When buying decisions are delegated to algorithms, what is the role of the marketer? Phil Sutcliffe believes practitioners will need to increasingly jolt consumers into taking notice – and brand activism might just trump AI.
We are entering an era where the Internet of Things means that people will increasingly delegate buying decisions to AI-powered bots. Amazon Dash buttons already allow people to buy a range of brands, from toilet roll to instant coffee, at the push of a button. There are now more than four Amazon Dash orders placed per minute in the US, with Dash sales increasing 650% year on year to July 2016, and more than half the sales on Amazon.com for brands such as Folgers Coffee, Pepperidge Farm and Ziploc are being placed via Dash buttons1. Amazon Dash eplenishment takes this a step further, incorporating sensors into connected devices such as Brother printers, Oral-B electric toothbrushes and GE dishwashers to order new printer cartridges, toothbrush heads or dishwasher detergent automatically when supplies are running low.
From a consumer perspective, the attraction of such technology is clear – why waste time on shopping in a low-involvement category when my connected home devices can do it all for me. However, an obvious barrier to widespread adoption of these sensor-driven connected devices is consumer mistrust that they will be ripped off. For example, I may be happy for my dishwasher to automatically reorder detergent for me but I don’t want it to buy Finish if Fairy is on offer. So a key enabler of the success of these connected devices will be when they move beyond single-brand choices to be programmed with AI algorithms to buy a brand from a repertoire of the consumer’s acceptable choices. The choice algorithm would include price but may also include other criteria that the consumer has specified, such as format, pack size or their degree of reference for one brand over another. Once these initial criteria have been set by the consumer, the buying decision is left to the bot, allowing it to shop around and find the best choice from within the consumer’s acceptable repertoire.
What then is the role of the marketer in this world where buying decisions are delegated to algorithms embedded in connected devices? In an excellent McKinsey Quarterly article from January this year2, the authors make a strong case for how marketers will need to employ processes akin to search engine optimisation. This will effectively be about optimising your brand offer so that it presents the criteria that will best meet the requirements in the decision-making algorithm for a particular buying situation.
However, while I think this is correct, my view is that the successful marketer of the future will need to do more than just develop and deploy algorithms effectively. There will be a need for a new approach to brand building – building ‘mental availability’ to be considered in more buying situations won’t be as relevant when those buying decisions have been delegated to bots. In this scenario, brands will need to find a way to disrupt consumers sufficiently so that they deem it worthwhile to make the effort to insert new decision criteria into the bots’ consideration set. This will require a way of jolting consumers to sit up and take notice of your brand, making the rand meaningful enough to people that they move from a passive choice (via the bot) to an active brand choice. This is about moving from building mental availability to creating ‘mental disruption’.
Is Purpose Enough to Create Mental Disruption?
So how will brand marketing be able to disrupt consumers to this extent? Even today where the consumer rather than a bot makes the buying decision, I would contend that building mental availability is about more than the Byron Sharp view of salience and distinctiveness (though they are undoubtedly important). Brands also need to engage the consumer in a way that connects with them and the things in life they care about to drive mental availability. The proof can be found in the ‘Power in the Mind’ measure we use at Kantar TNS to understand brand affinity. Power in the Mind measures the degree to which a brand meets consumer needs, engages them emotionally and is considered more attractive than alternatives. We find that if a brand has higher Power in the Mind share than its market share, then the brand has opportunity to everage this Power in the Mind and build share if it can strengthen on market factors such as distribution and pricing. A good example of this in recent years has been Waitrose and, conversely, Tesco has suffered due to its Power in the Mind being behind market share (Figure 1).
This need to connect with consumers emotionally and the things they care about is reflected in the importance that many businesses have attached to brand purpose in recent years. Dove has integrated its purpose of improving female self-esteem into every aspect of the brand. Unilever has stated that its brands, such as Dove, Hellmann’s and Ben and Jerry’s, which have integrated sustainability into their purpose and products, are collectively growing 30% faster than the rest of the business. Nike is another example of a brand that has strengthened its emotional connection with consumers through activities that make real its purpose of ‘bringing inspiration and innovation to every athlete in the world’ such as Nike Run Club and the Nike 10k.
So will a strong sense of brand purpose be enough to create the mental disruption that will cause consumers to sit up, take notice and go to the effort of entering new consideration criteria into their connected devices’ AI algorithms? I think there is going to be a requirement for brands to revisit their brand purpose and decide if the conviction behind it is sufficiently motivating enough to disrupt consumers, and whether as a brand they really deliver against it strongly enough to convince consumers to take action.
Adding Brand Activism to Brand purpose
What this is likely to mean is that brands will need to move beyond brand purpose to brand activism. Purpose should not be vague or anodyne but will need to be cause and conviction led. Think of brand purpose as the change your brand wants to make in the world. Think of brand activism as how your brand lives and delivers against its purpose in a way that convinces consumers you are driving meaningful change. Only then will your brand have enough mental disruption to cause consumers to sit up, take notice and think about whether the cause resonates with them strongly enough to insert your brand into their bot’s consideration set.
There are several examples of brands that have moved beyond purpose to activism. The most famous example is probably Procter & Gamble’s Always and its #LikeAGirl campaign that sought to empower young women through turning a negative phrase into an inspiring message. Other examples include Ben & Jerry’s and Patagonia. Ben & Jerry’s states that “our social mission compels us to use our company in innovative ways to make the world a better place”, and the brand takes an activist stand on issues ranging from democracy to climate justice to Fairtrade. Patagonia, with its Common Threads and Worn Wear initiatives, has focused on working with consumers to help them repair, pass on or recycle their products to keep them out of landfill. However, brand activism can bring with it the risk of polarising opinion. We live in a world, at least in the West, where there has been a massive and ongoing political shift over the past 12 months. People have become more politicised – Trump in the US, Brexit in the UK, Le Pen in France and Wilders in the Netherlands have forced people to have a point of view. You are on one side or the other. So what does this mean for purpose-driven, activist brand strategies such as climate change or celebrating racial and religious diversity, for example? These are issues on which people are taking sides and brands need to consider whether they want to align on one side or the other or not.
The fashion brand Diesel has taken sides with an activist campaign called ‘Make Love Not Walls’, with more than a passing nod to US President Trump’s plan to build a wall separating Mexico from the States. Diesel’s artistic director, Nicola Formichetti, said: “At Diesel, we have a strong position against hate and more than ever we want the world to know that.” Clearly, this is a message that can be expected to appeal strongly to a young, urban, liberal demographic that is anti-Trump and anti-Brexit – but it will just as equally enrage others. Fashion is not a category where many purchases are likely to be delegated to bots. However, in lower-involvement categories where the purchase decision will be delegated, the need for brand activism will arguably be stronger as mental disruption will be essential.
The question then becomes, how should brands pursue a more activist agenda? If brands do this in a way that is political, then they will naturally polarise. In doing so they will be rejecting the idea of going for broad reach, instead focusing on trying to build a strong relationship with a narrower target based on shared beliefs and values. As a strategy, this may bring some growth to smaller brands but there will be limits: essentially, being polarising will result in being niche. The importance of increasing penetration to drive growth, put forward by Sharp, has been proven many times. For example, Europanel analysis of purchasing behaviour across 16 countries, 79 categories and more than 10,000 brands demonstrated that brands grow fastest by attracting more buyers, not by getting buyers to buy more often. Kantar Worldpanel’s Brand Footprint analysis (Figure 2) also clearly shows the strong relationship between penetration growth and brand volume growth.
So if brand activism is to be used to create mental disruption in a way that will drive penetration, the challenge for brands is going to be how to do so in a way that doesn’t polarise in the new political climate. In doing so, brands will have to think about the causes that unite rather than divide. And they will need to deliver actions that demonstrate to people that they are really making a difference in support of the cause.
A good example of a brand whose purpose has been extended in a more activist way is OMO/Persil3. The brand’s purpose, expressed through its ‘Dirt is Good’ agenda, is about how children learn and develop from playing outside. The brand campaign centred on the insight that, on average, children spend less time outside than maximum security prisoners. Taking an activist stand in support of the agenda of getting children to spend more time playing outside has led to OMO working on a range of activities. These range from building playgrounds to working with legislators and experts in different countries to encourage children to play and learn outside through initiatives such as an outdoor classroom day. The brand seeks to get parents involved in these activities, which is a great way to spark mental disruption. For example, Persil created the Wild Explorers app, with 100 ideas to get kids outside. One of the interesting things about the OMO work is that a lot of the activism is local at a community level. Another example of a brand doing this is the paint brand Dulux with its ‘Let’s Colour’ project, which donates paint to communities to help them transform a local space with colour. In 2013, Dulux estimated it had added colour to the lives of more than 200,000 people in the UK in their schools and nurseries, community centres and sports clubs. With locally based activism, it is arguably easier to focus on bringing people together in a common cause. The results are also very clear, so making an impact is easier to demonstrate.
Physical Disruption as well as Mental Disruption
As well as encouraging brands to take on a more activist, disruptive brand purpose, another consequence of buying decisions being delegated to bots is likely to be the re-emergence of sampling as a key marketing tactic. J. Walker Smith from Kantar Futures has described the shift to
algorithms being in control as the “pivot to passive”. Walker says that “the algorithm may be able to buy stuff, but it can’t use it. That’s where brands can have an unmediated connection with consumers.”4
So, in my view, this will mean moving beyond physical availability, making your brand available in as many places as possible, to also focusing on physical disruption – essentially, ‘forcing’ your brand onto people by dropping it through their letter box (Figure 3). We can expect to see sampling being used particularly strongly for new-product innovation, where it will be even harder by brand messaging alone to disrupt the delegation of buying decisions to bots. Direct-to-consumer models by manufacturers will also increasingly be used as a physical disruption tactic. For example, the business model Unilever purchased with its $1bn acquisition of Dollar Shave Club gives it a prime opportunity to introduce other relevant brands in its portfolio to consumers. Dollar Shave Club works via a subscription, with members being sent new razor blades for as little as $3 a month. As well as blades, consumers can now buy other shaving products – shower, hair and skin products. This direct-to-consumer channel will provide a great opportunity for Unilever to introduce brands to consumers in their own homes.
My final thought is that the shift to mental and physical disruption will also result from other prevalent trends that mean consumers are shifting to more automated purchasing. For example, the rise of ecommerce means that more purchases will come from people repurchasing a core basket of items at each buying occasion. Bryan Gildenberg from Kantar Retail has spoken about how the shift to voice-controlled internet devices, such as Amazon’s Alexa, will lead to more ‘renewal purchases’. So marketers should start thinking now about how they will deal with the rise of these forces leading to more automated purchasing. In particular, if your brand operates in a low-involvement category, start to think about how your brand should focus on mental and physical disruption rather than just mental and physical availability.