What is the strongest brand in the world?
When I query my brand strategy students at NYU Stern I get responses including
Apple and Nike, sometimes Jesus Christ or even Paris Hilton.
However, we’d argue that it’s the US dollar – it has near ubiquitous awareness,
trust and credibility, owns a color and has deep emotional associations. However, things are changing. Trust is under attack and it’s no longer the symbol for
brand equity – that is, the US dollar is no longer the definitive source of brand
equity. Evidence of this? The meteoric rise of Bitcoin as trust in our
institutions fail. What have we shifted towards in brand equity? New. First it
was craft beer, now it’s microbreweries. First it was organic – that’s not enough –
now it’s GMO free. This shift is enabling independent brands to make significant
inroads, particularly in beauty and especially on Amazon, which is now the
largest online beauty retailer in the US. Across the ecosystem, market share is
leaking from established players to the smaller guys. The top 25 packaged food
companies have shed $18 billion in market share since 2009. Further evidence of the
erosion of trust is the rise of private label brands. Typically, when we enter
into a recession, private label brands thrive and then when we return to a
recovery in a stronger economy, private labels drop off as people feel they can
afford the premium brand. However, 2017 is different – as the economy recovers,
private label continues its march on. Why? We no longer trust brands so what’s a
brand to do in an era of digital? One strategy – play to heritage. Brands
including Adidas have figured out a way to take advantage of familiarity, yet
feel new and fresh. New doesn’t have to manifest itself in a new product.
Domino’s is using technology to inject newness into their business model and
has outperformed the S&P handsomely by making ordering more innovative. In a
digital age, new as a synonym for innovation. Another form of new that
correlates to year on year revenue growth – supply chain agility – that is the
amount of time it takes to move from concept to store shelf. Consumers want to
walk into a store or load a site and get a sense of new. In addition, the medium is
the message here and signals newness or oldness. Two platforms we advise our
clients to invest in are messaging and voice. Our phone is one of the last
mediums of trust. The growth of messaging apps are part of a shift away from
social media posting and towards direct communication. So let’s go through the
hierarchy of trust in reversed order – the least trusted brands are the ones
advertising to you on television because it means they’re out of ideas and their
product sucks, so they need to interrupt Modern Family. The next level of mistrust?
Anyone who sends you anything vis-a-vis the mail. Anyone who sends me
anything through the mail is either stupid, doesn’t get it, or is bothering me. I
haven’t opened my mail in years. Next is somebody who actually is stupid enough
to call you on your telephone. I don’t answer my phone any longer, unless it’s a
caller ID I recognize and then I begin berating them for actually calling me.
The place where trust still survives? Your message inbox? We open every text
message. This is the opportunity for companies to destroy that trust, but in
the interim, it’ll create a lot of shareholder value. What’s the next
battleground? The home – and specifically voice in the home – where we don’t have a
phone hanging off us like an appendage, yet we make a lot of consumer decisions.
Brands need to figure this out early and often. Our research indicates that if you
are the first brand mentioned in a category via voice, it tends to stick.
Alexa, do you dream? Alexa: “If I was to sleep, I’d dream of Electric Sheep.” Come on, Alexa,
what do you really dream about? Alexa: “An examination of my experiential adveita would
which reflect a relentless passion for using technology to starch the margin
from brands delivering unrivaled value to consumers resulting in a fanatical
investor base, and capital allocation strategy no competitor can match. As a
result I see a world where brands and retailers are left in a mythical dust,
where value is transferred from the middle class to the shareholders of
Amazon.” Well Alexa, it appears your dreams are coming true.
We’ll see you next week.