Are Brands Less Relevant in the Information Age?
February 12, 2014
Featured image via Pentagram
James Surowiecki’s “Twilight of the Brands” article in the New Yorker earlier this week certainly got me thinking about just how important brands are these days.
Surowiecki’s line of argument is that the Internet has opened up a sea of information that’s given consumers more power to be disloyal and as a consequence brands are weaker.
“It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos.”
Surowiecki uses Asus as an example of a brand that’s come from nowhere to claim a place in the world of consumer electronics, based solely on the word of mouth generated by the performance of its products. However, it doesn’t mean the Asus brand is any the less relevant, the foundation of strong word of mouth has established the brand.
I think what Surowiecki is getting at is how today a brand’s product and service performance is really crucial to their success, one false move and this can serve to damage the brand’s reputation and we’ve all seen what happened to RIM and Nokia. It’s certainly true that across many categories including consumer electronics, where the performance of a brand matters more than ever. It’s not that brands no longer matter, or are less relevant, they do, but in the cases where it matters, they just have to concentrate hard on delivery.
Another brand mentioned by Surowiecki is Hyundai; this brand achieved considerable success in the US based on the value it delivered to consumers. However, what’s especially significant for this brand is that it clearly understood its potential weakness was the consumer’s perception of its product quality and introduced the most amazing warranty program in automotive history to compensate. It was this effort that catapulted the brand in the US market and turned into a more credible and stronger brand.
Brands don’t matter any less than they used to, they are still critically important. Across many categories consumers are faced with a myriad of choices for products that are very similar, this is especially true for items you find in the grocery and liquor stores, but also well beyond these categories.
In many cases there’s very little difference in the products, the only thing they have to differentiate themselves on is the brand. This is where well-marketed brands manage to find something that’s unique about themselves, or their users and elevate that to a powerful brand platform. The challenge for these brands isn’t about consumers scouring the Internet to compare product quality, but consumers shrinking attention spans, which make it harder than ever to communicate their emotional points of difference.
Another interesting phenomenon is the rise of the mass premium class of brands. You see this in the fast casual restaurants with the likes of Chipotle, at a scale and Shake Shack on more of a micro-footprint. In these cases, brands have taken a look at the marketplace and decided that they can provide a better experience to the status quo, be they fast food restaurants or the chains like TGI Fridays and developed strong brands with very unique offerings. For these new players, their brand is such a powerful draw that in the case of Shake Shack, people will go out of their way to experience it.
The world of branding is certainly going through monumental change, but this doesn’t mean brands are going away anytime soon.
In the new 2014 world of disruptive Internet players, just look at taxis and hotel rooms with the likes of Uber and Airbnb respectively; here a strong brand is everything. The brand is the new experience and you hear users talk about both these services with a smile on their face and often have stories to tell about how great these experiences were. For a certain generation, using Uber and AirBnB are today’s symbols of smart status. These are in no way diminished or weak brands, but ones that thrive because their leverage the network to drive positive word of mouth and therefore awareness and usage.
The problem for these brands and this hits on Surowiecki’s point, is the challenge of maintaining their strong product advantage, should they slip or miss a beat, they are open to being usurped by a savvy young start up who does something just a little bit better. In most cases, these brands are smart enough to recognize the challenge and have raised the necessary capital to help them achieve both critical mass and endless array of features to keep their customers happy.
If the more traditional players like packaged goods have a problem, it’s not because their brands are any less relevant, it’s the challenge of communicating of a world of shrinking attentions. For these players, disloyalty has always been a part of their reality, they know there are only a finite group of consumers who stick to one brand, and most play the field. The brand marketer’s job is to find smart and interesting ways to capture saliency, so consumers pay attention to their brand and have it top of mind.
Technology is a space where we see the fast pace of innovation is visible in a morphing and transforming brand landscape. What the Internet and its innovations like Kickstarter have done is to accelerate the growth of brands that truly deliver something unique, different and special. Pebble has come from nowhere to in two years becoming one of the most talked about players in the new wearables market. Then there’s Nest, who, again through innovation, consumer understanding and the smart application of technology have disrupted the dusty thermostat category and turned it into something infinitely more sexy and built a strong brand by delivering on the product experience.
The moral of this story is that brands can no longer get away with things be they inferior products, experiences or faux pas in the word of business or social media. They are being watched, reviewed and commented upon, often in real-time. They can no longer afford to relax, instead they need to keep thinking about how they can improve or add to their brand offering- it might even mean product brands need to imagine how they can create a service dimension.
In a world of constant scrutiny, those brands who find ways to over-deliver with their products, services and experiences, will not just survive, they will thrive.
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