Citizen brands
CITIZEN BRANDS FIND BALANCED GROWTH IN AN UNBALANCED WORLD A new study and framework to help brand leaders balance consumer demands and societal impact
WHAT’S INSIDE Why contradictory consumer, societal and ““TThhiis ns neew sw sttuuddy iy is rs reeaalllly iy in tn tuunne we wiitth ch coonntteemmppoorraarryy economic demands are making it harder eeccoonnoommiic ac annd sd soocciiaal il issssuueess. T. Thhe de daatta sa shhoowws ts thhe ve viittaall for brands to achieve growth. iimmppoorrttaanncce oe of sf sttrriikkiinng tg thhe re riigghht bt baallaanncce be beettwweeeen tn thhee The Citizen Brands index, showing which vvaalluuees os of cf ciittiizzeennsshhiip ap annd td thhe ve vaalluuees os of tf thhe ee eccoonnoommyy.. global brands best embody the attributes of a ‘Citizen Brand’. ““FFoor a br a brraannd td tooddaayy, i, itt’’s a qs a quueessttiioon on of cf coonnvveeyyiinng ig ittss The material benefits of achieving brand balance vvaalluuees as annd md meeaanniinngg, w, whhiillsst at at tt thhe se saamme te tiimme be beeiinngg – including the fact that the top 20 ‘citizen brands’ aan en eccoonnoommiic pc pllaayyeer tr thhaat ot oppeerraattees es effffiicciieennttlly ay anndd earned £8bn more in yearly revenues on average gguuararanantteeeess qquualaliittyy.. than their lowest-performing counterparts. A new ‘Citizen Brands’ framework to help brand ““TThhe Ce Ciittiizzeen Bn Brraanndds cs coonncceeppt at annd td thhe de deevveellooppmmeennt ot off leaders balance conflicting demands and achieve bbrraannd bd beenncchhmmaarrkkiinng mg maakke ie it pt poossssiibblle te to mo meeaassuurre te thheessee balanced growth. aarreeaas as aggaaiinnsst tt thhe ee exxppeeccttaattiioonns os of tf thhe ce coonnssuummeerr. T. Thhiiss iinnnnoovvaattiivve ne neew iw innddeex ix is ds deessttiinneed td to bo beeccoomme a ve a veerryy Six drivers of success for the top performers iimmpporortatanntt f frraammeewwororkk f foror a annaallyyssiinngg e eccononomomiicc pl plaayyeerrss – and areas of focus for brand leaders looking to drive sustainable growth. anandd b brrananddss.."" 4 BRBRUUNNOO C CAAUUTTRRÈÈSS 202 SSENENIIOORR CN CNRRSS R REESSEEAARRCHCH FEL FELLLOOWW,, CEN CENTTRREE F FOORR P POOLLIITTIICCAALL R REESSEEAARRCHCH A ATT S SCCIIENENCECESS P POO CITIZEN BRANDS REPORT 02
EXPECTATION INFLATION EXPECTATION INFLATION EXPECTATION INFLATION EXPECTATION 4 202 EXPECTATION INFLATION EXPECTATION CITIZEN BRANDS REPORT 03
TION’ TION INFLA A T 01 CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPECWE’RE LIVING IN THE ERA OF And in the words of Queen and David Bowie, brands today are under pressure. Spiralling demands and shifting priorities mean we expect them to do and deliver a lot – from providing ever-better value and wowing ‘EXPECTATION us with new products and services to having a personality, a purpose, doing good. But that’s not all. We also expect them to turn a healthy profit whilst taking action on everything from climate change to equity and inclusion – stepping into a space formerly the reserve INFLATION’ of governments and civil organisations to make change happen. These pressures aren’t driven by consumers and conscious consumerism alone. They’re underpinned by the commercial demands 4 of investors and the growing expectations of employees, regulators 202 and society at large. This catalogue of expectations puts brand leaders in a difficult spot. How can they meet the needs of every stakeholder? What are the risks of over-indexing with one group and neglecting another? And how can they square conflicting demands to balance moral and commercial imperatives? These are the thorny questions that this study and framework tackles – and the questions that underscore CITIZEN BRANDS REPORT why this report is so relevant for brand leaders today. 04
To uncover the complex world that brand leaders are forced TION’ to navigate and to help them chart a way forward, we WE INTERVIEWED: INTRODUCING THE commissioned a bespoke study exploring the forces at play across stakeholder groups and cultures. TION INFLA A CITIZEN BRANDS T Supported by research partner Savanta and Gate One, Havas’ STUDY AND flagship management consultancy, we interviewed 105 brand leaders (senior marketeers working in large blue-chip 105 FRAMEWORK. organisations), 120 professional investors investing in large Brand leaders blue-chip organisations, and 5,300 people across generations – being at once consumers, future employees and representatives of general society. To reflect a global picture, stakeholder groups were drawn equally from the US, UK, France, Saudi Arabia and India. The study explored two areas. First, stakeholder attitudes and behaviours around expectations of brands today. Second, the specific perceptions of 150 brands to create a Citizen Brands CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC index. For this, we intentionally chose group/parent brands 120 with the scale to influence society and a visible presence in our everyday lives. Professional investors 5,300 People across generations 4 202 CITIZEN BRANDS REPORT 05
TION’ TION INFLA A T BALANCING SELF & SOCIETY CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC Against a backdrop of expectation inflation and conflicting consumer demands, brand leaders are encountering two powerful forces. Driven by increasing individualism and the global cost of living crisis, there’s a growing trend for consumers to focus on individual needs and what a brand can do for them. 4 This spans everything from personal utility to value for 202 money. But equally, there’s growing concern among consumers, investors and regulators around brands’ impact on society, CITIZEN BRANDS REPORT reflecting an increasing awareness of issues like climate change, social division, inclusion and equity. 06
TION’ TION INFLA A T SELF & SOCIETY & SELF & SOCETY SELF & SOCIETY & SELF & SOCETY CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC SELF & SOCIETY & SELF & SOCIETY SELF & SOCIETY & SELF & SOCETY 4 202 SELF & SOCIETY & SELF & SOCETY CITIZEN BRANDS REPORT 07
TION’INCREASING PRESSURE TO FOCUS INCREASING PRESSURE TO FOCUS ON SELF ON SOCIETY TION INFLA A T More Less More Less Value for money Environmental sustainability CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC49% 11% 47% 11% Innovation Social responsibility 49% 8% 42% 13% Inclusivity 4 202 KEY 42% 11% CITIZEN BRANDS REPORT Brand leaders are feeling more pressure 08 Brand leaders are feeling less pressure
TION’ EXPECTATIONS ON BRANDS TO ACT ON ISSUES RELATED OVER THE LAST 20 YEARS, TO PEOPLE AND PLANET ARE INCREASING TION INFLA Investors A LEADERS HAVE EXPERIENCED T WILD PENDULUM SWINGS 40% 41% 18% FROM ONE SET OF CONCERNS TO ANOTHER. Brand leaders 32% 53% 11% For a long time, it used to be that prioritising self over society was perfectly acceptable. Brands just had to focus on delivering a benefit to the individual, and make sure they did so profitably. CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC Then, societal needs swung into dominance. Brands started BRANDS ARE UNDER INCREASING PRESSURE TO MAXIMISE to focus on purpose above all else and everything from SHAREHOLDER VALUE mayonnaise to barista coffee had to play a world-enhancing role. (And profit would, the argument went, automatically flow Investors as a direct result of this dogoodery/virtue.) But when that didn’t work out, expectations shifted once again. 33% 46% 18% Brands are now expected to do both – and brand leaders are under increasing pressure to define a balance that allows them Brand leaders to deliver against serving both the individual and the societal. A pressure we see mirrored in investors’ expectations too. 36% 43% 12% 4 202 KEY Strongly agree Agree Neither agree nor disgree CITIZEN BRANDS REPORT Disagree Strongly disagree 09
TION’ALL THIS PUTS SELF VERSUS SOCIETY: TION INFLA A BRAND LEADERS A BALANCING ACT THAT T IN A TOUGH SPOT. ESCAPES MOST. Focus too much on serving the individual To date, few brands are getting the balance right, a and you risk alienating audiences that sentiment strongly echoed by investors. And consumers value the societal. are experiencing the consequences. Focus too much on the societal and you risk being accused of ‘woke marketing’, Only 27% of brand leaders and or, worse still, forgetting your shareholder responsibilities. 40% of investors think brands CHAPTER 01: WE’RE LIVING IN THE ERA OF ‘EXPEC get the balance about right.” IF FOCUS TOO MUCH ON SELF IF FOCUS TOO MUCH ON SOCIETY 71% of consumers say they are often forced to choose between % % quality/price and sustainability.” 94 87 To cap it off, there’s a strong feeling that these pressures are here to stay. concerned about not being seen to be concerned about being perceived as A combination of consumer sentiment, shareholder pressure, doing enough in response to key societal too ‘woke’ by focusing on societal and legislative environment and wider societal expectations have and environmental issues environmental issues combined to create a set of compelling macro forces. It’s little surprise that 80% of brand leaders and 71% of investors believe that the pressure to balance shareholder value with positively contributing to the world will only grow. 4 And getting that balancing act right won’t become easier. Some 202 65% of brand leaders and 69% of investors feel that balancing % shareholder value with ‘people and planet’ considerations will 90 become more difficult in the future. concerned about investors and CITIZEN BRANDS REPORT shareholders thinking they are focused too much on societal and environmental issues over profit and shareholder value 10
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02 CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETYCITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY 4 202 CITIZEN BRANDS REPORT 12
We believe the answer lies in escaping the tyranny of HOW ARE BRAND LEADERS polarity and evolving their brands to better balance Self MEANT TO NAVIGATE THIS and Society. Put simply, in becoming ‘Citizen Brands’. ERA OF CONTRADICTORY AND The idea is inspired by the historical concept of ‘citizenship’; INFLATED EXPECTATIONS? those fortunate enough to be recognised members of a society enjoyed a status that came with individual benefits as well as responsibility towards the wider collective. We’ve drawn from this concept to define Citizen Brands as those that find a balance between an individual agenda and being active contributors to wider society. To help tap into the potential of a Citizen Brand, we’ve CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY developed a brand and design framework to support balanced decision-making and help leaders thoughtfully design their brands to best balance Self and Society across the mix. 4 202 CITIZEN BRANDS REPORT 13
Three levers help embed the need to serve the individual: Three other levers help to serve wider society: THE SIX BETTERMENT INCLUSIVITY is about improving lives emotionally and functionally by making is about opening access and opportunity. We mean them easier, more enjoyable, more meaningful. It’s about it in the broadest of senses – designing products CITIZEN helping people progress in their lives. and services to be open and accessible to all. ORIGINALITY ENVIRONMENTALISM is to inspire with unique value; to bring something both unique is about promoting a sustainable view of growth BRAND and valuable to people’s lives. by taking action to reduce brands’ environmental impact, integrating sustainable practices into ways of operating, and building operational resilience. LEVERS ASSURANCE CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY is to reliably deliver and in so doing, win trust. It’s about CONTRIBUTION consistently meeting people’s expectations and delivering when and where it matters most. is being part of and providing value to society. That contribution may take different forms – be it economic, cultural or creative. The idea is that brands are productive members of society – active contributors not indifferent extractors. Our study explored attitudes to these levers across different stakeholder groups and markets. And the emerging picture is clear: investors, brand leaders and consumers all resoundingly endorse the six Citizen Brand levers. 4 202 CITIZEN BRANDS REPORT 14
THE SIX CITIZEN KEY CONSUMERS Essential BRAND LEVERS Very important 20% Fairly important/ 47% INVESTORS not important 23% 44% All levers are important, but some emerge 46% BRAND LEADERS as first among equals. Across markets, 44% Betterment (‘make my life better’) and 26% Assurance (‘reliably and consistently 49% meet expectations’) are seen by investors, 26% 47% brand leaders and consumers as the I 20% 24% T N most important. N C E L M U R S E I T V 25% T I 26% E T A timely reminder that whilst ESG B Y considerations are becoming a critical 30% part of the mix, leaders shouldn’t lose sight of the fundamentals. Reliably meeting E CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY N the needs of your consumer via a strong V I 39% Y R product or service is the foundation 44% T O I of any successful brand – something 44% AL CITIZEN NM baked into the Citizen Brands concept. N I NE GI BRANDS AT 38% RO IL MS 38% 49% 35% 23% AS ON SU UTI RA B NC TRI 18% E N 26% CO 44% 24% 17% 4 46% 47% 202 34% 48% 46% 23% 40% CITIZEN BRANDS REPORT 29% 15
WHO EXACTLY ARE THESE 50 ‘CITIZEN BRANDS’? Who best embodies the attributes of a Citizen Brand? As part of the Local Citizen Brands consumer element of the study, we asked 5,300 respondents to rate 150 brands according to the six attributes, creating an index of Citizen Brands. Of these, 100 were global and 50 market specific, all group/parent brands with consumer visibility, spread across 10 diverse categories. 100 Citizen Brands categories Global Citizen Brands Retail CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETYConsumer tech Consumer goods Energy Entertainment & media Health & wellness Financial services Mobility Fast food & beverages Travel & hospitality 4 202 CITIZEN BRANDS REPORT 16
TOP 20 CITIZEN BRANDS 01 11 Interestingly, the global top 20 is dominated by categories that are staples of modern-day living. Further patterns emerge when we look at how individual 02 12 categories perform across the six attributes. Retail scores highly across the board but particularly in Assurance and Inclusivity (which reflects the everyday nature of the 03 13 category). Consumer goods scores relatively more strongly against Originality (possibly reflecting category efforts to innovate and delight). Entertainment & media scores better against 04 14 Contribution – reflecting brands’ role as culture makers. CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY 05 15 06 16 07 17 08 18 4 202 09 19 10 20 CITIZEN BRANDS REPORT 17
MARKET LEADERS US Alongside the global Citizen Brand index, each market has UK its own top 20 Citizen Brands. Looking at the category story across markets, the picture is culturally nuanced too. Retail is relatively stronger in the US, UK and France – possibly because the category is more mature with brands making a concerted effort to create engaging and well-rounded experiences. Tech is strong in India and Saudi Arabia, possibly a reflection of recent tech investments in these markets, and the excitement and opportunities such brands are seen to bring to daily life. France CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETY India Saudi Arabia 4 202 CITIZEN BRAND-SHIP IS NOT CITIZEN BRANDS REPORT ABOUT WHERE YOU COME FROM. IT’S ABOUT HOW YOU BEHAVE. 18
“CITIZEN BRANDS FIND BALANCED CHAPTER 02: CITIZEN BRANDS: FINDING BALANCE BETWEEN SELF AND SOCIETYBRAND GROWTH IN AN UNBALANCED 4 202 WORLD.” CITIZEN BRANDS REPORT 19
03 CHAPTER 03: WHY CITIZEN BRANDS DELIVER GROWTH WHY CITIZEN BRANDS DELIVER GROWTH 4 202 CITIZEN BRANDS REPORT 20
Citizen Brands outperform their peers across a number of key measures: In partnership with Gate One, Havas’ flagship management consultancy, we explored the commercial growth link further by HAVE A POSITIVE OPINION OF conducting a revenue growth analysis covering the last three years of data available, as well as an equity growth analysis covering the Top 15 Citizen Brands last five years. The commercial performance results are equally compelling. 60% So-called ‘citizen brands’ – those that demonstrate an ability to find equilibrium between the needs of self and society – earned £8bn more in yearly revenues on average than their lowest- Bottom 15 Citizen Brands performing counterparts. The top 20 also outperformed the bottom 20 by 37% in terms CHAPTER 03: WHY CITIZEN BRANDS DELIVER GROWTH 24% of revenue growth, and stock market performance tells a similar story. The top 20 Citizen Brands increased their equity price by an average of 93% over the last five years compared to 17% for the bottom 20.* BECOMING A CITIZEN PROUD TO WORK FOR CITIZEN BRANDS EQUITY PRICE INCREASES OVER PAST FIVE YEARS BRAND ISN’T A MORAL Top 15 Citizen Brands Top 20 (average) IMPERATIVE. IT’S 44% 93% GOOD FOR BUSINESS. Bottom 15 Citizen Brands Bottom 20 (average) Citizen Brands outperform their peers across a number of key measures. They’re more likely to benefit from 22% 17% reputational growth through higher positive perceptions and associated word of mouth, coupled with a stronger ability to attract and retain talent as an employer brand. They’re also more likely to benefit from healthier commercial growth LIKELY TO BUY FROM driven by a higher purchase intent. Top 15 Citizen Brands 4 202 58% Bottom 15 Citizen Brands * This analysis is based on all brands researched in the 150 brand index spanning local, regional and global players. Due to atypical growth trajectories experienced in some sectors resulting from CITIZEN BRANDS REPORT significant macroeconomic events (e.g. geopolitical conflicts, growth resulting from post-COVID-19 24% recovery, etc.), it intentionally excludes companies operating in the Travel & hospitality and Energy sectors. The analysis also excludes companies with annual revenues below £10bn for FY2022, 21 due to the dissimilar revenue growth profile of smaller entities.
CITIZEN BRANDS' REVENUE GROWTH OVER LAST THREE YEARS CHAPTER 03: WHY CITIZEN BRANDS DELIVER GROWTHTHE TOP 20 CITIZEN BRANDS OUTPERFORMED THE BOTTOM 20 BY % 4 202 37 CITIZEN BRANDS REPORT in terms of revenue 22
GROWTH AND BETTERMENT BALANCE At the heart of Citizen Brands is the idea of ORIGINALITY balance. Interestingly, we see this reflected in the financial analysis itself. Taking the top 20 brands by revenue growth, we see that CHAPTER 03: WHY CITIZEN BRANDS DELIVER GROWTHthey outperform the brand index average across all six Citizen Brands attributes, not just a select few. ASSURANCE INCLUSIVITY ENVIRONMENTALISM 4 202 CONTRIBUTION KEY CITIZEN BRANDS REPORT Brand index performance (avg) 3.05 3.10 3.15 3.20 3.25 3.30 335 3.40 3.45 3.50 3.55 23 Top 20 growth performers (avg)
04 CHAPTER 04: WHY NOW IS THE TIME FOR CITIZEN BRANDS WHY NOW IS THE TIME FOR CITIZEN BRANDS 4 202 CITIZEN BRANDS REPORT 24
IGNORE THE SOCIETAL Brands can’t ignore the AND BE PREPARED context in which they operate TO BE ON THE WRONG – be it cultural, consumer, SIDE OF HISTORY. commercial or legislative.” The inflationary expectations placed on brands and the conflicting forces leaders are navigating are unprecedented. CHAPTER 04: WHY NOW IS THE TIME FOR CITIZEN BRANDSIgnore the societal and be prepared to be on the wrong side of history. But sideline the individual and risk slower growth and a potential shareholder revolt. Citizen Brands isn’t an activist cry or a statement about corporate social responsibility. It’s a framework to inspire balanced growth. A tool to guide a journey of thoughtful progress. It’s rooted in the idea that growth in an era of contradictions comes from the strategic balancing of the individual and the societal. And baking it into and across the brand mix in the long term. Brands can’t ignore the context in which they operate – be it cultural, consumer, commercial or legislative. Our hope is that Citizen Brands helps leaders embrace the complex reality of building brands today. And supports them in charting a path towards progress – where growth is both balanced and set up for the long term. 4 202 CITIZEN BRANDS REPORT 25
01. UNDERSTAND NEEDS, MANAGE INFLATED 04. MEASURE YOUR BALANCE WHAT BRAND EXPECTATIONS What gets measured, gets done. Putting a measurement To balance expectations, you first need to know exactly and tracking framework in place means you and your LEADERS CAN what they are. Mapping your key audiences and team can make tangible progress in finding your brand’s separating their critical versus inflated expectations will unique balance for growth. DO NOW help identify which expectations to address and which to manage in your search for balanced growth. CHAPTER 04: WHY NOW IS THE TIME FOR CITIZEN BRANDS 02. DEFINE THE CITIZEN BRAND BENCHMARK FOR 05. TURN YOUR TEAM INTO AN ENGINE OF BALANCE YOUR CATEGORY AND BRAND As any athlete will tell you, finding balance requires The extent to which stakeholders expect your brand practice and commitment. Ongoing optimisation of your to be a Citizen Brand will vary by category, market and brand’s own formula should be a constant consideration brand. Pinpointing the expected balance of Self versus for your team or department. Society for each element will give you a clear benchmark to plan against and define your brand’s unique response. 03. DEFINE WHICH PART OF YOUR BRAND MIX SPEAKS TO SELF VERSUS SOCIETY Not every aspect of your brand mix can or should address the expectations of Self versus Society equally. Through audience understanding, you can set your 4 objectives before identifying and prioritising which parts 202 of your brand mix to invest in to chart your unique path to balanced growth. GET IN TOUCH Want to find out how to apply the Citizen Brands framework to your own brand? For a deep dive into the study’s findings and to learn more about applying the framework, get in touch with Irina Wale: CITIZEN BRANDS REPORT Irina Wale [email protected] 26
CLOSING CREDITS AUTHORS Tim Parker, Brand Strategy Director, Conran Design London Anaïs Guillemané Mootoosamy, Strategy Director, W Conran Design Ludwig Duran, Strategy Director, Conran Design Group CONTRIBUTORS Francesca Gualano, Partner, Gate One Roberto Vitale, Partner, Gate One Savanta WITH THANKS TO Thom Newton, Global CEO, Conran Design Group Denis Gancel, President and Founder, W Conran Design Lee Hoddy, Executive Creative Director, Conran Design Group Scott Clark, Executive Chair, Havas SO Geet Nazir, Managing Partner, Conran Design Mumbai 4 Steven O’Neil, Associate Managing Partner, Conran Design New York 202 Jess Pike, Head of Marketing, Conran Design Group y / Nathan Watts, Head of Consumer, Conran Design London m a r s e Sally Robson, Head of Corporate Communications, Conran Design London ook t r Victoria Wright, Head of Corporate Brand, Conran Design London ooa m P Karen Almeida, Head of Advisory, Conran Design London é Mi n a n / T Kirstie David, Strategy Director, Conran Design London m a e r l l u Rebecca Burrows, Designer, Conran Design London i CITIZEN BRANDS REPORT u g D s Gi Matt Hodges, Designer, Conran Design London ï w a d n u 27 Matt Lumby, Designer, Conran Design London A L
THANK YOU LOCATION CONTACT 3 Pancras Square 020 3196 8888 London N1C 4AG [email protected]