If you’ve had a positive experience with a brand through a digital channel, then you’ve experienced brandtech. Proponents say as more and more of consumers’ brand interactions are via digital devices, brandtech will become the primary form of marketing.
Last August, McDonald’s Japan posted its first profit in eight quarters after it tied in with Pokémon Go. By turning its restaurants into PokéStops and PokéGyms within the AR mobile game, the Japanese unit of McDonald’s saw its sales jump 27% in July 2016.
That, in essence, is “brandtech,” which is defined as the leveraging of technology for marketing purposes.
“After that, people looked at it and said, ‘OK I get it. You can use augmented reality and location to drive major increases in footfalls and traffic and sales, and at no point has anyone seen an ad,’” said David Jones, the former Havas SA CEO and founder of brandtech firm You & Mr. Jones.
Jones, who raised $350 million to start his firm in 2015, is the most high-profile of brandtech, but he’s not the only one pushing the idea that all brands are or should be tech brands. There are also countless other examples. Those range from Tesla’s dealer-less, Internet-based sales process to Domino’s Pizza, which in recent years has introduced pizza emoji ordering, pizza drones, and zero-click ordering where you can fetch a pizza just by opening an app. If you’ve had a positive experience with a brand through a digital channel, then you’ve experienced brandtech.
Not all brands have an easy time pulling this off. Generally, established brands are at a disadvantage, and it’s more challenging for “low-touch” categories, such as insurance and consumer packaged goods, to embrace brandtech than high-touch segments, including retail and autos, where the sales process typically involves a lot of human interaction. Brandtech proponents, however, say as more and more of consumers’ brand interactions are via digital devices, brandtech will become the primary form of marketing.
Based On Experiences
The ability to create emotional product experiences that consumers want to share with others is what distinguishes brandtech brands, according to Rasmus Bech Hansen, a U.K.-based brand consultant. After all, that’s how brands including Uber, Airbnb, and Instagram spread.
“To change a person’s brand perception, nothing is more effective than real-life encounters,” Bech Hansen told CMO.com. “Nothing is more memorable.” That is especially true in a time when 18% of U.S. Internet users employ ad blockers, and 86% of them suffer from “banner blindness”–meaning only 14% said they could recall the last banner ad they saw.
“What’s changed is companies have saturated the media with advertising, and consumers have become inured to it,” said Bobby Calder, a professor of marketing at the Kellogg School of Management at Northwestern University.
The traditional model for advertising was to piggyback on media and use interruptive messages that sought to persuade consumers, he told CMO.com. But marketers know that it’s tough to get consumers to engage with advertising they see as interruptive.
“They went from there to why not change the whole paradigm from persuasion to experience?” Calder said.
Brandtech In Action
Experiences don’t have to be delivered solely in the tech realm. Amazon, for instance, is rolling out physical stores to create experiences that it can’t in the digital realm. Adidas has rolled out fitness classes to compete with Lululemon, which is known for its in-store fitness classes. Many brands are also experimenting with pop-up stores to reach consumers offline (although many of the stores have strong digital components).
