Julian Metcalfe, the co-founder and owner of Itsu, has described the pandemic’s effect on the fast-food chain’s 77 outlets as “decimating”, but at least he has made a good bet for long-term growth in the shape of Itsu Grocery, a spin-off brand of products to cook and eat at home.
“We’re opening more restaurants now, but not at the same rate at which people are discovering what they can do at home with a bao bun or chicken gyoza,” Metcalfe says.
Itsu is one of many brands, in industries including hospitality, travel and fashion, that have needed to adopt new tactics to survive the pandemic. So what does flicking the switch back to longer-term planning and brand-building look like – and will key performance indicators shift from being sales driven and digitally oriented?
Product innovation – and a digital presence
Metcalfe is, of course, investing in recovery for his business, which is also trialling a new store concept, complete with a sushi-churning robot, to attract the quick-bite-after-work dinner market. But his ambitions for the grocery arm to inspire consumers when cooking at home mean that innovation will be the main objective he’s attaching to long-term brand-building.
“For a brand, nothing matters nearly as much as the value of the products. We’re looking at launching 20 to 30 in the next year,” says Metcalfe, who also co-founded and owned Pret A Manger until his exit in 2018. “Having key performance indicators is hard for us, because it’s all about innovation. Our KPIs will probably be more about doing everything humanly possible to make these ranges remarkable. For instance, we want to make the best broth in the world for ramen at home for £2.50.”
For Itsu Grocery’s MD, Claudia Santagada, this means reviewing the digital investments that have been made over the past year and assessing what becomes a lasting part of the firm’s marketing mix. She also plans to restart spending on traditional tactics, such as in-store sampling and out-of-home advertising, to build on the 59% sales growth that Itsu’s supermarket range has seen over the past year.
“We spent a lot of time and effort improving our digital channels. It’s definitely part of our longer-term strategy,” says Santagada, who used the shopfronts of closed Itsu outlets as billboards to promote the grocery range during the lockdowns. “We did a lot of work to set up our own Amazon shop, for instance, which is the first time all our ranges have come together visibly as a brand.”
It’s still hard for us to plan for the long term, but we do expect a strong consumer bounce-back in the coming months
She continues: “We’ve since noticed much higher engagement with respect to user-generated recipes on our website. We’ve also started to go back to a more traditional approach – activations in store are fundamental to introducing new ranges and improving their visibility. But there is also a commitment to increasing and improving our digital presence.”
Perhaps most crucially, Itsu Grocery and Itsu restaurants are run as separate entities, meaning that the two don’t compete for marketing and operational budget. This also liberates Santagada to plan for the longer term.
“Our brand has enormous potential. But, as Julian says, it ultimately depends on the quality of the products we bring into the market,” she says.
D2C and partnerships
Lyre’s, a brand of low-alcohol spirits founded by two Australians in the UK in 2019, has had to invest heavily in the direct-to-consumer online channel to work its way through the Covid crisis. Although its vice-president of European marketing, Jayne O’Keeffe, is planning to reactivate venue engagement and sampling, as well as a traditional seasonal campaign, maintaining its D2C presence will be crucial to building what is still a new brand.
“When the pandemic hit and many of our potential customers closed their doors, we moved to a digital-first strategy that has proved exceptionally successful. In the UK, we would have expected that 15% of our sales would have been via D2C, but it’s now more than half,” O’Keeffe says.
Although she will target newly reopened pubs and bars once again, O’Keeffe also plans to continue marketing to at-home drinkers, given that health-conscious consumers are increasingly embracing a low-alcohol lifestyle. She notes that aligning the brand with wellness and “mindful drinking” will be key to balancing sales-driven growth with long-term brand-building.
“Last year we worked with the Mindful Drinking Festival in the US, serving 10,000 drinks to people over two days. It was phenomenally successful,” O’Keeffe says. “We’ve also worked with some great sober influencers, such as Fat Tony and Emily from Sober and Social. Partnerships work well for us. We’ve partnered with brands such as Benefit and Weight Watchers, which has given us access to a wider audience who want to have fun and relax with an alternative to alcohol.”
Partnerships have also been key for Fly Now Pay Later, a finance start-up offering consumers a way to spread the cost of overseas trips. The customer-service element of the business ground to a halt during the pandemic, but a lot of work was done behind the scenes to develop long-term partnerships to help it prepare for the travel industry’s big comeback and start earning the loyalty of travel-starved consumers.
In March, for instance, Fly Now Pay Later signed a deal with Malaysia Airlines. That, coupled with a new injection of venture capital, means a launch for the business in the US.
“Large enterprise travel brands are being much more forward than they usually would be in implementing alternative payments such as ours,” says the firm’s founder and CEO, Jasper Dykes. “They’re anticipating that holiday prices will rise – and that consumers will need alternative financing to deal with that.”
Supporting long-term brand-building
Alternative models with long-term brand-building potential are also taking off in the fashion industry. Online brand This is Unfolded started trading this year with a unique proposition: customers must wait up to six weeks to receive their items, which are made to order. This approach reduces waste and better supports workers in the supply chain.
But the brand’s founder and CEO, Cally Russell, believes that an investment in building an online community, rather than traditional marketing methods, will give This is Unfolded longevity. That’s why it has the following three main KPIs: repeat customers, return rate and cost per customer acquisition.
“It’s still hard for us to plan for the long term, but we do expect a strong consumer bounce-back in the coming months,” he says. “From a brand strategy position, we need to take a more positive and aggressive approach to growth.”
Whether they’re focusing on innovation, partnerships or community-building, brands have had to use creative tactics to preserve their sales in the toughest conditions. As the pandemic-related restrictions on trading are gradually loosened, it’s clear that marketers intend to take the best of the past year with them into the post-pandemic era.
Julian Metcalfe, the co-founder and owner of Itsu, has described the pandemic’s effect on the fast-food chain’s 77 outlets as “decimating”, but at least he has made a good bet for long-term growth in the shape of Itsu Grocery, a spin-off brand of products to cook and eat at home.
“We’re opening more restaurants now, but not at the same rate at which people are discovering what they can do at home with a bao bun or chicken gyoza,” Metcalfe says.
Itsu is one of many brands, in industries including hospitality, travel and fashion, that have needed to adopt new tactics to survive the pandemic. So what does flicking the switch back to longer-term planning and brand-building look like – and will key performance indicators shift from being sales driven and digitally oriented?
