Rush to the Future - The Rise of New Brands in the New World
We have officially entered a new era as almost two-thirds of the world is coming out from global confinement. We emerge with an economy that has taken a significantly worse battering than anyone had expected. Whilst no industry or global brand has been left untouched, without a doubt, standing at the epicenter of the crisis are brands that were dependent on social interaction and physical presence.
Before the outbreak, global brands in retail, service, travel, and education were built around social interaction commanded premiums. Covid-19 violently showed us the downside, a rude awakening for these sectors as they were left with nothing. This shock raises questions about how brands need to adapt and reconfigure to seek relevance in the future. Questions about where brand value should be placed and the speed of this transformation will be answered by the survival of the fittest and emerging new brands who successfully act upon the profound changes of consumer behavior in our world’s new and next chapter.
The reinvention of the travel industry
The travel industry is an example of a sector that will need careful reinvention. The decimation of travel during Covid-19 has shown the pandemic’s superior power. Entire cities and countries that have been placed on lockdown are waking up to a new world where travel went from a romantic experience to a high-risk danger. The picture is gloomy with massive cancellations of international events and geopolitical tension reconfiguring international trade and limiting cross borders. The comeback of this industry will have to rush in massive change: a point that is simple to say yet highly complex to execute.
This pandemic has challenged the foundations of travel and unquestionably given rise to a new traveler persona. This post-pandemic tourist will go to travel companies who pivoted to overcome supreme health and safety risks that travelling presents by leveraging opportunities in robotics and other automation technologies that have previously struggled to gain traction.
Covid-19 and the digital-first future
The brands of tomorrow will need to address a new audience which has, overnight, become more fluent digital shoppers than ever before, expecting full online services, 24/7 connection, and clearer cancellation policies. No one is exempt from this call to change: brands all over the world must digitally transform - a process that, in the past, has been notoriously difficult to take on.
COVID-19, however, has unleashed new ways of living that will pave the way for a digital-first future. There is a fantastic opportunity waiting for brands upon their arrival to the answer of this question: how can we adapt to new habits while staying authentic to humanity in a world where safety, isolation, privacy, self-service, nationalism, and fear have become heightened values? Privacy is a value that will be paramount for luxury clientele as they seek to stay safe and remain in a home-like environment. High-end private rental platforms such as Le Collectionist and onefinestay have the chance to fully take advantage of this new need.
We can already witness excitement and evidence of digitalization, especially in the hotel sector - which could effectively avoid many points of contact.
Stating the obvious, a number of jobs will disappear across the value chain. The first Global FT Boardroom explained that the rupturing of production chains was not simply because of the stoppage of supplies and missing parts, but well because of the security to assure employees and workers of many production chains at the stop. One response was to intervene remotely by digitizing certain interventions hitherto reserved for on-site employees.
Robots, automation and... humans !
This phenomenon can be observed across many sectors and functions - in the hotel industry, the human factor can be decisive. We have to see the real reasons why customers come back to a hotel: the attention and personalization of the staff is essential. Starwood Hotels & Resorts, a long-time industry pioneer and innovator, is a perfect example for companies to look to. The Starwood Preferred Guest Platinum Ambassador program offers its loyalty members a first-ever virtual travel companion created using a hybrid model using best in class service teams plus CRM 2.0 technology. Although this was launched before the crisis, this innovation is significant because it caters to two contradictory needs that brands will have to simultaneously satisfy and balance as they move into this new era: consumers’ increased value of isolation and human nature’s innate need for interaction.
In mid-March, Marriott’s Westin Houston Medical Center purchased two LightStrike Germ-Zapping Robots created by Xenex, a company offering automatic solutions for disinfection, air purification, and sanitation, to put in its rooms and common areas to stop the spread of the virus. Luxury and fashion sectors are catching onto the digital reform as the virus led to universal fashion show cancellations. Valentino, Marc Jacobs, and Sandy Liang have partnered with Nintendo’s video game, “Animal Crossing: New Horizons”, to reveal and showcase their new and existing collections which players can style into outfits on animated characters. As brands transform, they must keep in mind the fact that hyper-digitalization can very well lead to an obvious and glaring lack of humanity.
New concepts, particularly in the hotel industry, will benefit local, more authentic, and closer tourism. Technology can help in many facets of workflow management but will not replace hospitality and the fundamental entertainment and spirit only humans can bring to life. Let’s not forget why Club Med succeeded: GOs were at the heart of its success. Atmosphere, ambiance and kindness were, and still are decisive. Without GOs (Gentil Organisateur), true ambassadors to the spirit of Club Med, Club Med would not have been, and be THE Club Med.
This article was co-authored with Javier Cedillo Espin.
About the authors: Yves Hanania is the founder of consulting firm Lighthouse, specialized in brand development strategy, and main author of the book ‘Le luxe demain. Les nouvelles règles du jeu’ (the future of luxury. The new rules of the game), published by Dunod (Hachette group). He is a regular contributor to the Harvard Business Review and Influencia on branding and strategy. Yves holds an MBA from the Kellogg School of Management (Northwestern University).
Javier Cedillo Espin is the Founder & CEO of Key Partners Ventures and independent advisory and ventures firm investing in digital transformation and service automation. Javier started out in the hospitality industry and work for leading companies in the hospitality sector like Starwood and Accor to taking on a CEO role at high-end Airbnb-like hospitality platform, OneFineStay. Javier is a graduate of the Cornell University’s SC Johnson College of Business, holds an MBA from Essec-Mannheim Business School and a Diploma in Japanese Language from Hokuriku University.