REGAL: Your company &US provides growth consulting and covers the business areas of full-service advertising agency, brand consulting, and management consulting. Can you give us your expert opinion on what measures retailers and the branded goods industry need to take to position themselves correctly during the coronavirus crisis and to quickly increase sales again?
Helmut Kosa: We have observed that industries have grown differently during this period. The crisis was definitely an accelerator, particularly in terms of expertise and infrastructure in digital channels. It revealed that a positive online presence, omnichannel or e-commerce presence are essential. Clear positioning is also critical for success. Those who are just starting now will have a hard time.
What other growth drivers must the retail and branded goods industry activate to successfully emerge from the crisis?
Erich Silhanek: It is more important than ever to use current innovative power, to react with agility to changes, and adapt to the new circumstances.
Kosa: In addition, retail and industry must use the data it generates from digital channels sensibly and analyse it correctly. Coronavirus has fuelled digitalisation and processes are becoming increasingly automated. Austrian companies still have a lot of room for improvement here, using the example of Amazon and others. Another growth driver is to change the shopping experience, adapting it to the customer’s wishes.
Traditional vs digital marketing – where is the journey heading?
Kosa: In my opinion, the distinction between traditional and digital marketing is no longer relevant. The consumer doesn’t care whether the purchase is made online or not. Besides, everything will become digital over the years. The current trend is a mix of both.
What kind of advertising was in vogue during the crisis?
Kosa: There was an increase in TV advertising – and online advertising also benefited. I would like to mention here that the increase in digital advertising is not linear with the amount of time a person spends on their mobile phone or laptop. The OOH sector suffered during the crisis.
And which digital channel is trending right now?
Silhanek: That is of course different for each company and depends on the target group.
Kosa: As an example, TikTok is a platform that is enormously trendy but is used purely by young people. Facebook, on the other hand, used to be a medium for younger people but is now also used by the older generation.
Silhanek: Here it is important that companies are agile and do not insist on one channel because it is trendy but change and develop with their target group.
Does this also apply to brands?
Kosa: That’s right. It’s also important for a brand. In the past, the brand was promoted through a one-way channel. Now everyone is involved in the discussion. That means the brand has to be authentic and sustainable. What is communicated internally and externally has an impact on the target group – and on the employees.
Is there a best practice example?
Kosa: We look after the Milka brand, for example. The way of communication has changed at Milka. The values are authentic and are shared clearly with the consumer. This has led to a successful development in recent years.
How do you assess the positioning of Austrian retail?
Kosa: Rewe is having a very hard time with its broad base of sales channels and brands. Spar has it easier here with its single-brand strategy. The discounters, on the other hand, have managed to establish themselves sustainably and broadly and to take on the supermarkets, for example, with regionality and a broad organic product range.
Brands vs own labels? Where is this development heading?
Kosa: Own brands are growing – we can see this clearly at Rewe and Spar. This increases the pressure on the brand-name companies. They now have to invest heavily in innovation and generate growth again.
Expert interview with &US managing directors Erich Silhanek and Helmut Kosa in REGAL,04/2021