Is the age of the Goliath brand over?
Author Ben Zifkin’s book The Rise of the Craft Brand, set’s out a compelling case for why smaller, craft-focused brands are set to become a force in the changing world of commerce.
The world of brands and consumers has been dominated by global Goliaths with bulging portfolios of consumer brands and even bigger marketing budgets to promote them. For all but a few of those brands, the result has been generic and undifferentiated offerings as they scramble to chase sales growth and shareholder returns. But the ground has shifted beneath them. The way consumers think, feel and behave has changed and those changes are well suited to nimble brands built on authenticity and with a unique story to tell.
Think Gillette Vs The Dollar Shave Club. One, a mega brand with huge distribution, market share and awareness (all theirs to lose) – the other, an entrepreneurial upstart with loads of plucky personality and a keen understanding of their audience and the differentiated value they offer. We wrote about The Dollar Shave Club a while back – you can check that article here. With a march sharper focus than Gillette, The Dollar Shave Club is unlikely to grow the marketshare of their unwieldy competitor – but they don’t necessarily wish to, and neither do their customers want them to. Big corporations have mistaken omnipresence for powerful branding. Craft brands have realized they don’t have to be everywhere – just where their customers need them to be.
In his book Zifkin outlines 4 reasons why Craft Brands are holding the aces
Historically, retailers have owned the customer relationship. Retailers were the only real outlet that could get your product into the hands of consumers at scale, effectively choosing which brands would succeed. That time is coming to an end and there are two main reasons for this:
1. Craft Brands Don’t Need Retailers To Sell Products
Retailers held the power for decades, but structural changes to the ways consumers buy and sell are bringing more craft brands to prominence.
E-commerce means brands can connect directly to their customers and complete the sale, no retailer required.
With the rise of decentralization, brands and retailers are now in a fight over where consumers end up, because in a connected world, people can wind up anywhere.
2. Craft Brands Aren’t Crushed By Marketing Costs Anymore
The second factor leading to a changing environment is the rise of consumer awareness.
Previously, products were discovered through advertisements in print media, television or on the radio, plus a small fraction of word-of-mouth recommendations.
The discovery of products was narrowed to brands whose marketing budgets were large enough to cover the most airtime. With the rise of technology, all of that has changed.
Before, the customer journey from seeing an advertisement to buying a product was long. You saw an ad on TV at night, and weeks later when browsing the store, you thought, “Oh, I’ve heard of this.”
Now it’s instant; someone can tell you about a product over coffee, you can look it up on your phone right then and there and purchase it with a single click.
3. Why The New Generation Loves Craft Brands
Beyond customer awareness, we have seen a massive shift in the notion of value. People today are more conscious about what they’re buying—and not just from a price perspective.
After the severity of the 2008 recession, we’re dealing with a new generation of consumers. This new generation is innately curious about what’s in a product, what makes it worthwhile and what makes that vendor special.
Before, there was simply a race to the bottom where consumers shopped various channels in order to find the cheapest price.
Now, there’s a larger focus on the concept of value. People want to buy fewer, often more expensive products, if it means the products have a higher quality, as opposed to needing to repurchase cheaper products of a lower quality.
The leading brands of tomorrow will not only provide unique products of quality, but they will couple them with narratives, whether it’s a commitment to the environment, community or human rights.
This is no longer a fringe movement of environmentalists or hipsters, but something we’re seeing as a consequence of a cautious economic period.
4. Great Craft Brands All Have One Thing: A Story
It’s different for everyone, but there is one commonality: each product and each brand is accompanied by a story that makes it unique. Simply put, brands want the consumer to say, “This is why I bought this.”
Whether it’s the cost or the details, there is an emotional attachment. Brands cannot fully predict resonance, nor can they possibly resonate with every single consumer.
Ultimately, to be successful, a craft brand needs to figure out how it defines quality and value, which in turn needs to translate into a story for the consumer.
Ben Zifkin is the founder of Hubba, the fastest growing business-to-business network connecting brands and retailers. He’s also the author of The Rise of the Craft Brand, a look at how the changing world of commerce will favor smaller companies.