Guest article by Torsten Dietz in W&V

At a time when the global economy and social stability are being challenged by ongoing crises, companies are facing a revolutionary change in brand management. The trend towards sustainability, conscious consumption and a redefined understanding of luxury demand more from brands than mere promises. What is needed are genuine values, transparency and a deeper sense of purpose in all aspects of brand identity. Strong brands are necessary to convince consumers in the long term and to justify higher prices. Authentic and value-based brand communication is becoming a decisive factor in the success of a brand.

A new era of brand management: authenticity and responsibility

Global and economic challenges, increasing awareness of the climate crisis and the resulting conscious consumption characterize the new understanding of luxury and the demand for meaningful products. These developments herald the end of superficial brand promises and make way for deeper substance, increased transparency and a stronger value orientation that permeate all facets of a brand.

Global uncertainties such as wars and natural disasters, as well as persistent inflation and the threat of recession, are having a significant impact on the propensity to spend. Consumers are making conscious decisions about where their money goes. This change in awareness has a direct impact on brands and their communication: consumers are prepared to pay higher prices for products – provided they can rely on the product and brand to communicate authentically and honestly and to represent the ‘right’ values.

From ‘having’ to ‘being’

The transformation in the luxury segment reflects this change very clearly. While traditional luxury was often characterized by owning expensive cars, clothes and jewelry, today the personal experience counts more than material possessions. Brands that offer authenticity, sustainability and uniqueness are replacing the old bling-bling luxury. The focus is on origin, production methods, meaningfulness and substance. Individual experiences and a sense of belonging to a community are becoming more important than mere ownership. The choice of a product is becoming a question of identity that no longer signals ‘Look what I can afford!’ but ‘Look, I support this because it reflects my convictions.’ Luxury trends are increasingly influencing other sectors and it can be assumed that this trend will spread to the entire consumer sector.

Honesty is essential!

If you recall the numerous examples of greenwashing in recent years – from fast food to mineral oil and gas companies – you have to ask yourself to what extent the respective brand managers are honoring the future of the company and of human existence as we currently know it. In the future, a strong brand will only be able to be created and maintained through continuous behavior that makes use of three essential pillars: relevant brand values, sustainability and transparency.

Brand managers need to reflect on which values they embody and how authentically they do so. Creating a vibrant brand with an appreciative community starts with genuine brand values. Brands need to position themselves clearly and explain why they are the right choice, not just about the product but the attitude behind it. Consumers today expect brands to act in a socially, economically and environmentally sustainable way. Companies need employees who integrate this awareness into all processes and make sustainability measurable. Many companies are still struggling with unstructured data and insufficient digitalisation, which makes transparent communication difficult. The future EU Green Claims Directive will force brands to provide precise proof of sustainable claims. Only transparent brands will remain competitive in the long term.

From the inside out

Values and brand essence must be tangible for consumers. ‘People don’t buy what you do; they buy why you do it.’ These words by Simon Sinek make it clear that the core of a brand, its ‘why’, is crucial. The connection to consumers, the ‘how’, and the products themselves, the ‘what’, must consistently reflect the brand values. The harmony of why, how and what forms the ideal path for brands that focus on authenticity and values.

If the answer to these questions is profit, price and sales, the brand is interchangeable, the messages are interchangeable. Strong brands, on the other hand, have integrated the proverbial why into their brand identity – a vision and usually also a person behind it: Apple had Steve Jobs, Chanel had Coco and Karl, Meta had Mark Zuckerberg. They all had a vision, something that would make the world a little bit easier or more beautiful. Because visions have to inspire people, have to grab them, have to have the aforementioned ‘reason why’. And this centerpiece of the brand sells like hot cakes. Whether it’s comfortable corset-free fashion to give women freedom, PCs for the masses to challenge the status quo, thinking differently and creating beautifully designed products or the intention to create the most customer-orientated company in the world: The reason why made them what they were. The vision became a lived brand essence in every touchpoint with the customers and was supported and implemented by the employees.

Brands must therefore show their colors more clearly and consistently than ever before with regard to their original vision and their target group. The clearer the definition, the clearer the brand image and the more likely the success.

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