Why brands need creative strategy
Creativity has to be at the center of business transformation
A McKinsey study found that companies that prioritize creativity have 67 percent above-average organic revenue growth and 74 percent above-average net enterprise value.
Creativity has a superior business value, yet it is too often siloed in “creative” departments, like design or marketing. This is understandable: traditional companies organizationally separate idea generation from idea commercialization.
It also doesn’t work anymore.
A lot of creative industries have been forced to accelerate their creative output, in the always-on cadence. Pressure for immediate productivity leads to unremarkable work, and is a reason for endless sequels, reissues, archive reboots and self-referencing across creative industries. Productivity pressure also leads to creative directors’ short tenures. For the time they are given, creative directors can, at best, offer their interpretation of the brand codes and archives. The newness imperative and the compressed business calendars don’t really let them come up with original ideas, much less allow those ideas to grow and mature.
Paired with this creative acceleration is a business pressure to execute and to hit quarterly financial targets. Business performance is designed to be short-term, together with accompanying metrics and expectations of commercial results.
When Pierpaolo Piccoli left Valentino, the fashion industry reacted with a cry for “a need for the intangible, for that magic alchemy that creates and delivers dreams.” Tell that to a CFO.
The disconnect is growing between creative industries’ need for time to develop and unfold an original idea, which is unpredictable, and a rigid financial calendar that demands predictable financial outcomes. Long-brewing brand desirability goes against the quest for immediate returns. Calvin Klein’s Jeremy Allen White campaign from January generated 40M views on CK’s Instagram and drove 85 percent YoY brand engagement increase. At the same time, Calvin Klein’s stock fell 20 percent and sales in North America dropped 8 percent YoY.
“The dismal sales figures are a reminder that turning around a brand as big as Calvin Klein takes time — and more than just one campaign,” concluded the Business of Fashion.
Companies’s response to the disconnect has been to keep trying to fit their creative output into the business models that have not changed for decades. In fashion, that means seasonal collections, shows, capsules and special projects. Since improving execution yields an immediate payoff, and creativity doesn’t, the focus is on the ever-increasing investments in the existing business models. In fashion, this means the more and more expensive fashion shows.
Demand to deliver great ideas that yield immediate results puts pressure on creative departments, most notably on creative directors. A recent Financial Times article, discussing Kering’s profit warning, was titled “Sabato de Sarno, the designer who must turn around Gucci.”
It is deceivingly simple to look at a newly appointed designer as a brand savior. Designers are part of a complex web of operational, logistical, commercial and strategic decisions. In the past decade, Gucci’s strategy has been to target younger, aspirational shoppers at the expense of the older, more price elastic, luxury ones. As a result, Gucci built strong fashion-forward credentials, which were a wind in its sails until the fashion currents changed. This all happened before Sarno’s appointment, and the results of both de Sarno’s efforts and the efforts of the entire Gucci organization will take a considerable investment of time, money, and expertise.
A brand turnaround also requires a creative approach to the organizational transformation. The solution to having the original creative output is to set the business for it.
This does not, mercifully, mean that everyone in the organization needs to be creative (it’s ok that financial controllers, for example, are not). It means adopting a creative approach to business opportunities across functions of marketing, merchandising, PR, retail experience, customer service, commercial planning and market growth. It also means having a clear business and brand vision and aligned functional incentives to achieving it; a strong cross-functional leadership that remains their teams of the common brand and business goals; and realistic return on investment and timelines across corporate activities.
Creativity is an approach, rather than just the output. As an approach, creativity focuses on business opportunities across corporate functions. As a strategy, creativity marries the process of idea generation and idea commercialization into organizational “middleware.”
This middleware combines the role of disorder in the creative industry and strategic rigor of running a business. Creative markets are inherently unpredictable, and this unpredictability has only accelerated. They have a lot less time to come up with, and test, these new ideas. The rules of selling creative products have dramatically changed, as well. Time to market is compressed and companies are often forced to test and try ideas in the world, where they live or die. This forces companies to adopt a portfolio approach: to have a lot of ideas versus just one “big” idea, and to capture a lot of cultural moments versus just one “big moment.”
The creative industry doesn’t need a more efficient execution; it needs more creative responses, processes, and business models.
In particular, this means:
In the domain of marketing, creative strategy delivers a lot ideas versus just one “big” idea, and captures a lot of cultural moments versus just one “big moment.” Its purpose is to expand a brand’s footprint and renew brand associations and provide a stream of always-on entertainment. It tests and tries ideas in the world, where they live or die.
A portfolio approach to idea generation is supported by marketing spend that is considered an investment and a cost of goods sold rather than as an operating expense, an approach that allows them to set realistic expectations on the investment returns. Additionally, creative strategy manages a company’s intellectual property, ensuring that brand content and entertainment is consistently monetized.
In addition to monetizable content, creative strategy defines is merch, special editions and capsules, archive reissues and sequels, or awards recognizing an area of culture. It also shapes collaborations outside a brand’s original product line, and hospitality properties, like cafes, restaurants, hotels and private experiences.
In the domain of media, creative strategy’s job is to develop, launch and synchronize multiple brand signals in culture. This means amplifying a brand’s own content through media, in-store experiences and visual merchandising and events, which then become a source of fresh content that is further amplified. Within creative strategy, media spend becomes a creative exercise, which revolves around identification of all the different cultural contexts for a brand to participate in.
Creative approach to media allows a brand to be present across different cultural contexts, be nimble and quickly react if some of these contexts gain momentum (a recent Calvin Klein x Jeremy Allen White campaign is an example).
A way for creative strategy to ensure that a brand is present in a number of cultural contexts is to use frequent creative collaborators (and amplify their creative output through its media buys), as these creators bring their fandom with them. Other ways are seeding of merch, amplified through media, as well as events, sponsored content and affiliates.
Creative strategy uses media for interstitial storytelling, which refers to a series of mini-stories that are connected into a web of a wider narrative. Creative strategy defines the cadence of messaging to mimic movie releases, through teasers, trailers, marketing activations, merch, events and launches. The role of creative strategy in media is to build anticipation around new product releases.
Creative strategy’s job is to amplify brand in culture with an experimental, portfolio approach to all brand actions, creation of cultural characters, moments of interest, entertainment production, and fandom building.
Creative strategy considers the entire funnel, though content, messaging, commercial planning, community building and membership programs, events and social media, personalization and specialized retail services. Creative strategy marries short-term sales goals and long-term gains in brand awareness, affinity, consideration, advocacy and loyalty.
In the domain of merchandising, creative strategy makes sure that there’s a narrative around the assortment and a synchronization between the annual brand and product story. Creative strategy details the product drip cadence to provide novelty and interest.
Additionally, creative strategy in merchandising provides the full look options and wear scenarios, styling guides and cookbooks. It puts brand personas front and center, making sure that the product assortment appeals to different target customer groups, creating many doors into the brand. It also defines merch to accompany product collections.
Creative strategy ensures that merchandising plays a pivotal role in the brand’s creative universe and that it strategically integrates archives, hero products, capsules and collaborations with the main collection into one consistent brand world. It also ensures strategic newness of the assortment, and manages demand volatility. It links in-season assortment flexibility with marketing and creative output.
In the domain of design, creative strategy ensures a consistent implementation of a signature brand aesthetic. A clearly defined brand aesthetics is how a brand participates in culture, and is told through product design, fashion direction, and styling.
Creative strategy also defines the annual fashion direction and its seasonal rollout, choses archival revivals, vintage curation, special editions and collaborations.
Creative strategy defines celebrity (hero) products for a brand. For example, Millionaire Speedy is meant to create halo around all (non-millionaire) LV’s Speedy’s. Those who have a Millionaire Speedy, though, know that everyone else knows how much they spent on it.The role of a brand’s hero products is to be the purest distillation of the brand identity and values, a bridge between the brand heritage and its future, and the fodder for brand collaborations. Burberry trench, Calvin Klein briefs, Stanley Cup or Gucci loafers are some of the examples of hero products. Hero products are the purest distillation of the brand identity and values, and are a bridge between the brand heritage and its future. They are foundations of a brand’s product pyramid and fodders for a brand’s collaborations. They present the building blocks of customers’ wardrobe and, like Avengers, represent the brand in the material culture.
Read the rest of this analysis on The Sociology of Business.
