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Digital Brands Vs. Traditional Brands – Why Goliath is losing the fight to Challengers

The leading institutional brands are big, cumbersome and steeped in tradition and process. Their brand voice has been carefully crafted over the years and only change in slight degrees not generally noticed by the general public. But this conservative approach is killing them. In less than a year, a new challenging brand can come on the digital scene and eat their lunch.

 

Mitch Duckler, Brand & Marketing Strategy Consultant and partner at FullSurge explains that “A combination of scalable technology with wide reach communication via social media is creating an era of challengers.” Not only are these new disrupt brands challenging the leading brands they are also changing entire industries.

 

Brands like Uber, Airbnb, Dollar Shave Club, The Huffington Post and Netflix are changing the way we think about taxis, hotels, shavers, news and television. Adam Morgan author of Eating the Big Fish says the new generation challenger brands believe consumers have new motivations and culture, new habits and new sensibilities that these brands can focus on much easier and quickly than the established brands. They truly think outside the box and demonstrate there is a better way. As Morgan says it’s “about a state of mind, not a state of market. A state of mind committed to perpetually overthrowing the order of the category in an unreasonably short space of time, for a maximum return on energy and investment.”

 

So what are these digital David’s doing to catch the attention of consumers? Gillette and the Dollar Shave Club are two great examples. Gillette has been around for over a 100 years and enjoys a near-monopoly on razors. The last major product launch was the Fusion razor in 2006. Most recently they introduced the Flexball technology on the razor handle. For such a simple product it is the most expensive purchase outside of drugs in the drugstore. Razors are so expensive that the store needs to place them under locked up display or under security surveillance with an alarm system every time you take out a razor cartridge to reduce shoplifting. The reality is that you’re the one being robbed with such a functional tool to perform an unpleasant, daily task.

 

Along came the Dollar Shave Club who hit the internet in 2012 with its irreverent block-buster video that has almost 20 million views to announce that their “Blades Are F***ing Great”. Their attitude and approach has hit an emotional insight with many hairy men. The price point is attractive and the convenience and novelty of receiving your shaving kit every month including the member’s magazine called Bathroom Minutes is smart. Wall Street Journal reported in June 2015 that Dollar Shave Club is valued at $615 million and sales were $65 million in 2014. Michael Dubin, founder and CEO says they have “2 million members that get a shipment every month or every other month.” Not bad for an online brand that has only been around for three years! I am sorry to say Gillette Fusion is clearly not the best a man can get.

 

 

It’s less about big traditional brands becoming complacent or bigger is better. New and innovative digital brands are breaking consumer and marketing paradigm everyday with new business models that bypass the traditional marketing barriers of better distribution, better channels, better people, better suppliers, better network, better capital resources and better customer loyalty. The new digital challenger is faster, brighter and more passionate and the digital environment can make them a star over-night before Goliath has even had his Muesli, MultiVitamins and Boost energy drink.

 

Here are some offensive or defensive strategies that you can establish with your brand in a state of war:

 

Differentiate Throughout the Brand Experience
Build a stronger relationship with your customers beyond the product’s performance. Some brands are using gamification, unique social context, branded playgrounds and playful content to help standout and maintain relevance. Disney is a pro as it concerns enhancing the customer experience, through technology they give their guests the ability to customize their theme park experience with MyMagic+ and the MyDisneyExpereince.com to ensure guests have the most magical experience on earth.

 

Embrace Digital Technology
This is critical. Utilize digital technology to extend your brand beyond the traditional bricks and mortar or enhance the traditional experience. Implement superior e-commerce, introduce automation, connect through social media and integrate with leading app providers. Get smarter, faster with big data by mining and reacting to customer insights, and offer opportunities in a dynamic market situation. Nike has done a great job working with partners by introducing new apps and tools to help their customers enhance their brand experience.

 

Being a Challenger is a State of Mind
You don’t have to be an underdog to be passionate about providing the customer with the best product or brand experience. Always aiming higher should be part of the brand’s DNA. Some of the biggest brands today have instilled the David-like attitude in their brand DNA like Virgin brands, Zappos and Amazon.

 

Reshape the Consumer Paradigm
Challenger brands need to be innovating with every aspect of their brand. They need to be agile, focused on the customer value proposition, and constantly taking risks to make the customer experience better. Adam Morgan says it’s about challenging the appropriateness of the established brand of today and their relevance for the world of tomorrow. New times call for new brands and services. Apple changes the way customers interacted with music and now the change is to music streaming to brands like Songza, a free music streaming (unlike Pandora where you pay for a subscription) with playlists based on time of day, mood or activity. This was the brainchild of 23-year-old Aza Raskin. Launched in Canada in 2014 they acquired 1-million Canadian users in less than 70 days. The same model is happening in books with start-ups like Oyster books similar to the traditional subscription libraries.

 

Be Bold and Caring
I am not talking about in-your-face screaming bold but relevant, youthful and caring. It’s about moving towards making customers understanding that you have their best interest covered in an authentic manner. Today, consumers, especially Millennials, want a relationship with brands they like, and want to share these brands with their friends. In the digital world you need eye-balls to view your web content. You need to create brand content (images, blog, video) people want to share. Red Bull is a master when it comes to content generation and now uses it as another revenue stream.

 

Be Prepared to Fight
Today, every brand needs to be focused on what matters for their customers. If that means becoming more digital because that’s how your consumers are using technology, you need to be better than anyone else.

 

Re-framing your brand into a challenger brand doesn’t guarantee success but it will prepare you for the future. I look forward to new digital brands who will challenge the banking industry, change how we buy and sell real estate and force shopping malls to refine their purpose.

 

Everyone loves a hero. And everyone wants David to win.

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