Looking ahead to 2023, what new developments will there be in consumption growth and brand marketing?

As the epidemic is eased, what consumption growth and marketing trends will still be certain in 2023? The Community Marketing Institute will share some inspiring views with readers based on the Questmobile agency report. Let's take a look.

2022 will be an extraordinary year for both the consumer and advertising industries.

This year was a year in which consumer investment cooled and consumption was predicted to be pessimistic; in the same year, camping, pre-prepared meals and other sectors that were once considered "hot spots" remained as hot as ever, and a healthier industrial ecological environment was nurtured.

This year, the Winter Olympics opened the year and the World Cup ended the year. The unprecedented sports year boosted the outdoor consumption boom, and niche outdoor sports continued to gain popularity. In the same year, Liu Genghong, through his own efforts, made home fitness a popular sport.

This year, existing business models are still breaking boundaries. Far-field/near-field e-commerce is accelerating integration, social platforms are accelerating video/e-commerce/live streaming e-commerce, offline retail continues to differentiate into membership/discount store models, and the catering industry has initiated an online/offline integration transformation.

This year, brands shifted more resources from online broadcasting to self-broadcasting, and placed more emphasis on sales conversion; against the backdrop of a general downturn in the advertising industry, the offline media industry rose against the trend, winning increased investment from many advertisers, especially food and beverage companies...

1. Communication points are fragmented and scenario-based, and decision-making links are more disordered

Over the past year, the communication points between brands and consumers have become more fragmented.

Online attention is more diluted and traffic costs are higher, due to two factors:

• Social platforms are not satisfied with just dividing the cake of the grass-seeking link, and are accelerating monetization, competing with traditional e-commerce and emerging e-commerce through video/e-commerce/live e-commerce and other businesses;
• The e-commerce camp is also not idle. The integration of far-field/near-field e-commerce platforms is accelerating. Tmall launched instant retail business, JD started its own retail business (JD Supermarket & JD Department Store), Video Account started live streaming, Xiaohongshu accelerated the release of video works/built its own mall, Douyin not only built its own mall but also used group purchase coupons/cooperated with Ele.me to develop in-store/home delivery business, and even Bilibili is accelerating the short videoization...

The change in perception that this brings to consumers is that more and more topics on social platforms are mixed with merchant marketing content, and they need to listen to experts/self-learn to screen products. In addition, more and more categories can be screened based on price, quality, service, and reputation on different online platforms, and the decision-making chain has become more disordered.

After offline retail was suspended, growth focused on more certain consumption scenarios:

First, more and more industries, such as baking, hot pot, and stewed food, have opened brand chain stores in communities. This is not only because, under the competition of new consumer brands in the past two years, the high-quality business districts in high-tier cities have been saturated, and they have to bear the high rent and labor costs of lockdowns; but also because consumers have developed a habit of consuming closer to home and better in some categories, such as fresh food.

Second, in addition to the increasing density of brand chain stores in communities, the business forms and retail formats of large business districts, city squares, and urban suburbs are still being reshuffled. High-quality business districts must not only evolve towards the latest/trendiest (such as hosting exhibitions/concerts/opening pop-up stores, etc.), but also have enough differentiated formats (to be competitive with both offline retail peers and e-commerce). For example, the high-end SKP Chengdu project, which opened not long ago, focuses more on beauty, footwear and apparel categories, and holds a large proportion of buyer stores, while the catering format is only allocated to high-end coffee and baking brands.

This will change the perception of consumers. In order to meet the needs of people with different spending power, meet the needs of different categories under the same spending power, and meet the needs of the same category in different channels, the retail format will continue to differentiate into new forms, such as membership stores/discount stores, Starbucks selected stores/traditional Starbucks stores, boutique fruit stores near home/community group purchase of fruit...

These examples of coexistence of forms all prove that even if it is the same group of consumers holding hundred-dollar bills (such as young people who have just graduated), even if they only have demand for specific categories (such as coffee), due to the dispersion of communication touchpoints, it will also bring very uncertain traffic to high, medium and low-end channels (whether it is a high-quality business district that radiates the entire city or a business district that radiates 3-5 kilometers in the urban area)/for brands in specific channels (choose Luckin Coffee or Lucky Coffee or McCafe for a street shop)/for brands and their different store types (Starbucks Reserve or Starbucks large store)/for products of different specifications in different channels (American espresso or hand-brewed).

Online and offline traffic tends to be fragmented and scenario-based, and consumers' decision-making behavior appears more "irrational" and "disorganized ."

Taking coffee as an example, the following purchases are very common: before the Double Eleven promotion, I accidentally came across a live broadcast room of a celebrity selling goods while watching short videos, and I stocked up on a bunch of premium drip coffee; the next day it rained, and Luckin Coffee’s official WeChat account pushed a discount coupon for rainy day consumption, so I ordered a cup of coffee as a hand warmer; after the rain finally stopped, I made an appointment with friends to go to a newly opened business district, and the coffee shop that offered “first store in the region” and “discounts upon opening” was hard to refuse again…

When consumers’ attention is so divided, what can brands do?

2. What marketing strategies can brands use in 2023?

1. Focus on traffic hotspots and take advantage of them

The one-cent pickled fish made Luo Min's new venture, Qudian, popular. Its Douyin performance is enough to let people see that by making the best use of public domain investment and private domain drainage on Douyin, it can create a considerable consumer market.

However, this kind of traffic grabbing out of nothing is unsustainable after all. More mature brands should first learn to take advantage of the situation, especially in 2022 when major events are constantly taking place. In terms of taking advantage of the situation, whether it is the Winter Olympics at the beginning of the year or the World Cup at the end of the year, they are both very valuable opportunities for brand exposure.

According to Questmobile statistics, the most active industries in sports marketing in 2022 are food and beverages (33.3%), clothing and luggage (16.3%), IT electronics (8.5%), and home appliances (7.1%), and the majority of cooperation methods are commercials (39%), theme activities (19.9%), and endorsement marketing (8.5%).

It is worth mentioning that on the world stage, in top events that bring glory to the Chinese people, the patriotic sentiment of the Chinese people is unprecedentedly high. Which stars can better fit this positive sentiment are more likely to win the favor of brands. According to Questmobile statistics, the athletes that brands like to cooperate with and keep signed in 2022 are Gu Ailing (28), Su Yiming (11), Wu Dajing (9), Su Bingtian (7), and Xu Mengtao (6).

2. Launch co-branded new products to reach both audiences

In addition to taking advantage of specific traffic points, more regular and high-frequency brand collaborations are also becoming common practices. Judging from the performance of brand collaborations in the past year, in addition to achieving two-way reach to respective audiences through brand*brand (54.3%), brand*image IP (29.1%), brand*content IP (8.4%), and brand*channel (8.2%) collaborations are becoming more and more common.

Brand co-branding is becoming more common, driven by the following factors:

• Young consumers prefer co-branded products. If a new product is co-branded, it is easy to create a hot topic out of nothing, such as the Coconut Cloud Latte co-branded by Luckin Coffee and Coco Tree. Therefore, brand co-branding is also naturally suitable for industries with a faster pace of new products, such as food and beverage (25.7%), beauty care (13%), and clothing and luggage (12.6%).
• Brand co-branding can reach each brand’s respective audience. The essence of more diverse forms of brand co-branding is to extend the vitality of powerful IP and expand the rich connotation of the brand. The phenomenal ones in the past year include: Pizza Hut*Genshin Impact, Erke and Honor of Kings, Holiland and Harry Potter, Heytea and Menghualu, etc.

According to Questmobile statistics, among the above phenomenal brand collaborations, Holiland*Harry Potter, which has the lowest reach ratio for people aged 24 and below and 25-30, has 53.2% and 23% respectively. Holiland has a 20-year history of opening stores, and Harry Potter's core fans in China are mainly those born in the 1980s and 1990s. This overlap in generations will arouse a high degree of nostalgic resonance.

A more illustrative example is Genshin Impact.

About 30% of its users are in China, and according to Questmobile statistics, the proportions of people aged 24 and below, 25-30, and 31-35 are 35.7%, 32%, and 25.7% respectively. Compared with other popular mobile games, the distribution of users at different age levels is relatively more balanced, but Pizza Hut*Genshin Impact has reached 59.1% of people aged 24 and below.

Although its domestic user scale (about 20 million) is smaller than that of Honor of Kings (about 150 million), after September (after the major update of Genshin Impact to 3.0), its discussion popularity on major social platforms has been higher than that of Honor of Kings and Peace Elite.

3. Use live streaming + new product promotion to improve sales conversion

What brands have most often said over the past year is that traffic is more expensive and every penny must be spent wisely.

So, which marketing methods can bring more intuitive sales conversions, and which can bring higher exposure? In the past year, efficient marketing methods that can bring sales conversions to brands include live streaming marketing (19.2%) and new product marketing (14.6%); efficient methods that can bring higher exposure include sports marketing (12.8%), endorsement marketing (10.1%), joint marketing (8.2%), and theme activities (7.5%).

Sales conversion + exposure cannot be neglected. If there is only conversion but no exposure, it is easy to rely on sales channels and lose brand influence; if there is only exposure but no conversion, the brand will have no cash flow and the production line will soon become unsustainable.

Therefore, a high-quality marketing strategy must be an organic combination of the two. For example, in May last year, Coca-Cola launched its first metaverse concept product, Rhythm, and was able to take advantage of the metaverse hotspot when launching new products.

At the same time, high exposure does not necessarily lead to low conversion. If the brand can leave a deeper brand image in the minds of consumers with the help of theme songs (32.3%), promotional videos (25.8%) and micro-films (16.8%), and use emotionally resonant and creative new media content to bring out the brand's consumption scenarios, it can significantly reduce its future decision-making costs: Gucci's "Love Story" presented for Valentine's Day, McDonald's and NOMOCAM jointly saved "waste films", and the opening of Jiang Xiaobai*Mao Buyi's Mood Tavern all illustrate this truth.

2023 has just begun, and we will look forward to brands providing more new marketing ideas.

Author: Editorial Department

WeChat Official Account: Community Marketing Research Institute