Blurred vision: Why disruptive brands are heading for an identity crisis
Brands looking to diversify must ensure they don’t dilute their proposition, warns Millward Brown’s Elspeth Cheung
Brands of all kinds and all sizes are diversifying into new categories, with the goal of building a multi-faceted ‘world’ around their target consumers.
It’s a powerful way to achieve greater relevance: by meeting more of an individual’s needs, you entice them to increase their use of your platform.
However, stretching a brand in new directions also has its risks. As the lines between categories become blurred, brands could be left struggling for identity.
The status quo is being changed in a number of different ways – often through the use of digital technologies, but by other means too, such as transforming how a service is delivered, enhancing the consumer experience or changing a format.
It’s not only smaller challenger brands that are shaking things up; established global names are adopting disruptor models and crossing traditional category boundaries.
The powerful position they already hold in consumers’ minds, combined with the strength of their platforms, is enabling them to quickly and successfully move into new sectors.
Retailer Amazon, for instance, has built its own logistics network (and is now testing drone delivery in the UK), started producing its own content and extended its business into perishable goods.
Facebook, too, now hosts publishers’ original content to persuade members to keep active, and has released its first virtual reality headset from Oculus Rift, the start-up it acquired in 2014.
Starbucks has moved into the e-commerce space with a ‘tap and go’ app, and widened its relevance beyond a quick morning coffee and cake by enhancing its cold drinks and savoury ranges, and even offering beer and wine.
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This transformative mindset is helping brands to increase their strength by ‘disrupting before they’re disrupted’. Amazon, Facebook and Starbucks all increased their brand value significantly in the last year, according to the latest data from BrandZ.
Aiming to be ‘all things to all people’, however, could cause a previously focused brand to lose the clear place it once held in the consumer’s mind.
Equally as important as the ability to diversify and disrupt is the ability to keep the brand sharp, distinctive and meaningful. The two must happen in parallel.
Most vital of all is a well-defined and clearly communicated purpose. A purpose creates clarity by giving people a way to evaluate how well the brand fits with their own view of the world.
This does not need to be a higher purpose, like Facebook’s vision of a world where universal internet access helps people rise from poverty, but the brand does need to be seen as doing more than just making money.
Coca-Cola has shifted from its ‘Open Happiness’ slogan, which implied that the brand could spread joy and bring people together, to a narrower, more modest purpose with the strapline ‘Taste the Feeling’.
This emphasises the moment of experiencing the product – evoking the pleasure and refreshment the individual gains when they drink it.
The purpose must be authentic, positioned within a broad social context, and perceived as improving the life of the consumer in a meaningful way.
In the car category Volvo has continued its emphasis on safety, a genuine purpose that is an extension of its functionality, which has successfully helped to drive sales.
This purpose then needs to be articulated and executed consistently through the brand experience.
At a time when product quality and function are generally good, and we can all order what we want with a couple of clicks, the experience of purchasing and using a product is one of the few ways a brand can differentiate itself.
Making the consumer’s experience memorable requires both adding embellishments and removing annoyances.
In retail, the physical space has taken centre stage once again as a place in which to showcase the brand to customers who do so much of their shopping online, engaging them in unique ways that fully express the brand’s purpose.
Banks, too, are fighting back against intensifying competition from financial technology start-ups by improving their customer service and introducing more digital innovation.
South Africa’s Absa Bank uses historical transactional data to personalise communications. It alerts customers when they’re at risk of overdrawing their account, based on their specific habits and payment obligations, and offers tailored options such as speaking to an advisor.
Canada’s largest bank RBC has introduced mobile banking services, including mobile wallets that are used by two million customers each month.
The ability to diversify into new categories brings extraordinary possibilities. Brands that can extend themselves in innovative ways will increase their penetration and their relevance in people’s day-to-day lives.
Without a clear purpose at the core of their strategy, however, they will dilute their proposition and lose the niche they have worked so hard to carve out in the consumer’s mind.
Elspeth Cheung is head of BrandZ Valuations at Millward Brown