April 30, 2020

How COVID-19 is Impacting Small Brands

by

Joy Corkery

Small brands are on the edge due to the devastating effects of COVID-19. Discover how they are seeing the light at the end of the tunnel with brand marketing.

A $109.5M loss in the business travel industry is expected in Europe as a result of COVID-19. The general travel industry in the US is expected to lose $910B. That is beside the $225B loss in the restaurant industry in the US, the huge losses from the automotive industry in Europe, and all the other major hits industries are expected to take worldwide as the pandemic continues.

We can speculate when all this will come to an end, but, essentially, brands are in limbo when it comes to knowing when business will pick up again. While this uncertainty may be difficult but not detrimental for the Nikes and Apples of the world, unfortunately, some smaller businesses are hanging on the edge and crisis communication plans are coming into play.

However, there is light at the end of the tunnel and it’s called brand marketing. Now, more than ever, brands need to think long-term. While a cut in branding and an increase in performance marketing may have cut it in the last recession, what brands need to do to survive 2020 is stay present. As group sales and marketing manager at hospitality company Moriarty Group, Helen O’Dowda, put it: 

Now is the time to think outside the box, of ways we can remain human with our audience in a bid to help where help is needed, in a bid to be the voice of reason and consistency in a time of uncertainty, and in a behind-the-scenes bid to come out on top when this crisis subsides and we are all functionally back in business.”

This article is to help small brands think outside of the box and see that light at the end of the tunnel. How? By going straight to those who are shining that light. The first half of this article will focus on a survey we ran asking consumers where they are most likely to return their spending. It will then continue by offering advice from the small brands who are currently focusing on their long-term goals and making things work.

Expected Consumer Spend in the Aftermath of COVID-19


We asked 1100 respondents across the United States, the United Kingdom, Australia and Canada

“Think about when COVID-19 is over. Which of the following areas are you most likely to return your spending towards?”.

The results across the four countries flip-flopped between two main industries: travel and restaurants. Most people in Canada and the United States will spend on restaurants, with results of 33% and 55% respectively. Travel was not far behind for 25% of respondents in Canada, while the US saw a bigger gap with 22%. 

Covid-19 impact on small brands statistics


Respondents in Australia and the United Kingdom are setting their sights on travel once restrictions are lifted, with numbers at 27% for both countries. Restaurants sat at a comfortable second place for both at 20% and 25% respectively.  

Covid-19 impact on small brands data


We also provided the following options to respondents: Sporting Events, Cars, Cosmetics, Furniture/Interiors and Museums. Here is how these categories performed for each country.

COVID-19 impacting small brands country data


It is clear from the results in the charts above that some industries don’t hold as much importance as others. However, that is not to say that brands operating in these industries should give up. Instead, what these results indicate is that brand marketing should be of the uttermost importance to them in the weeks/months to come. With studies showing that 43% of consumers find it reassuring to hear from brands they know and trust during these uncertain times, brands need to stay relevant and in the public eye if they want to succeed in the aftermath. 

Our survey did not include all industries likely to see an increase in spending in the aftermath of COVID-19. Our respondents were aware of this and, what we didn’t disclose earlier is that one of the most popular results in our survey was the option “None of these”. 22% of Australians choose this option, 20% of Canadians and British respondents, and 20% of those surveyed in the United States. If you were becoming destitute that your industry was not sitting high in our charts, this result shows that it is an open game for brands to regain custom - if they play their cards right now.

Continue reading to discover how small brands are working their way through this COVID-19 induced recession to come out thriving on the other side. Plus find out which are the industries surprisingly growing and why.


How Small Brands Are Using Long-Term Strategies to Win

Brands Are Switching Their Content Marketing Focus

Content marketing helps build a brand identity in the best of times, but it is an essential tool when it comes to readapting an entire strategy in times of crisis. Before COVID-19 became a pandemic, employee time-tracking software brand, Time Doctor, was creating content about co-working spaces. But with the social distancing mandate, co-working spaces or traditional office working spaces became impractical and unreasonable. In the spirit of staying safe, the content creation team began creating content around remote work strategies and best practices. 

This switch has helped us build brand awareness and trust,” said Content Marketing Analyst, Chioma Iwunze. “Even during this tough time, the company has seen an increase in sales and subscriptions thanks to the team working tirelessly to support their prospective and existing customers. The observation of social distancing has brought about a rise in the demand for time tracking and employee monitoring software so we also saw this as the best time to up our quality assurance game. The goal is to ensure that employers can keep track of how much time employees spend at work and how productive remote employees are. In other words, the company wants to simplify employee management for managers, especially while COVID-19 is transforming the nature of work. So far, the sales team has helped dozens of businesses make the difficult transition from traditional office setups to remote workspaces.” 

Content marketing can create a brand identity that defines your value. Time Doctor has done well in showing value to its customers beyond its traditional uses. Take the time to consider how your product can still provide value to your customers during this turbulent time. 

Sell Your Value Long-Term

Business and education app downloads have surged since COVID-19 hit. During the first half of February, these apps saw the biggest surge of downloads ever. Something similar happened in Italy. During the first week of March, 761,000 downloads of business apps occurred across iOS and Google Play in Italy — marking it the biggest week ever for the category. These increases don’t come as a surprise. People are scrambling to find ways to entertain themselves as more and more countries go into lockdown across the world. However, an increase in turmeric-based products was probably not expected. 

TurmeriX is a 100% Australian owned company that makes a range of turmeric-based products including plant protein, chai, hand cream, and soap. They have had to cancel the events and expo component of the business, which have been a vital part of their sales efforts since the company’s launch four years ago. However, sales have significantly increased as customers turn to natural healthcare remedies to boost immunity during these times. TurmeriX founder, Errol McClelland, told us that in the last six weeks, the company has had a 30% increase in online sales. 

Pure Synergy, which sells organic supplements that boost immunity, have had a 300% increase in sales since COVID-19 hit while the usual cold and flu season only brings a 20% increase in sales. 

No doubt this surge has brought many first time buyers to TumeriX and Pure Synergy. While naturally, companies will want to focus on producing more of their product to meet the demand, this is also the perfect time for them to work on their brand. Right now, buyers of natural products are seeing just the short-term value - getting them through the COVID-19 pandemic. Smart marketers will start convincing these new customers of the long-term value of natural products after the crisis has ended, turning them into loyal customers by providing support and essential information during these difficult times.


No Budget? No Problem! Use Social Media

When we think of brands that will be impacted by COVID-19, we often think of consumer brands selling cosmetics, advertising space, etc. But there are other types of consumer brands that are also negatively affected.

Musculoskeletal Australia is a consumer not-for-profit who have had to cancel their fundraising initiatives for the year. They have also experienced an increase in calls to their helpline, which supports people living with a condition who are in fear of the virus and suffering from, sometimes, severe anxiety.


Social media is an easy tool to keep the interest in your brand alive
Social media is an easy tool to keep the interest in your brand alive


The reality is that COVID-19 is going to push most non-profits to the very edge. Some are already reporting possibly detrimental losses. Having to reschedule the second week of its program to August has already meant that the Cinequest film festival would take a financial hit of between $750,000 to $1 million. Likewise, the Hammer Theatre Center in San Jose has already lost $45,000. That number will rise to $75,000 if all of its programming through early April is canceled.

Will people still want to attend rescheduled programs? Not-for-profits who have already suffered should work on keeping brand awareness and interest alive over the coming weeks so they can work to regain losses when things recover. Creating content about their shows on social media is an easy, and free way for them to do so. 

Staying in the Mind of Your Target Audience

If your brand sells clothing or is a travel brand, things will likely pick up again quickly once COVID-19 is contained, to some extent, at least. But what happens when your company/brand is just one person and depends on one-off events? 

Chris Longhurst is an Australian civil celebrant and the bulk of his business and revenues come from officiating weddings and funerals. His business is being impacted by the limit on numbers of people attending public gatherings in enclosed spaces which currently stands at 100; and in all likelihood, will drop to 50 quite soon.

The concern for me and other service providers in the wedding industry,” says Chris, “is what to do with gatherings of more than 100. On average, the size of weddings guest lists is around 80 - but that is an 'average'. What I am finding is that couples who have weddings set for April are, where needed, culling the list or postponing the wedding. How am I keeping afloat? I have maintained my advertising schedule. This is expensive in scale of current business revenue, but it will pay off when the market recovers. Basically, I will have to 'ride it out'.

Oli is the wedding photographer behind the brand Briars Atlas. He is maintaining his brand by being an educator in his space: “I'm giving free online workshops to photographers globally, to make the best use of their downtime, and further support their couples.

No matter if your brand is run by one person or 100, the steps Chris and Oli are taking are the right ones: maintain in the public eye and continue to offer value. Just be sure that your marketing is sensitive to what is going on and you communicate with clients/potential future clients in the right way

Small Brands Are Not Pushing Sales

Large clothing brands are expecting a 10-15% drop in sales, while, in February, sales for Chinese Starbucks stores dropped by 78% in comparison to the previous year. If smaller brands are to experience the same losses, the end result could be detrimental. So, what are they doing to fight this?

They aren’t pushing sales.

Kas Andz, Director of Kas Andz Marketing Group, believes this is the right thing to do for the brand in the long run.

"We've tailed off spending on paid traffic,” says Kas, ‘as we feel we aren't going to generate a lot of inbound leads this way. We also use cold email for client acquisition  (which is expected as our specialty is email marketing!), but we're being a bit more tentative with our approach. We are acknowledging that we're in uncertain times, and not pushing for a sale as much as we normally would. We may not make a sale right now, but confident we can turn some of those businesses into paying clients later down the road since we have been a bit more sensitive."

Don’t be the pushy company. This is especially important for B2B companies where contracts of thousands of dollars are at stake. Be the company that is sympathetic toward the current plight of potential customers. Support them as best you can without charging a fee, but, of course, without putting your own company at stake. Now is the perfect time to build relationships that will pay off further down the line. 


Brands are helping the community with free online tools
Brands are helping the community with free online tools


ORIGO Education is another company shifting its focus to building strong relationships. The team at ORIGO is focused on ensuring their brand remains healthy by showing the world that it is genuinely helping the community it serves. With over 70 countries around the world closing their schools due to the Novel Coronavirus, ORIGO Education has decided to step up and do what it can to help the community, especially mums and dads at home with kids needing to continue their education.  As such ORIGO Education is set to launch a free online resource aligned with the primary school curriculum.

The online resource will contain daily activities designed for use by a caregiver or remote teacher who is away from their school. It will also be particularly helpful for those in communities and schools that may not have the infrastructure to support digital classrooms.

Brands Are Switching Up Their Strategies

If small businesses go under, the effect on the economy will be much bigger than we think. A recent article by the BBC stated that there were 5.8 million small businesses in the UK at the start of 2019. These businesses employ 16.6 million people, have a 50% of the turnover in the private sector, and have a £2.2 trillion estimated turnover. 

So, what are these businesses doing to avoid crashing? 

Krista Neher, CEO of Boot Camp Digital is a digital marketing training company, where most of their revenue and business comes from in-person speaking and training workshops. They had to cancel their San Francisco workshop and all corporate clients for the next 3 months were postponed.

But, as CEO, Krista Neher, says: “you can't wait for a silver lining, you have to create one.”  

We've shifted our focus and all of our marketing efforts,” says Krista. “We are now focusing on online training and increasing our marketing efforts across every aspect of our virtual services. We've already seen growth in our online sales (after 2 weeks) but it wasn't just a tactical effort of sending an email or a few social media posts. We looked at our marketing plan and made changes at every single touch-point strategically. We will likely replace the revenue loss within 1.5 months by quickly shifting and taking action. We also used this as an opportunity to help others. We made use of our experience of running virtual events for 12 years and participating in over 1,000. We offered advice, tips and even use of our platforms to people needing help in quickly shifting their events. While it doesn't generate revenue, it does create some good in the community.”

Online selling seems to be the best bet for smaller brands right now. Like Boot Camp Digital, crowdy.ai, also don’t seem to be taking much of a hit right now. Carsten Schaefer, Founder and CEO, told us:

So far, we haven’t been affected much by the coronavirus. I would say that there is about a 10-15% drop in new app signups and revenue. Most of the companies that use our product use their websites to sell products and services. They have taken a hit but not as much as those with brick and mortar stores, so we haven’t felt a significant decrease either. I have a feeling that we won’t get affected so much since we work online and deal with a software product.”

Now is the time for your brand/marketing team to do what they do best - get creative. In most cases, there is an “outside the box” solution. What might be a means of survival for your brand now, could be an entirely new business line in the near future.

Brands Are Diverting Budgets

Hundreds of thousands of staff have already been laid off as a direct impact of COVID-19 - and that’s just in Ireland. The loss of employees by many companies will be a big loss as they continue to build strong brands. A similar loss is the new employees companies were planning on hiring in the coming months. If you are a brand that has to make these terrible decisions, try to divert budget and resources into something that will be worthwhile in the end.

Maksym Babych, CEO at SpdLoad, told us: “At the moment, we are shifting investment from recruiting into marketing. We are currently investing in the marketing strategy that was approved in September 2019, without changing focus or adding new directions. No matter if the reason for doing so is completely valid or not, news of a big employee cull will have a negative impact on brand perception. See if it is possible to cut costs elsewhere first." 

"We are also engaged in optimizing operating costs,” says Maksym, “and are negotiating with our suppliers on the mutual sharing of losses caused by the coronavirus.”

Companies changing how they spend their money can have an impact on other brands, especially in the B2B sector. Like at Tidio, where many of their users use dropshipping as their business model and Shopify as their platform.

 “Right now they are cutting down on their expenses so we are losing some business,’ says Head of Growth, Pawel Lawrowski. “But there is also the other side of the coin - an influx of users of a completely new kind. Because of the coronavirus lockdown, schools, restaurants, and government institutions use our app. This is very refreshing and positive. They are all figuring out completely new and wonderful ways of using it."

For example, here's how one of the local universities had decided to use it to answer future students' questions as they had to cancel their open days.

 

 


When there is a chance that big companies like Canon and Nixon can go under due to the impact of COVID-19, what hope is there for small brands?

The answer is that small brands stand the same fighting chance as the Apples and the Nikes of the world. Our survey provided some insight into the industries that are set to experience increased spend once the pandemic has calmed. However, what is most beneficial is to see how small companies are working on long-term brand building to come out strong at the other end. Take their advice and you will be sure to see more positive results than initially expected.

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