Q5: Brands, brands, brands, with Jeremy Sampson [interview] •

by Carey Finn (@carey_finn) Speaking in his personal capacity, Brand Finance Africa MD Jeremy Sampson weighs in on some of the biggest surprises and challenges for brands in South Africa, and globally, over 2019/2020.

Note: This interview was conducted prior to the coronavirus/covid-19 pandemic being declared as such. Additional comment has been supplied, as requested.
Jeremy Sampson: 2019 was difficult for most, yet 2020 and covid-19 is resulting in nothing like the world has ever seen before. In one word, it will be about “survival”. In emerging countries like South Africa, the difficulties will be particularly immense. But [it’s] an opportunity to recalibrate.

The sectors of hotels, leisure and tourism, aerospace, airports, cruise ships, retail, alcohol, restaurants and bars will all take a huge hit and many will not survive, while there will be limited impact on household products, telecoms, food, pharma and healthcare. The world of tech and harnessing the opportunities it provides will continue to explode. So, I ask again, are your brands relevant to this new world we are entering, and if not, what are you doing about it? Don’t waste the crisis.

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Q5: Across all markets, what was the biggest brand(ing) surprise for you in 2019?
JS: There wasn’t one! Perhaps it was waiting for 2020? But it is obvious that today countries and people and all “things” are potentially brandable. For countries in particular, the importance and understanding of “soft power” is on the rise. Brands and reputation have never been more important and often remain a company’s most-valuable asset(s).

A surprise in South Africa is the number of CEOs who still don’t know how many brands they own and what they are each worth financially and emotionally. It’s much the same in Africa. If you can’t measure it, you can’t treasure it. Nor do you know how it is performing or able to manage its future. And then why do we have so little buying and selling of brands as portfolios are fine-tuned, adapting to future demands?

Writing this [response] as we enter[ed] a period of lockdown due to covid-19, it is of paramount importance that all companies review all their brands and consider which will be most relevant as we return to normality, that will in effect be a new norm. It is not too dramatic to say that life will never be the same again, but that is not the point of this interview.

It’s no surprise that the top global brands today are nimble, agile, flexible and highly relevant, brands like Amazon, Google and Tesla — remember Elon Musk is South African born and in 16 years has turned the automotive industry inside out, being the world’s fastest-growing brand. And that’s not all: [there is] PayPal, SpaceX, etc. Compare this to South Africa’s current political leadership [pre-pandemic], the exact opposite. No wonder the country… slid down the world rankings to junk status.

But, if there was one other surprise in 2019, and it was very welcome, it was the Springboks winning the Rugby World Cup. The Springboks, a brand from the early 1900s, still on a good day are simply the best and, to some, our most-valuable global brand. [That’s] something to be celebrated and protected.

Q5: What trends can we expect to see among South African brands this year, and how much does that reflect what’s happening in the global brand(ing) space?
JS: The South African economy is, I believe the word is, “vrot”. That could change for the better of all of us if finance minister Tito Mboweni was allowed to do his job instead of having to deal with some of the financial/political/trade union dinosaurs in town, dragging the country down.

[Pre-pandemic, we saw] budgets tightening, the consumer being squeezed, unemployment totally out of control and no solution in sight apart from meaningless platitudes from so-called public servants. That [meant we were] all foraging for better-value-for-money deals as we [strove] to maintain our standard of living. As for the huge lake of the unemployed, unrest will grow, and entrepreneurs will emerge as they fight for a living and survival. But not enough. Globally, the brands that [had] been growing at the fastest rates [had] been the so-called FAANG brands (Facebook, Amazon, Apple, Netflix, Google), together with Microsoft.

Q5: What would you say was the single biggest challenge facing South African brands [before covid-19]?
JS: Most directors and executives still [saw] marketing as a cost, rather than an investment in the future success of the business. Couple this with the lack of seasoned branders, marketers and top executives who understand the role of their brands and you have a challenge. We have lots of young branders, but they need local and international experience. Mentoring, using the best local and international experts, would be a solution, and this applies far and wide.

Locally we [had] seen the turnaround at Pick n Pay under the guidance of Richard Brasher (ex-Tesco), while, at Clicks, David Kneale (ex-Boots) [recently] stood down after turning around this 52-year-old brand. Ian Moir’s time at Woolworths was less successful, as he earned R303m while destroying R10bn in shareholder equity over four years. [Pre-covid-19], most South African brands remained exclusively local and totally vulnerable and under threat from international predators all supported by top brand teams. Let’s see what Pepsi does to Pioneer. Pan-African opportunities abound.

One brand that in 33 years [had] gone totally global, a wonderful success story, is the ever-hot Nando’s. Authenticity, trust, consistency but never boring — [that] takes a lot of beating.

Q5: In SA, which sectors do you think we should be watching closely, and why?
JS: Tech. We need to turbo-charge this sector, as it is so crucial to our future. The whole country needs connectivity that is fast and affordable. In a country where the divide between the haves and have-nots look[ed] to be widening [before the pandemic], everyone should have a mobile phone, for starters. We must create our own nursery of tech brands. But a question: [has] our education system [been] providing the right training for tomorrow with built-in flexibility?

Also banking. For a long time, the big four [had] dominated, but the emergence of Capitec and the new banks [had] already shaking up the sector. That’s good news for the consumer. Digital can’t buy success, but it can certainly make you more fit for purpose. But how long before global players swoop in?

Q5: On a different note: worldwide, what can we expect from brands as they respond to growing climate-crisis concerns?
JS: We are all becoming more conscious of climate issues, sustainability [and so on] — especially the under-30s. And we are better informed, so less easily duped or victims of fake facts. As a result, we will demand more consciousness, accountability and empathy. More than anything [up until the pandemic], the fires in Australia, and the drought in the Western and Eastern Cape [had] drawn attention that the world is changing and we need to plan. [We need to] cut carbon emissions (coal usage for starters), use nature (wind and solar), use water more sparingly and effectively, plant crops more compatible with the future.

Brand loyalty is never a given, and no one likes to be taken for granted. Given a choice, at times we will all change brands; blind loyalty when you have a choice is no more. Promiscuity is on the rise, or shall we call it consumer choice? If only we had alternatives to Eskom.

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