Week 2
The webcast featured Toby Jenner (Wavemaker CEO) in conversation with Brian Wieser (GroupM Global President, Business Intelligence) about the short and medium term impact of COVID-19 on our economies, on consumer behaviour and on media consumption – and including specific insights into the CPG, Luxury and Travel sectors.
How will COVID-19 impact the global GDP?
The countries that are worst affected were largely those who didn’t respond fast enough and aggressively enough. China was the biggest market to be hit first and hardest. Their neighbours Japan and Korea acted early on, thus their economies were not impacted too severely. As China slowly begins to return to normalcy with factories reopening, there was fear that the impact on China would affect the global economy, but the delay in action from the US and EU will impact their respective economies which may have a knock on effect on China’s. The goal for each affected country should be to “hibernate their market” – to freeze everything and give their healthcare systems time to adjust so they can respond when the virus spreads more widely. Overall the presumption is that economic decline will occur, regardless of actions taken.
How will the current economic decline fare in comparison to the 2008-09 global financial crisis?
The 2008-09 crisis affected big businesses more so than SMEs, but we may see a greater decline in SMEs this time around. Policy responses to reduce interest rates is helpful but not enough. SMEs have so few resources to draw on and may be forced to close due to lack of liquidity while they wait for government aid. COVID-19 is having a faster effect whereas in 2008, it took months for businesses to decline. What people don’t realise is how big an impact SMEs have on distribution; they drive distribution of products worldwide and if they’re not available to bring your product to market, then bigger businesses are in trouble too.
CPG, Luxury and Travel are three categories largely represented through the Wavemaker portfolio. What are the new norms and do the vary by sector?
All brands need to find a new way to be useful in this crisis. If you’re in a business that can produce supplies like soap, hand sanitiser or surgical masks, open your production lines to help the world. This is also a great opportunity to educate, for example if you make soap, remind people of the importance of hand washing and create positive impressions. Changes in our daily lives create an opportunity for creative messaging around consumer packaged goods and how we use them.
The luxury sector poses more of a challenge, but there are still opportunities for brands to be useful and socially responsible; help communities that are part of your customer base and this will help to maintain brand equity and affinity.
Travel has really suffered from COVID-19, but travelling will still be essential to our lives once we return to a state or normalcy. If businesses can stay afloat while waiting, then they will bounce back eventually.
Increased agility is needed now more than ever
In these trying times, fortune favours the bold. Being agile and looking for new and innovative ways to have a wider role for people, for example by supporting society, will be the right strategy for some brands. The time can be right for this as competition is scarce, and consumers have the time to interact with your brand.
