Mexico: Finding Growth Beyond The Comfort Zone
Managing Director Kantar Consulting Mexico, Central America and the Caribbean
Head of Brand and Marketing, Hispanic Latam
Our latest BrandZ ranking report shows a few brands leading the way in terms of brand value increase (such as Corona, Telcel or Citibanamex). Others have struggled to maintain a strong position amongst the most valuable Mexican brands (Televisa or Liverpool, for instance, losing significant momentum after previous years of growth). Along with learnings from new entrants (Elektra, Bachoco), new insights are emerging that help brands better equip themselves to learn from the present and build for the future.
Technology continues to play an integral role in developing more meaningful, relevant and differentiating customer connections, whilst continuing to drive and evolve a revolution in Mexico and Latam overall, directly influencing the way customers stay in touch, engage and interact with brands. Slowly, though. There is still much work ahead and many opportunities to pursue. Mexico’s society still depends largely on cash despite the various efforts of financial institutions, retailers, e-commerce players and telecom providers (the latest being Samsung Pay) to change the way consumers pay for goods and services. Still, a very large proportion of the population has no access to banking services and relies on cash, despite most young people using smartphones as part of their everyday social activities. Brands need to unlock relevant, simplified yet highly effective ways of securing this opportunity beyond traditional shopper schemes.
In fact, BrandZ shows how brands need to go beyond their comfort zone. The usual short-term, commercially driven perspective of Mexican businesses needs to shift towards a long-term, customer-centric vision. As consequence, companies that excel at anticipating future trends and driving customer preference will succeed, or at least be much better positioned for when disruptive competitors enter Mexico, when there is economic turmoil, or when corporate reputation issues emerge. This underlines the importance of continuing to invest in strengthening a brand’s position in the market; reinforcing customer preference and loyalty helps a company to minimize risk. Future anticipation means finding growth at the edges of businesses and their core capabilities, disrupting organizational structures and ensuring big data turns into smart data and is deployed across a company, with the customer at the very heart of it.
The fact that food and retail brands have been declining in value can be analyzed with the following statement. A retail-driven formula (channels, formats, ranges, pricing, promotions) will not be sustainable in the long term when compared to shopper-driven strategies (simplicity, convenience, predictive, seamless). Think more about experiences rather than product-related, commercially driven strategies to conquer customers’ hearts, their loyalty and their pockets.
Lastly, we can also identify the need for stronger transparency, authenticity and trustworthy communications, and for collaborative interactions and meaningful relationships between brands and customers. Action – tangible proof of companies’ value propositions or promises – need to follow the talk. Be it, do it, say it, is a mantra very few Mexican companies follow. The reward justifies the investment in developing customer-centric organizations.
This year’s BrandZ Top 30 Most Valuable Mexican Brands shows how testing these times are. In order to anticipate how best to create and increase value, we cannot ignore the fact we live in a new era of consumption. Demand has shifted but it has not disappeared. Growth can no longer be assumed, yet there are more, not fewer, opportunities to build breakout brands and create new lines of business.
In this world of shifting demand, the growth models of the past are no longer sufficient. Future growth exists, but beyond the comfort zone of most organizations; it is more granular, more difficult, and more opportunistic. It is time to rewrite the rules of demand – on how it is both generated and converted.