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October 9, 2020

The end of the ‘experiential activation’? Innovation in physical experience-based marketing faces an existential challenge in the age of pandemic

For years, brands across FMCG have been marrying their products, ethos, and brand stories with increasingly innovative uses of physical space and technology to offer immersive experiences and touch points for consumers.

By GlobalData Retail

For years, brands across FMCG have been marrying their products, ethos, and brand stories with increasingly innovative uses of physical space and technology to offer immersive experiences and touch points for consumers.

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  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
by GlobalData
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These activations (so-called “experience rooms” being an example) have often been highly conceptual, quite unusual, and thoroughly modern. They have been integrated with technology to allow consumers to instantly share, and thus promote their experiences and the brand across social media, as well as control or interact with aspects of the installations via mobile device as they experience them.

That was until COVID-19 struck.

Such experiential marketing activations using branded spaces were essentially wiped out in terms of usefulness by the advent of the 2020 pandemic. Touch, feel, proximity to brands physically, often in shared social spaces are all elements that have become anathema in light of COVID-19 and the accompanying buzz-terms – social distancing, shielding, lockdown, etc.

People are not frequenting the locations that experiential activations commonly inhabit – malls, railway stations, prominent shopping streets. This puts brands in a difficult position if they are invested in and running expensive experiences that are now shuttered. Even with restrictions having lifted through the summer, and although footfall has increased in retail environments, the possibility of imminent second wave lockdowns and resumed consumer cautiousness, along with the practicalities of making such experiential spaces as COVID-safe as possible, likely mean that the case for such endeavours is simply not there anymore.

If consumers are not going to visit such spaces in worthwhile numbers to justify significant investment, the onus on retail brands is to expand opportunities for consumers to have “experiences” at home. The social media and app-enabled aspects of experiential marketing activations are an element that is well capable of delivering clever, innovative, and engaging branded experiences in the home. The trick will be to come up with ways of doing something different – going beyond the basic “scan a label/QR code, etc.” approach that can showcase a brand/product and encourage peer group sharing and discourse.

The key audience groups for experiential marketing approaches are clearly showing attitudinal and behavioral changes that will both hurt “experience rooms” and similar branded spaces, while also favouring greater creativity online. GlobalData’s 2020 COVID-19 Recovery Tracker survey found that over the observed eight week period in Q3, significant shares of Generations X, Y (Millennials), and Z (iGen) in the USA, one of the worst hit nations, reported that the experience of the pandemic would encourage them to spend significantly more time browsing social media in the future (17%, 20%, and 18% respectively). This long-term expected change in behavior is indicative of the likelihood of a more home-based, virtual approach to socializing.

Experiences in the home will become more dependent on replicating facets of the out-of-home activation. Food and beverage tastings – via tasting boxes for example – in the home could be combined with a live community aspect and app-based interactivity. Also, the experience of life during the pandemic should inform the messaging and focus of activations. How a brand relates to a consumer’s pandemic era life is important in making it relevant. Brand voices and activities should be supportive and acknowledging of the challenges, even if they also offer escapism.

Overall, how this area of experiential marketing will develop or rebuild after the pandemic is a question to be answered in coming months and years. What is clear is brands that have increasingly experimented with such approaches and maybe planned them for the future may need to reassess their usefulness and/or reorient their efforts to a consumer base that is spending more time at home and finding social connection online than wanting to visit arty, tech-friendly spaces where social distancing may be a challenge.

Free Report
img

Spot leading innovative companies with GlobalData’s Innovation Scorecard

Innovation remains a necessity in a disruptive ecosystem, as continuous innovation allows companies to adapt, evolve, and grow through disruption. Using our in-house alternative datasets, we are excited to launch GlobalData’s Innovation Scorecard. This scorecard will allow clients to rank 3,500+ companies on their innovation activity, impact, and disruptive potential across geography, sector, and theme. The scorecard provides a data-driven framework to rank leading companies on the potential of their intellectual property (IP) portfolio. GlobalData’s Innovation Scorecard focuses not only on the activity of innovation in the organization but also on its impact and disruptive potential using the 3I framework: Intensity, Impact, and Ingenuity. The tool helps clients to identify the most innovative companies that are disruptive leaders and challengers and can create alpha for their portfolio using the insights driven by 19+ high-value KPIs. Download our report to find out more about this innovative tool. Key findings derived from this tool include:
  • Alphabet, Tencent, and Qualcomm are the top three innovative companies in the last 10 years
  • The scorecard finds Technology & Communications and Pharma & Healthcare as the two main sectors driving innovation
  • Loreal placed as ‘Disruptive Leader’ in the Consumer sector, while Revlon has been identified as a traditional laggard
  • Companies such as Etsy and H&M are challenging retail ‘Disruptive Leaders’ Amazon and Walmart
by GlobalData
Enter your details here to receive your free Report.