Doughnut problem: What is it, and why is it worrying brands?

The doughnut problem, often known as the doughnut effect, has nothing to do with sugary food.

The pandemic has scaled back many major dynamics that cause economic clustering in cities. Households, companies, and real estate demand in major US cities have migrated from congested business districts and toward relatively low dense outer zip-codes. But the doughnut problem is that not it. If the businesses are shifting, the consumer habits are moving too.

The bulk of people worked from their homes throughout the lockdown. As a result, very few people visit city centres (the hole), and more people spend their time in the suburbia and on the outskirts (the tasty fried dough area).

How is the doughnut problem affecting customers’ relationships with brands

For a long time, vibrant cities teeming with reasonably priced coffee shops, well-loved fashion stores, and people hanging out were an open objective for brands looking to raise visibility. You choose where to stay where your target is. Unfortunately, that is no more a city centre.

The pandemic had a huge part in creating our lifestyles increasingly digital, from Zoom meetings to home deliveries and further. Businesses that depend on large regions for top-heavy sales, marketing, and product launches were doomed.

According to a Wunderman Thompson study, more than 40% of post-pandemic internet purchasing occurs on marketplaces, with online sales expected to stand for 51% of all retail sales in 2021.

This transformation provides a huge potential for businesses and marketers to change their strategies, engage consumers in fresh and more meaningful ways, and mix conventional methods with virtual aspects.

How to solve this colossal, ring-shaped puzzle?

Technology will change your world

According to a Goldman Sachs analysis, the most severe effect of the pandemic was the damage to live music, which was believed to have lost 25% of its global market. However, there was a ray of hope in the form of live streaming. Consider what components you may add to a digital music experience as the event sector recuperates from the pandemic.

Live streaming, OTT platforms and immersive experiences are working out good for the players.

Localization

As previously stated, your brand follows consumers everywhere they go. It is nearly limited to their own residence or area in today’s world.

Local marketing methods may provide you with an advantage when meeting your target in their own backyard. Deliveroo delivers 100 tonnes of free food to just about every city and neighbourhood. What were the outcomes? Revenue increased by 72%. (Basically, it’s better to stay close to home.)

Localization allows you to create relationships focused on the places where your target audiences hang out. Make it strategic. You may either target certain sites with your commercials or take it a step beyond and create the content in that city or neighbourhood.

Bring digitization into your strategy

The desire for creativity in your audience never went away; it simply relocated online. There’s a space for generalized, one-to-many interactions. However, we would also recommend including some personalized digital content in the equation. Consider this as the doughnut’s frosting.

How can digital content improve an immersive experience? Take a peek at brands like Meta, Balenciaga, Fortnite, and more. Besides individuals present in person, internet users were able to interact with the physical environment, which used augmented reality to show the most recent exhibit as engaging elements. Offline and online interaction equals personal + substance.

Turn doughnut problem into a solution

Without question, experiential marketing is entering a revolutionary phase. And it doesn’t appear to be going away eventually. Employees prefer a flexible working environment – a hybrid working environment, according to a survey conducted. Returning to former travel, retail, and professional habits seemed doubtful.

Traditional methods may or may not be effective. However, to target the consumers your brand values, we believe that you must mix and marry physical and virtual techniques into your marketing mix.