Thought leadership from our experts

The corona-effect on popular trademarks

Back in January 15, 2020, the UK-based YouGov Plc published their BrandIndex with result of the so-called Buzz Rankings of around 300 Swedish trademarks during 2019. Buzz indicates the extent to which the trademarks have been positively mentioned/referred to, with the net result (positive references minus negative references).

The Swedish respondents ranked

Volvo, the car manufacturer, as No 1, with a Buzz-ranking of 25,9 points; followed by ICA (a Swedish retailer with a focus on food and health) ranked 24,7; the mobile application Swish on third place with 23,8, and then IKEA (the Swedish ready-to-assemble furniture company) with 22,1.

H&M (a clothing-retail company) can be found further down on the list, however the result for 2019 of 5,9 points is much better than for 2018 (-0,6).

Some weeks after the publication, the Swedish market started to learn about the corona-virus COVID-19, and even if most roads, shops and restaurants were still initially open for the public, the main public stayed at home.

Kantar, a London based data and evidence-based agency providing insights and actionable recommendations to their clients, published in March 2020 their COVID-19 Barometer, a leading syndicated study on how COVID-19 is influencing consumer behavior, attitudes and expectations, covering 45 000 interviews in over 50 markets around the world, including Sweden.

The result of the study shows that 77% expect trademarks to be helpful during the corona pandemic, and that the trademark owners / companies shall inform their customers about their efforts to deal with the situation; 75% is of the opinion that it is wrong to use the crisis to promote your own trademark in order to sell more; 70% wanted to see a more "calm tone outward"; and 40% stated that trademarks shall avoid humor in the advertising.

However, only 8% was of the opinion that trademark owners should totally stop advertising.

So, how has the Swedish companies and well-known trademarks dealt with this indeed unusual situation?

Let's start with Volvo.

The sales for traditional Volvo Cars crashed – with minus 43,8% in April 2020 compared to April 2019. However, it seems more as a result of the fact that (Swedish) some customers are losing their jobs (salary) and/or are not allowed driving a car longer than 2 hours from home according to recommendations from The Public Health Agency of Sweden. Volvo is in the meantime working for the future, converting to sell more electric cars and charging hybrids. Volvo's Recharge models, with rechargeable cars, account for 14% of sales so far this year, which is a doubling of last year's share.

In combination with the fact that Swedes are avoiding crowd busses and subway to work, instead prefer to either walk, take a bike or their personal cars, Volvo will survive and even likely come out from COVID-19 as a stronger trademark – a car that can be known as both safe and environmental friendly.

Next is a trademark that belongs to a completely different industry: ICA.

The trademark for the food stores around Sweden is extremely popular, well-known via the company's advertisements on Swedish television several times a day in the form of a humorous soap opera each featuring the staff at one ICA shop somewhere in Sweden. This advertisement is still running, however maybe somewhat less humoristic and showing more of what both ICA and customers can do to assist those that have to stay at home.

According to an analysis published by Nordea, a Swedish bank, one of the few sectors favored by the coronavirus pandemic is the food trade. The fear of the virus leads to bunkering behavior, which in turn causes the food trade to take market shares from the restaurant industry.

ICA has recently expanded their regular e-commerce service with ICA Pronto, a project with home deliveries of ready-made meal solutions and a limited assortment of goods directly from the stores. 150 stores offered ICA Pronto at the end of May.

To conclude: ICA will definitely stay as a very strong and popular trademark in Sweden.

IKEA:

Swedes will stay at home this summer. The traditional holiday season trip will more or less be limited to the 2 hour drive by car. This likely is enough time to take you to the nearest IKEA department store in order to find articles to refresh your home. And IKEA has a daily updated COVID-19 part of their home page, with information on what is open and what kind of service is available. All IKEA department stores in Sweden are still open, although some of them with adjusted opening hours. The stores are marked inside in order to ensure that staff and customers keep the distance. The IKEA restaurants are closed in the three largest stores in Sweden, and the playroom for children "Småland" is closed. Home delivery is right now no longer offered, instead delivery directly to the customer's front door.

It is hard to say if and how Corona will affect the IKEA trademark. In some countries, IKEA has been critized for opening their stores too fast and too much. The problem for IKEA is that the business idea is that you as customer shall walk around in a huge warehouse and pick your furniture and other goods and then stay in the warehouse at the restaurant and after that spend some more time shopping – together with all other shoppers in that warehouse. That business idea seems to be out of time. In order to keep IKEA as a strong and popular trademark, it must be easier to walk around online in the stores, and order from home. IKEA may drop a bit in the next brand indexes, but is definitely strong enough to come back on the top.

Finallly: H&M.

The company belongs to the kind of business that suffers from then fact that the customers stay at home.

With no travelling, no student parties or huge weddings, and the possibility to work from home dressed in whatever you find in your wardrobe, companies like H&M indeed have problems.

Or, as H&M refers to it on their home page:

"When business as usual becomes unusual".

As of April 20, 2020, the H&M group had just under 4,000 stores closed due to the corona pandemic of the group's total of around 5,000 stores around the world.

They recently started to open up again, but with still less customers in the shops than usual. H&M has temporarily closed trial rooms, removed cosmetic tests, minimized cash handling and increased the cleaning routines. All that actions seems to be in accordance with other similar shops / trademarks.

H&M also offer free home delivery, however here starts the difference between H&M and those competitors that have started earlier with online services: The customer has to purchase for a special sum before free home delivery and the delivery is may take some extra time (as H&M refers to on their own web site).

Other clothing stores sell more goods online, with free delivery and a guarantee of a specified short delivery time.

If H&M shall keep their popularity as quality trademark, they need to quickly expand and improve their online services.

Trademark ratings 2021 will be interesting, wherever you are in the world. Online services, customer communication and (more or less) free delivery will be more important than ever. If the trademark identification can add some environmental quality and health security, then it will definitely be ranked among the top ten. Regardless of corona, we customers have changed our view on what shall be considered as a strong trademark.