One of the challenges facing all providers of goods or services, especially the fast moving consumer or packaged goods ones, is that - in reality - all are selling more or less the same products. The same products with what amounts to small differences in reality. Not surprisingly, therefore, we have seen that private label brands have surged as consumers realise this reality.
The ability to create brand values and imagery is increasingly difficult and costly, as the all mighty power of TV has waned due to fragmentation, time shifted consumption via PVR, greater use of online and watching of content via Internet. The ability to surround the brand with a brand aspiration through mass paid for media is reducing.
And so as we look ahead, we will need to consider how to build brands a different way. For without a brand, categories will become more commodity and price will play a big role. It will be harder to innovate and fund brand image investments as the profit margins are squeezed. Consumers will see less innovation and more commodity of offers.
I believe that to build brands today and in the future, the focus now needs to be more on the brand experience, and not just on the image and aspiration that used to be more the case.
Brands need to create a world around them. A story that consumers can enjoy, embrace and buy into. Something above and beyond a collection of benefits and features. I see this happening in many categories, and especially in the skincare and beauty world that I am most actively working in. Brands that are robust and growing are ones that have perfectly good products, but that has become an order qualifier rather than the order winner. The order winner is more related to the business model, and how they engage everyday with their target and the story and experience they are building and maintaining around the brand.
Brands like Caudalie and Nuxe in Europe are great examples of this. They are making much ground as the TV focused brands are losing ground due to the daily and tangible brand experience they offer.
I also believe that in the future the best way of succeeding is by actually owning and having a direct relationship with your consumer, and trying to reduce the role of the gate-keepers to this relationship, which for most of us is the retailer. To be able to create an experience you will need to be able to create the space and the environment. Retailers are trying to create their own. Digital tools can help build a world and a relationship, and the role of social media like Twitter, Facebook and YouTube along with CRM and email can help.
But to really differentiate and really own your consumer, you may need to actually own the distribution channel.
Apple have shown this with iTunes and their devices. This may be an extreme example, but there is no doubt that once signed up their ability to own that relationship and understand what you like and do is key. I cannot imagine how difficult it would be for me to switch away now from my link to Apple and iTunes.
Avon for decades has been the same. In many markets around the world they dominate or hold major shares of categories. They own the channel, but more importantly they own the relationship.
If I was advising anyone looking to innovate today, it would be to focus on how to create an experience for a brand that ensures you can tell a differentiated, compelling story via an experience and direct to consumer channel. These are the brands and ideas that will win.
What do you think? Leave a comment on the blog or email me at Gary@bembridge.co.uk
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