Legacy Brands vs. Startups - Who needs to reposition post-pandemic?

By: Lara Vandenberg

We walk you through the commonalities of companies doing well during global crisis, which include being social and social responsibility, the ability to differentiate through community, the ability to be nimble, and to understand localization.

2020 has been the year of buying into brands. Buying into their values, their approach to a global pandemic, and their behavior to nationwide protests, rioting, and civil unrest. Brands’ actions and reactions from this year will either help them or hurt them for years to come. 

While we’ve been busy buying into them, have we still been buying from them? We’ve had stay-at-home orders for eight months, and as businesses and cities begin to re-open, brands still have an instrumental role to play in restoring consumer confidence and in moving customers from consuming news to consuming goods and services. 

A global crisis can either sink brands and their marketing teams, or create the opportunity for them to thrive. Companies like Dropbox, Uber, Airbnb, WhatsApp, Groupon, and Pinterest were all founded during or just after the global financial crisis, and Alibaba founded during China’s SARS outbreak in 2003. 

Currently, several categories are booming, and we are already seeing solutions for radical innovations in tele-medicine, remote personal care, medical equipment, home delivery, remote-working, online education, and contact tracing. Contrastingly, the categories significantly down, like transport, travel retail, and hospitality are trying to survive by becoming more agile and re-inventing what engaging their audiences looks like. 

So is there a parallel we can draw between the ability for a brand to reposition and innovate to its size and stage in the market? 

Earlier in the pandemic, it was startups that led the way by repositioning their value propositions and messaging. It was the ability to pivot digitally that outpaced their legacy competitors. It’s no surprise that startups are proven to be more nimble than their legacy counterparts. They were quick to engage and activate their communities, from live-streaming to mico-partnerships, their customers were met with empathy, honesty, and frequent communication. 

Mid-pandemic (the assumed stage we are currently in), we’ve seen an onslaught of startups with smaller runways with unclear product market fit. This has been a challenge not only for existing startups, but also for the creation of the next generation of startups. Legacy brands alike, including HP, IBM, and Dell, made headline after headline with new layoffs, restructuring, and hiring freezes.

Legacy brands, although bound with red tape and generally averse to change, have major advantages of  resources and scale. From cash flow, to diversity and experience of employees, to the copious amounts of high quality data, enterprises are positioned well in coming through and out of the pandemic. Ample resources, business partners, a large, established client base, allow enterprise companies to better engage in long-term trial and error while seeing what works during a crisis. This approach enables major companies to unlock opportunities to innovate.

COVID-19 has redefined the meaning of brand purpose as we knew it. Brands that were  focused on their product suite of goods and services pre-pandemic, are now swapping out commerce for efforts to build their brand narrative, helping the community, healthcare professionals, and the public during this unprecedented time. While brands’ positioning will need to iterate for months and years to come, the commonalities of companies doing well are; being social and social responsibility, the ability to differentiate through community, the ability to be nimble and to understand localization.

Being Social and Social Responsibility. We have started to see and will continue to see the messaging and the stories that brands choose to tell directed to more empathetic, slower and more compassionate social scripts. Earlier on in the pandemic, consumer loyalty was at an all-time high toward brands promoting socially responsible behavior and inspiring social action, care and compassion. We will see a change from brands talking about themselves, to more collective use of “we and “us”. Brands will be carefully evaluated based on the social good they create in their communities. 

Differentiate Through Community. Communications and Marketing is front and center for how companies need to respond to the downturn, particularly as it pertains to building community while driving revenue response. While startups have had a unique direct line with their consumers, all companies now need to have one-to-one relationships with their consumers in order to capture first party data. While community has been a significant advantage and differentiator from start-ups to legacy brands, all companies now need to create intimacy with their audience. 

Nimbleness. The COVID-10 Pandemic is a test of just how nimble a business can be. With product launches paused and cancelled, long-term planning is more of a contingency strategy than a definitive plan. 

Localization. One of the changes we have seen already is a major overhaul of brands use of localized products and services across the entire value chain. From on-shoring talent, to localizing messaging, distribution and sales, this will be a major shift that we will see from brands in repositioning them in the market. 

The almost instantaneous immediate depression triggered by the COVID-19 pandemic has devastated businesses large and small. Regardless of size and industry, going forward, it will be a question of has a brand excelled in conveying their brand purpose, driving consumer engagement and business value? If yes, then we should be buying their goods and services in years to come. 


What we’re listening to


What we’re reading