspire con­sumers when cook­ing at home mean that inno­va­tion will be the main objec­tive he’s attach­ing to long-term brand-build­ing. 

“For a brand, noth­ing mat­ters near­ly as much as the val­ue of the prod­ucts. We’re look­ing at launch­ing 20 to 30 in the next year,” says Met­calfe, who also co-found­ed and owned Pret A Manger until his exit in 2018. “Hav­ing key per­for­mance indi­ca­tors is hard for us, because it’s all about inno­va­tion. Our KPIs will prob­a­bly be more about doing every­thing human­ly pos­si­ble to make these ranges remark­able. For instance, we want to make the best broth in the world for ramen at home for £2.50.” 

For Itsu Grocery’s MD, Clau­dia San­ta­ga­da, this means review­ing the dig­i­tal invest­ments that have been made over the past year and assess­ing what becomes a last­ing part of the firm’s mar­ket­ing mix. She also plans to restart spend­ing on tra­di­tion­al tac­tics, such as in-store sam­pling and out-of-home adver­tis­ing, to build on the 59% sales growth that Itsu’s super­mar­ket range has seen over the past year.

“We spent a lot of time and effort improv­ing our dig­i­tal chan­nels. It’s def­i­nite­ly part of our longer-term strat­e­gy,” says San­ta­ga­da, who used the shopfronts of closed Itsu out­lets as bill­boards to pro­mote the gro­cery range dur­ing the lock­downs. “We did a lot of work to set up our own Ama­zon shop, for instance, which is the first time all our ranges have come togeth­er vis­i­bly as a brand.”

She con­tin­ues: “We’ve since noticed much high­er engage­ment with respect to user-gen­er­at­ed recipes on our web­site. We’ve also start­ed to go back to a more tra­di­tion­al approach – acti­va­tions in store are fun­da­men­tal to intro­duc­ing new ranges and improv­ing their vis­i­bil­i­ty. But there is also a com­mit­ment to increas­ing and improv­ing our dig­i­tal pres­ence.”

Per­haps most cru­cial­ly, Itsu Gro­cery and Itsu restau­rants are run as sep­a­rate enti­ties, mean­ing that the two don’t com­pete for mar­ket­ing and oper­a­tional bud­get. This also lib­er­ates San­ta­ga­da to plan for the longer term. 

“Our brand has enor­mous poten­tial. But, as Julian says, it ulti­mate­ly depends on the qual­i­ty of the prod­ucts we bring into the mar­ket,” she says.

D2C and partnerships 

Lyre’s, a brand of low-alco­hol spir­its found­ed by two Aus­tralians in the UK in 2019, has had to invest heav­i­ly in the direct-to-con­sumer online chan­nel to work its way through the Covid cri­sis. Although its vice-pres­i­dent of Euro­pean mar­ket­ing, Jayne O’Keeffe, is plan­ning to reac­ti­vate venue engage­ment and sam­pling, as well as a tra­di­tion­al sea­son­al cam­paign, main­tain­ing its D2C pres­ence will be cru­cial to build­ing what is still a new brand.

“When the pan­dem­ic hit and many of our poten­tial cus­tomers closed their doors, we moved to a dig­i­tal-first strat­e­gy that has proved excep­tion­al­ly suc­cess­ful. In the UK, we would have expect­ed that 15% of our sales would have been via D2C, but it’s now more than half,” O’Keeffe says. 

Although she will tar­get new­ly reopened pubs and bars once again, O’Keeffe also plans to con­tin­ue mar­ket­ing to at-home drinkers, giv­en that health-con­scious con­sumers are increas­ing­ly embrac­ing a low-alco­hol lifestyle. She notes that align­ing the brand with well­ness and “mind­ful drink­ing” will be key to bal­anc­ing sales-dri­ven growth with long-term brand-build­ing. 

“Last year we worked with the Mind­ful Drink­ing Fes­ti­val in the US, serv­ing 10,000 drinks to peo­ple over two days. It was phe­nom­e­nal­ly suc­cess­ful,” O’Keeffe says. “We’ve also worked with some great sober influ­encers, such as Fat Tony and Emi­ly from Sober and Social. Part­ner­ships work well for us. We’ve part­nered with brands such as Ben­e­fit and Weight Watch­ers, which has giv­en us access to a wider audi­ence who want to have fun and relax with an alter­na­tive to alco­hol.”

Part­ner­ships have also been key for Fly Now Pay Lat­er, a finance start-up offer­ing con­sumers a way to spread the cost of over­seas trips. The cus­tomer-ser­vice ele­ment of the busi­ness ground to a halt dur­ing the pan­dem­ic, but a lot of work was done behind the scenes to devel­op long-term part­ner­ships to help it pre­pare for the trav­el industry’s big come­back and start earn­ing the loy­al­ty of trav­el-starved con­sumers. 

In March, for instance, Fly Now Pay Lat­er signed a deal with Malaysia Air­lines. That, cou­pled with a new injec­tion of ven­ture cap­i­tal, means a launch for the busi­ness in the US. 

“Large enter­prise trav­el brands are being much more for­ward than they usu­al­ly would be in imple­ment­ing alter­na­tive pay­ments such as ours,” says the firm’s founder and CEO, Jasper Dykes. “They’re antic­i­pat­ing that hol­i­day prices will rise – and that con­sumers will need alter­na­tive financ­ing to deal with that.”

Supporting long-term brand-building

Alter­na­tive mod­els with long-term brand-build­ing poten­tial are also tak­ing off in the fash­ion indus­try. Online brand This is Unfold­ed start­ed trad­ing this year with a unique propo­si­tion: cus­tomers must wait up to six weeks to receive their items, which are made to order. This approach reduces waste and bet­ter sup­ports work­ers in the sup­ply chain. 

But the brand’s founder and CEO, Cal­ly Rus­sell, believes that an invest­ment in build­ing an online com­mu­ni­ty, rather than tra­di­tion­al mar­ket­ing meth­ods, will give This is Unfold­ed longevi­ty. That’s why it has the fol­low­ing three main KPIs: repeat cus­tomers, return rate and cost per cus­tomer acqui­si­tion. 

“It’s still hard for us to plan for the long term, but we do expect a strong con­sumer bounce-back in the com­ing months,” he says. “From a brand strat­e­gy posi­tion, we need to take a more pos­i­tive and aggres­sive approach to growth.”

Whether they’re focus­ing on inno­va­tion, part­ner­ships or com­mu­ni­ty-build­ing, brands have had to use cre­ative tac­tics to pre­serve their sales in the tough­est con­di­tions. As the pan­dem­ic-relat­ed restric­tions on trad­ing are grad­u­al­ly loos­ened, it’s clear that mar­keters intend to take the best of the past year with them into the post-pan­dem­ic era.