By Adam Hanft
Is this a nuclear winter for big brands?
I’ve read the data from the doom-mongers, but they are way off in their mortality predictions.
True, legacy brands are being squeezed by private-label and so-called digitally native startup brands. The former is driven by price consciousness; the latter by a rising cultural consciousness that favors the new and hip.
Those threats are real and have millennial appeal. But it doesn’t mean that big brands are in a death spiral; the consumer economy has room for everyone. And I include the threat of Amazon, which has launched more than 70 private label brands. “Amazon will spend billions to kill brands,” opined one reporter. War has been declared. Legacy brands can come out winning if they leverage their considerable real and perceptual assets.
Misdiagnosing the millennial immune system
Make no mistake, millennials are not in wholesale brand-rejection mode. In fact, they are embracing “disruptive” brands like Casper in bedding; Warby Parker in eyewear; Lemonade in insurance; and of course, Airbnb.
All that makes perfect sense; millennials are essentially conformists and love incumbents — Casper is using its popularity as its brand strategy, the age-old “We’re No.1” appeal — they just want ones they can relate to.
Big brands can’t reinvent themselves as new, but they can and must go battle fully armed with the four inherent advantages they do have.
1. Authenticity of the highest order
Millennials crave brands with integrity, honesty, and depth. And a proud history. Big brands have it all. Most have been around for decades with authentic cultures forged over time. But they have lost their way in marketing their stories.
Private-label brands don’t have that rich authenticity; they were conceived through a whiteboard exercise.
Rather than racing to out-cool the cool kids, legacy brands should find new ways to embrace their reality. As Adweek notes, “Millennials have made ‘yesterday’s blue collar brands today’s coolest clothes.’”
2. Consumers expect brands to give back
Today’s millennial consumer is looking for generous brands, two-thirds would rather buy from a company that gives back; brands with a sense of purpose grow nearly twice as fast as others.”
Brands from America’s greatest companies give back to society through vast philanthropic networks.
Private-label brands are not built to give back. When was the last time one of them offered a kid a scholarship or built a community garden? It’s not in their margin structure.
Once this message is unlocked, legacy brands will reap great rewards.
3. Brands are innovation engines
Consumer packaged goods companies have well-funded R&D departments and sophisticated marketing teams that can create category-driving innovation — breakthroughs that consumers are willing to pay for.
Private-label brands are fast-followers. This puts pressure on great brands to continue to earn and re-earn loyalty by continuing to invest in R&D, while building fast, nimble innovation cultures.
4. The transparency of bigness
Today’s consumers care about transparency, ethical sourcing, every link in the supply chain. Big brands are uniquely equipped to build these, and to also put stringent demands on their vendors and suppliers.
S.C. Johnson is a great example of how a branded company can maintain the highest standards, and communicate them digitally as central to its brand story.
Being anti-brand is not a strategy
Brandless raised $240MM for a private-label brand that proudly declares its independence from brand hegemony. But according to Recode, just 20% of shoppers who placed an order on the site in the fourth quarter of 2017 placed another order a quarter later.
Trust in institutions is cratering. Big brands with depth and soul are in the best position to build it back — to every generation.
Take Kitchen Aid, a 99-year old brand which made it to the top of Millennial relevance list in one survey — coming in ahead of Google and Apple — thanks to their continual product innovation and savvy use of social media.
Consumer packaged goods leaders should spend less time reading their own premature obituaries and more time leveraging their untapped strengths.
The only obstacles are organizational shibboleths and pre-existing behaviors.
Adam Hanft is a brand strategist, former advertising agency founder, co-author of “Dictionary of the Future,” and a board member at Scotts Miracle-Gro, where he plays an active role as a marketing advisor to the company. He has also worked with many category disruptors ranging from WeWork and Tinder to JetSmarter and Seeking Alpha.
This post is sponsored by Hanft Projects. | Content written and provided by Hanft Projects.
