How brands should innovate in the next phase of COVID-19

"Innovation is not just an outcome, but a mindset which brands must build into their business culture."

When the world is rocked by a crisis like COVID-19, new behaviors and preferences are rapidly adopted. Inevitably, some industries have been more affected than others. But as lockdowns ease, the instant red-light stop is gently shifting to amber, and with that brands face a new level of uncertainty as it becomes clear we won’t return to ‘business as usual.’ The challenge now is to re-define business by identifying, connecting with and delivering upon what consumers and markets demand.  

For businesses to survive through the next phase of life with COVID-19, they will need to innovate, but not necessarily by creating a new product or digital service channel. Innovation is not just an outcome, but a mindset which brands must build into their business culture.

Innovation must take on a different skew when the anchors for consumers’ lives – work, school and leisure – have been upended and we are anxious about the health of our loved ones. Innovation must now be about agility and adaptation; the process by which a product, service, experience, or business model responds to and re-defines how a business can offer distinctive and relevant solutions.

People have formed new behaviors that align to the new realities, a reworking of Maslow’s hierarchy – shelter, food, health, income – which has a profound impact on sectors and brands.  Assuming that there is no imminent vaccine or treatment, the idea of ‘remote’ everything will accelerate, and consumers will rapidly adapt and re-invent their needs, behaviors and expectations. Innovation will need to focus on deploying existing technology related to non-contact into new areas of service and experience; from voice-activated response, to antimicrobial surfaces, ‘time slot’ precision home delivery services and highly personalized ‘health protection.’

The digital-first economy will quickly leave behind those who have not digitally-enabled their workforce, customers, and business models. And this includes institutions like government and banking that have continued to rely too heavily on paper-based activity and form filling. Manufacturers have already had to innovate by shifting factory capacity to supply what is in demand and that trend will continue; even 3M has moved production from Post-It notes to N95 masks.  

Among those filling the ventilator gap were car companies; in the long term – with our new appreciation of reduced pollution – could this be the necessary nudge towards electric vehicles and ‘green transportation?’ Companies that focus on their core competencies and not merely their portfolio sales plans will be the innovators who ‘win.’ Not only because it demonstrates their relevance and value, but also because it links their sense of purpose and value to real market and consumer expectations and needs. 

The travel and transport sector is arguably the one industry in need of the most significant innovation as freedom of movement slowly increases. Bike sales have already surged, and we may see increased car ownership as restrictions ease, but public transport is avoided. In the medium term, and quite possibly longer, air travel will fall with a subsequent increase in staycations - and the nature of the Airbnb experience will evolve as ‘host’ liability will extend to consumer health concerns.

Elsewhere, businesses will need to reconsider and re-distribute their supply chains; a demand that requires firms to be agile, shift business models, retrain staff and establish new operational structures as we’ve seen with Panera in the US already. No matter what the sector, reappraising business models is essential, but adaptable innovation must remain aligned with the brand’s purpose and ethos. 

In our 2019 Best Global Brands report, Apple, Google, Amazon, Microsoft, Coca-Cola, Samsung, Disney and McDonald’s all triumphed – companies that have successfully ‘blurred’ the lines of their original categories and transcended to be more than the sum of their parts. Their success was built, amongst other things on being proactive in introducing community-minded action and leveraging their capabilities to respond to the changing market dynamic, and recent innovation has continued to reflect this. Apple has reinforced its consumer focus with a direct to consumer sales and service relationship, substantial CSR activity and steps to make its community of workers safe. Google has donated to COVID research and has organized ‘access info’ sites, and Disney launched a new streaming platform to perfectly meet the needs of locked down viewers.

With better consumer engagement and insight informing strategy, the companies emerging stronger in the second phase of COVID-19 will be innovating and adjusting their business models to embrace the new market conditions they operate in. Those that recognize how to internalize the external expectations of their audiences and offer innovative approaches to deliver new value will be those that not only survive, but thrive in the months ahead.

Christopher Nurko is the chief innovation officer of Interbrand.

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