Indestructible Brands – D Shivakumar at 2nd National Leadership Conclave

Below is an excerpt from the speech of Mr. D Shivakumar, Chairman and CEO, PepsiCo India Holdings Pvt Ltd at AIMA’s 2nd National Leadership Conclave on the theme “Indestructible Brands: Building Brands to Survive Disruption”.

D Shivakumar at AIMA's 2nd NLC

D Shivakumar addressing AIMA’s 2nd National Leadership Conclave

A digital society changes the way we live work, relate to brands and to each other. We become far more horizontal in the way we work, end of the chain. It’s not a vertical society anymore. India has for a long been a vertical society. Hierarchy somebody orders somebody to do it. And then we follow their order. That’s not true in a digital society. Almost every activity and transaction is horizontal and not vertical. That’s the first point I want to make. The second point I want to make is if you look at the top 10 populations of the world for the last 10 years, Facebook has 1.5 billion subscribers or users and 70% of them come back almost every day. WhatsApp has a billion people. Twitter has 600 million people. Instagram has 400 million people. Now we are conversing individual to individual, group to group, completely on the social network, completely digital. This is what we are seeing right now.

Technology increases at absolutely no cost efficiency of our personal life. If you want to go home now or you want to go your office just step out and within 10 minutes you have a “Uber” waiting for you. You never had that facility. In the past, it would be tough for you to get your driver here within 10 minutes. So now we have somebody coming picking you up and dropping you at very little cost. So it’s amazing how much technology has done in such a short span.

If you look out 2025, eight years from now and this is a study done by the world economic forum.

  • 10% of clothes worn in the world will be connected to the internet. 91% of people believe that in this group.
  • 90% of people will have free storage space and 91% of people believe that.
  • One million sensors will be connected to the internet. 89% people believe that.
  • The first robotic pharmacist in the USA will happen. 87% of the people believe that.
  • 10% of reading glasses will be connected to the internet and about 86% of the people believe that.

These are the fundamental shifts for society and for engagement and everything that you want to do.

What are the jobs which are least prone to disruption? The same group has a list of jobs that are least prone to disruption. First is a social worker. Second is choreographers because you can’t robotize it. Next are Surgeons, Psychologist, HR Managers, Sales Managers and finally CEOs. Now if you look at this list everything has to do with human emotions. Everything to do with people to people, person to person, you can’t truly automate it when emotions are involved. And I believe the whole concept of a brand in future world will be the combination of these two. What can be automated will be automated and what cannot be automated will rest in a deep emotional area. We always said that the consumer is king. I have said this from the time I was a brand manager 20- 25 years ago. You know what, no brand marketers or no company

We always said that the consumer is king. I have said this from the time I was a brand manager 20- 25 years ago. What no brand marketer or no company factored in for is the consumer with a voice and that is exactly what is happening in the digital world in social. A lot of you might not know me but at the end of the session today, you will be a critic or a fan. My reputation will be built on what you tweet and what you say. That is what life is about. The consumer today has a voice and brands have to factor that in almost every day. Every day there is a consumer complaint. Every day there is something going wrong. A group of consumers gets together, in a sense social and digital has given consumers the opportunity or the platform to form a union virtually. A virtual union. Are brands prepared for that? I don’t think so. Most brands can’t even think like that. They have to track it almost on a daily basis. What has this done significantly? It has resulted into more transparency. Consumers want more information. So this mystique of this is my unique product,  unique formulation etc. Consumers don’t want that anymore, they want full disclosure about the product, everything.

Secondly, it’s not a brand talking about product quality and performance anymore. It’s peer to peer comparison on product performance. I think this product is good you should try it that’s what is working. It’s not brand saying I am better than somebody else. And finally, there is significantly more data in the supply chain. The bar code change retailing, the consumer wearables and things like that will change the way consumers react and attract. The whole concept of shopping, use and ownership especially in e-commerce, a fundamental shift in the way you know it’ll affect the brand. Consumer expectations are now much more about experiences. Consumers are visually willing to express a lot more about their experience with brands. Brand equityis very tough to win and very easy to lose. One day you do something wrong, you don’t address the consumer issue; you can lose it almost overnight. We have seen this happen with many people.

So for brands, talent will continue to be critical. You can have a great brand, great emotion but the people managing that will continue to be critical because you cannot manage brands in an isolation, you need some great talent for it. This is something which is very important. Herbert Simon who was a Nobel Prize winner in Economics said, “A wealth of information creates a paucity of attention”. This is happening to consumers right now. The more information they have, the less attention spans they have. So take an audience like this. After 5 minutes most of you will reach out to your phone, irrespective of what is happening. So we are going to live in a society where consumer attention is going to be a challenge. It’s not in the minutes you are talking about, it is virtually also in seconds. So the creative for a mobile world I believe will be very difficult. Traditionally we told a story and ended the story at the end of 30 seconds or 45 seconds. In digital world you have to get your story on your main message in the first 2 to 5 seconds. And the consumer has 5 seconds after that. So like T-20 in cricket, I believe the new format in advertising in social and digital is going to be T-10. 10 seconds. So all the creative people have to completely re-imagine what they are going to do. So you tell the story in the first 2-3 seconds and it has to be visually arresting. And then you conclude in the next 5- 7 seconds. This is what you are noticing in all the good digital advertisments right now.

I have got a few examples from Facebook. Knorr noodles is talking about long noodles. The guy in their advertisement keeps slurping and doesn’t stop for 10 seconds. Simple 10 seconds and story is told with one visual, far more effectively than ever before. So that is the world we live in.

I will conclude by saying that we are going to be in a horizontal societyand you are already seeing that. In corporations I see more of it. Today young people do not accept hierarchy. So the whole concept of horizontal society is what you will see with digital. Secondly the more information you have, the less attention people will have at any point of time. So how do you grab the consumer’s attention who is constantly seeking more transparency and more information but does not have the time to engage with you. T-10 is the new T-20 and you will see more of this so if you are  a brand owner, start asking your agency and brand team to start thinking like this. After television, investment in social media has the best impact in terms of incremental reach. 4.7 percentage point according to the research done by the social media guys. And we need to figure out how we need to tell a story in reverse in advertising right now in social media. Thank you very much for my attention.

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