As the novel coronavirus started to strain U.S. hospital systems in mid-March, General Motors adjusted course to see if it could provide relief. Working with the medical device firm Ventec Life Systems, the automotive giant quickly shifted manufacturing resources to produce ventilators, a move that President Trump put additional pressure on by invoking the Defense Production Act.
“Our team … all on volunteer time and all apart from what they were doing to manage the current crises in the business, jumped in,” GM CMO Deborah Wahl said this week during a panel session organized by the Mobile Marketing Association (MMA). The session was part of the trade group’s Impact conference, which was held virtually for the first-time ever.
“Within 18 days, we developed a whole process of how we could help Ventec completely manufacture a whole new level of capacity,” Wahl said.
The speedy partnership forged with Ventec, which is now on track to produce 30,000 ventilators by August, per Wahl, addressed a pressing issue particular to the current public health crisis. Yet, the pivot also represents how the company behind brands like Cadillac and Chevrolet is broadly evolving operations — including within its marketing department — to meet the demands of a historically volatile business environment.
It’s a sudden change of pace that could endure, Wahl and other panelists forecast, especially as consumer behaviors driven by the pandemic in areas like e-commerce and cleanliness will prove resonant for the long term.
“I think that story about the ventilators shows the key changes we’ve made in terms of, how do we work together in a more agile place, how do you address a major process change in 18 days?” Wahl said. Appointed CMO last September after working the same job at Cadillac, Wahl is GM’s first female marketing chief, and the pandemic has hit early in her tenure.
“You’re seeing a series of new tenets that are being launched, basically week-after-week, that are addressing this change and transformation,” Wahl added later in the talk conducted via Zoom. “I think that pace is what we’re going to need as we go through all the uncertainties coming forward.”
A blessing and a curse
The way the pandemic has shortened the timeline for innovation can be both a blessing and curse, MMA panelists said.
“I’ve heard CEOs say we’ve had two years, six years of innovation in weeks,” said Joshua Lowcock, UM’s EVP, chief digital and innovation officer.
In some ways, the compression serves as a call to action for marketers. Lofty ideas around everything from digital transformation to cross-department collaboration have been thrown around at conferences and in boardrooms for years, but are increasingly a necessity as nonessential physical stores remain closed and remote work becomes the new norm.
“The urgency of the crisis suddenly allowed the C-suite in most organizations to … collaborate, not just across functions, but around the world,” Janet Ballis, global advisory leader for media and entertainment and the Americas marketing practice leader at Ernst & Young, said during the discussion.
“The question is how do you seize on that momentum and make sure that you don’t lose that energy, that you don’t lose that positive focus?” Ballis said.
For GM, the effects on marketing strategy were immediate, as showrooms were forced to go virtual and e-commerce became a priority.
“First of all, online shopping, lead generation, et cetera — we’re up significantly in the first couple of weeks of this month,” Wahl said. “There is demand and interest out there.”
In the past, around 10-15% of GM customers were interested in buying a vehicle virtually, according to Wahl. Since the pandemic started, Google data indicates those figures have gone up “remarkably,” the executive said, signaling that more people are willing to make high consideration, high dollar purchases online.
“Using that 18-day benchmark … we’ve completely accelerated our shopping online experience,” Wahl said. “We have something called Shop, Click, Drive, which we’re seeing has like a 50% increase in traffic going on. That is enabling larger parts of the purchase cycle to happen remotely.”
Preferences could change in other substantial ways that are already having an impact on GM. The growing premium on hygiene led the company to introduce a “CLEAN” initiative this month that follows guidelines from the Centers for Disease Control and Prevention to ensure dealership locations and cars have been thoroughly prepared and sanitized on a regular basis.
The program has received pushback from some dealership owners who fear that they could still be legally liable if the coronavirus is still present in their stores despite following CLEAN protocols, according to Automotive News.
On the consumer end, the outlook for automakers could improve if lifestyle choices like city living decline as a result of the pandemic, which has hit metropolitan areas like New York the hardest in the U.S.
“[People] are going to be in this world of personal safety, of making sure you’re protecting yourself and your family,” Wahl said. “The demand for individual vehicle usage is accelerating. We’re seeing some trends that people are looking to moving back to the suburbs, for example — all things that would potentially drive the market up.”
However, the patchwork response to the pandemic in the U.S. means that having a nationwide plan is lower on the agenda. Localization, on the other hand, will be key for companies like GM as states open back up businesses, but on different timelines and at different scales. Wahl noted that the uneven reopening plan means that GM’s investments in areas like data-driven marketing capabilities are of greater importance.
“We’ve completely ramped up our personalization, our addressable marketing,” Wahl said. “What we’re looking for now from our partners is the ability to do that at scale. To buy that addressable audience is still a very small part of what’s available overall.”
Where those audiences are going to be spending their time is less certain. Wahl said that GM is running what it calls a “COVID Holding Tank” around areas lacking a clear path forward, such as sponsorships of live sports. It’s not a problem that is likely to be solved in just a few months.
“I think definitely events — how we do those, virtually, et cetera — are going to be changed through the end of 2021,” Wahl said.
GM is already looking to walk back some of its upfront ad commitments to broadcast networks, The Wall Street Journal reported last week — an increasingly common thread among major TV advertisers concerned about an economic downturn and stalled production of new programming. Wahl did not directly address GM’s TV media plan, but noted that there’s “a lot of very practical things that we’re assessing day-by-day.”
Similarly, developing the right messaging strategy around the coronavirus has become a moving target. Solemn messaging addressing how we are all coping “in these times” was popular at the pandemic’s outset, but consumers have grown increasingly tired of such ads, and can even view them as exploitative. It’s a trend that GM has tried to counter while continuing to recognize the gravity of the situation.
“Joy and optimism [are] much-needed these days. We launched our first set of everything with a very concerned aspect, which was appropriate for the time,” Wahl said. “Now, I think we have to show people how we live in this new world together.”