WH inc. Spring 2021 Active Explorer Market Research

Spring 2021

OPTIMISM RAINS. Better grab your umbrella for the great reset.

Here’s a recipe for chaos as consumers exit the pandemic and enter the great reset: Equal parts pentup demand, delayed product launches and shifting buying habits. Curious about what other brands are thinking and doing? Dive into our exclusive research report for marketers and learn how to apply that thinking to your own organization.

The good news is that most marketers remain optimistic of the future. The bad news is that chaos has torn through the industry. How we go to market has forever changed, and that provides opportunity for the smart marketer who is ready to provide value to their consumers.

We’ve seen how 2020 changed the way people experience, buy and receive products forever.

Supply chains were mangled, broken and reformed, all sales forecasts were thrown to the wind and once-well-calculated marketing plans were chewed up by a whirlwind of speed to market, informality and rapid implementation. Though chaos abounds, brands now have a great opportunity to be part of the great reset.

“

Between March and August 2020, 1 in 5 consumers switched brands, and 7 in 10 tried new digital shopping channels. The retail sector experienced 10 years of growth in digital penetration in a matter of months.”

- McKinsey and Company March 25, 2021

Let’s look at some data.

In March 2021, we conducted online surveys of 60 marketers from manufacturing, CPG, travel, and the restaurant industry as well as with 300 Active Explorer consumers who answered a mix of questions to provide a snapshot of experiences and inform our perspective.

WHAT’S IN FLUX? Marketers report issues with supply chains, retailers, budgets, staffing levels, photography and delayed product launches. Some have shifted their targeting and many have brought in new and entrylevel buyers into the market. As Active Explorers in general have been grounded from activities like travel, they have remained strong explorers in the pursuit of new activities like gardening, cooking and at-home gym workouts.

When it comes to working with retailers or distribution networks, respondents had a variety of experiences.

29 20% 22% 10% 18% %

had a harder time working with them than in previous years because some were restricted or shut down had an easier time working with them than in previous years because they focused on essential businesses reported that working with them was more difficult than in previous years because they were working remotely

How has the pandemic affected your marketing budgets (in total dollars) for the past year?

26%

28%

23%

Decreased them by a little (5-10% or so) Decreased them by a lot (11-50% or so) Total didn’t change much for the year (0-4%) Increased them by a little (5-10% or so) Increased them by a lot (11-50% or so)

57%

of marketers’ supply chains have been affected in the last year

How have staffing levels been affected in the last year?

22%

51%

Increased staff Maintained staff Reduced staff

reported that customer demand was high, so it made things easier reported that customer demand was high, so it made things harder

57%

of marketers report challenges with photography

65%

of marketers delayed or cancelled product launches during the last year

19% 4%

43%

of marketers are targeting new audiences this year

The same proportion is maintaining the same audiences as before.

Questions specific to your unique business? Contact mjw@WH1969.com

27%

“

What should you do about this?

“

As the backend catches up with frontend demands, marketers will need to increase presence to deal with the onslaught and backups that are getting cleared out.

With new customers in the market and “pandemic sales” booming in several sectors, a focus on brand value and loyalty will normalize the spikes and brands that show value will continue to separate themselves from the pack.

We quickly made a shift in our business at the start to ensure we remained profitable. From that point forward, we were able to position and target our product differently to address the current situation and allow customers to see the future.”

We adapted slightly – we are a high-end cycling company but we do make bikes for all abilities and at some lower-end price points. We’ve turned to focus on entry-level bikes as well as electric bikes since more people are getting into cycling for the first time or for the first time in a long time.”

Questions specific to your unique business? Contact mjw@WH1969.com

CHANGING THE CHANNELS It’s no surprise that marketers are looking to speak more directly to consumers through social media.

Despite the numerous social and political issues that have arisen around social media platforms, the channels remain strong and growing within digital overall, but it’s noted that people want usable content from brands, content that genuinely reflects their values and shows inclusivity and diversity. But overall, consumers do not want brands to be political, with exceptions for likeminded values.

Marketers are focusing on, and investing in, these channels:

74% 72% 70% 68%

Direct to consumer

Paid social

Digital - display ads

Over half of AEs are using social media more now and generally use the same sites. AEs enjoy and want these types of content (in descending order) from brands: Product how-to and usage tips Reviews Helping others Product offers Social issues Events Political messages Influencers Bloggers

46% 45% 37% 35% 34% 29% 20% 18% 18%

Although when specifically asked about messages from brands, 70% of AEs do not want political messages and 64% want diversity and inclusion messages.

As you look to brand positioning and content, it is also of interest that consumers rank family, honesty and respect as the top three values brands should represent.

Retail

When asked to rank which are most effective for them, marketers’ ranking matched the areas they said they are focusing on:

1. Social media 2. Digital 3. Shopper marketing

What should you do about this?

While DTC growth abounds, there are serious implications and scalability, from shipping costs to cost-per-acquisition to consider. Paired with social selling, brands that are going to thrive are showing their value and becoming part of the lives of consumers by simply delivering what people want to be a part of.

“

The challenge is that the DTC model might not scale well. Home delivery is costly, adding to the squeeze on brand profits, and customers have neither the time nor desire to manage one-to-one relationships with all the brands with which they do business.”

- Accenture

Questions specific to your unique business? Contact mjw@WH1969.com

YOU CAN’T ARGUE WITH THE NUMBERS, OR CAN YOU? Marketers in our sample were all over the map on how they collect, analyze and utilize data in their organizations and decision-making processes. As we shared earlier, the focus on social and digital channels suggests that this discipline will grow stronger as more money goes into these channels.

However, data collection presents its on set of issues for many marketers in that the time to set up, measure and utilize often gets in the way of acting on the intelligence.

Which of the following best describes how you are integrating marketing analytics into your decision-making?

9% 17% 30% 30% 13%

don’t collect data effectively collect data effectively but need help making sense of it collect and analyze data, but don’t use it much for decision-making collect and analyze data, and use it to drive decision-making collect and analyze data and use it in advanced ways to make decisions

Marketers fall into two categories overall: they are collecting and analyzing data, but they do not use it for decisions; or they are collecting and analyzing data and they do use it for decisions.

Questions specific to your unique business? Contact mjw@WH1969.com

What should you do about this?

Every organization has different needs, and nobody ever sounded dumb in a meeting by saying they make data-driven decisions or that they are going to test and learn. Marketers who are going to thrive in the great reset will have a useable, functional data analytics platform in place and measure and act on what is important to them.

We stress the actionability of the data sets, and we stress that marketers focus on areas that will make a difference. Don’t just test to say you are testing. We’ve seen organizations that are too data driven as well as those that don’t track anything.

Choose the metrics that are important to your business and drive them—but be aware of death by measurement, as it is almost as bad as groupthink and can lead to generic, watered-down brands that will fade away in the great reset.

HOW DO AGENCIES PLAY IN THE MIX? We’ll be the first to admit we are biased on this point, being an independent agency. Trends of inhouse versus outsourcing shift every few years, and the once standard AOR (agency of record) model still shows promise across some markets, while multiple (best of breed) agencies tend to scale with more enterprise-level clients.

We know this last year has stress-tested the strongest of relationships, and has brought some client/agency relationships closer together and split some apart. Client reviews have been shortened and less formal, but demands are higher than ever with the future of your business on the line.

However, many marketers love their agencies like family.

“

We find the best specialty agencies, set the strategy from the center and then everyone uses their respective expertise to bring it to life. We currently have seven agencies, and our expectation is that they also work together collaboratively, and they do! We feel it is worth it to have best-in-class support across different disciplines.”

60% use one or more agencies and 40% use in-house.

40%

29%

31%

In-house One agency Multiple agencies There are some troubles in agency paradise as marketers’ frustrations show a lot of agencies are out of touch with their clients and the consumers.

The skinny jeans seem to be cutting off the circulation to the brain.

Marketers described pet peeves they have with agencies: • NY-centric attitude • Lack of quick response to inquiries/ low turnaround • High cost/ Monthly retainers • Not understanding our customer/ industry/business/ Not really understanding our brand and customer • Lack of detail in our program • Classic sales and marketing disconnect • Need to be customer-driven Questions specific to your unique business? Contact mjw@WH1969.com

What should you do about this?

Look to agencies to provide expertise in the areas you need, and look to unique models on inhouse partnerships with agencies. A good agency will be an extension of your team, but bring in the much-needed outside perspectives and advice to help manage the great reset. Watch out for bad actors though; agencies that are too slick are hard to grasp. Make sure your agency has empathy for your situation, and does not have their own agenda for your brand. Success is a mutual metric.

WAYS OF DOING BUSINESS Business will be forever changed. In the wake of the flood, a number of antiquated and baked-in practices were thrown out the door.

Shedding these help businesses be nimble, proactive and focused on customer value. While these changes are fundamental, as the country opens up, some will rebound, some will be set aside and new ones will come into play. The smart marketer has learned from the experience and knows that it’s more than just a desire to get back to normal—it’s a whole new way forward. As we break into new territories with the great reset, marketers are mostly optimistic about business.

“

We quickly made a shift in our business at the start to ensure we remained profitable. From that point forward, we were able to position and target our product differently to address the current situation and allow customers to see the future.”

“

We are focusing more on digital, as a channel, but not different targets.”

“ “ “

Viable strategy for global expansion where other brands have more brand recognition.”

We can leverage other brands network and gain market share.”

Brand partnerships are becoming more and more important in brand perceptions as consumers have less confidence in brands when they stand on their own, but when paired with relevant brands, we are able to take advantage of the loyalty and trust they have in their audience, and the same can be said of those who are loyal and trusting on our side. In their best state, partnerships are mutually beneficial, and with influencer marketing becoming a large portion of our influence, it is to be expected.”

How would you describe changes to your target audience(s) in the past year?

43%

43%

14%

Shifted targeting to new audiences Targeted the same audiences as before Focused on fewer target segments

82%

will continue partnerships

Collabs are all the rage these days, and it makes sense. Take two like-minded aesthetics and join forces to bring in new members and attract the others.

“

It is an easy way to extend our digital footprint.”

Questions specific to your unique business? Contact mjw@WH1969.com

Do you foresee the return of trade shows in the next year or so?

82%

10% 8%

Yes No Don’t know Tradeshows will continue in person but need to use tools to reach more people who can’t attend.

“

They are still very necessary, but need to become more effective for everyone.”

“

I see offering a digital component and F2F component if they see digital events reaching people they wouldn’t otherwise reach.”

“

They will be forced to be more inclusive of those who are not in attendance. There is still an occasion to see items and to allow consumers and media to see a product.”

Marketers seem optimistic about tradeshows, and while all of us are yearning for a good happy hour with our extended teams or a few nights in a hotel, have we seen that business can be done more efficiently?

Do buyers still need to be there? We envision shows being very different in the years to come.

76

On a scale from 0-100, how optimistic are you about your business in 2021?

What should you do about this?

Optimism can change the world and paint a bright future. By embracing new ways of doing business, letting go of baggage and antiquated practices and meeting consumers where they want to be, you have an opportunity to thrive in the brave new world. Consumers are already planning ahead and connecting with brands that provide them with value, show them new experience and provide a sense of optimism within their daily lives.

Which of the following are you shopping for or researching as you plan ahead?

20% 23% 12% 25% 10% 4%

Backyard improvements

Home improvements (indoor) Functional foods to boost immune system

Travel plans to get away

Pets - buying for

Pets - adopting or owning a new pet

As part of this research we also collected data from the Active Explorer audience, some of which is reflected here. However, please be on the lookout for our full consumer report to be released in the coming weeks of Q2.

Questions specific to your unique business?

Drop us an email.

Marc Williams Owner, WH inc. mjw@WH1969.com

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