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Blog | Sep 24, 2019
What does the next generation of successful brands have in common? Here’s the answer by Robin Bade — Entrepreneur, Investor, Agency Founder, and Maki.vc Advisor.
During the past two decades, we have witnessed a new breed of brands that create rapid awareness and traction with the help of globally-spread online channels and communities. Through them, reaching thousands of potential customers today costs a fraction of what it used to cost 20 years ago. This opportunity has been tapped by digitally native brands — brands that have built everything, from their supply chain to margin and cost structure, by following a digital business model.
“Realizing this unfair advantage provided by the web led the first generation of digitally native brands into so-called hyper scalability. These Airbnbs, Amazons, and Ubers were all about growth, growth, growth — from head to toes — interacting, engaging and transacting on the web,” explains Bade.
They were the digital first-movers and gained a competitive edge by being more accessible to consumers. But that’s no longer enough. Even some of the legacy businesses like Walmart have caught up with early-adaptors. Being digitally advanced is no more a clear differentiator: everyone says and does that, everyone is more accessible.
So, what is the next thing every brand does not yet say, and more importantly, does not yet do?
“Google was probably the first one to shout out aloud ‘not being evil’ as their guiding principle. But everyone forgot good intentions very fast, perhaps Google too. Yet today, it seems that the next generation of digitally native brands are starting to live up to these words. They are doing good — not only growing for the sake of growth.”
Bade sees that the next generation of successful brands need to start from somewhere else than accessibility. They need to narrow “the purpose gap” — the gap between what brands do (their current purpose) and what matters to their audience (their desired purpose). Only after that, they can focus on growth.
“Purpose is what matters, and purpose can be anything that the audience wants to relate to. Giving back to the community, being sustainable and responsible, allowing tailor-made and value-based options… I mean, the next generation of consumers are increasingly looking for a purpose and there is no reason why a brand could not be standing for one. In fact, they must be standing for one”, highlights Bade.
In addition to purpose-driven actions, upcoming brands must also behave, as he puts it, like “underdogs, disruptors, and renegades”. Because that’s what they are — the new different in the market. Still, they do share something fundamental with their predecessors.
“Even though the next generation of digitally native brands has it in their DNA and business model to do good, they are not incompetent to grow. It’s very fascinating and promising that these rebel brands are not less scalable or less growth-ready than the previous generation but quite the opposite!”
Here are three examples of brands, picked by Robin Bade, that show in practice what the next generation is all about. Each of these brands follows the guiding principle of next-generation digitally native brands: be purpose-driven. However, their branding strategies are different.
Lululemon — community-based branding strategy
Lululemon, a Canadian yoga and fitness apparel brand, has doubled down on a community approach and is growing like never before. Since its founding in 1998, Lululemon has always targeted its branding towards the yoga community. This is a brand that has positioned itself as an essential member of a cultural movement and has thus won people’s emotional connection — the feeling of belonging.
Lululemon gives back to the community, for example, by allowing yoga teachers to host yoga and meditation classes in their storefronts. The brand has achieved a position of a facilitator rather than a spokesman for a community — and that’s what people are celebrating them for.
Casper — vertical branding strategy
Casper, who claims they are making “the best beds in the world”, is a good example of the ongoing revolution in retail. In the US, for example, Amazon stands for 50% of e-commerce sales and forces brands to rethink their online strategies. In other words, Amazon has become the online mall while brands need to take the role of a specialty shop. These specialty shops utilize a vertical branding strategy.
Casper is one of the emerging brands in this category of digitally native vertical brands. They have an end-to-end approach to business, controlling the whole supply chain from sourcing and product manufacturing to delivering the bed to their end-customer. Brands like this must control the whole customer experience — from warranty to installation — to gain an unfair competitive advantage against their competition.
Casper has done it successfully. Every detail is considered to enhance the bed experience from ordering and unpacking it to sleeping on it. They have achieved a cult-like following and great reviews all around the web. After all, people carry out thorough research before spending their money on a new bed — and Casper knows that.
United by Blue — Mission-based branding strategy
United by Blue is relying on the third common purpose-driven branding strategy: the mission-based branding strategy. “For every product sold, United by Blue removes one pound of trash from our world’s oceans and waterways” starts their mission statement. That’s a special twist for an otherwise pretty traditional business like a clothing company. United Blue has a strong social cause that is attracting both customers and new employees to support the company’s growth. These guys are walking the talk, having their leaders showing an example — that’s something you can’t say about all brands.
Finally, the last example by Bade is not a brand but it quite well represents the time we are living. While his kids, aged 7 and 10, had their first business assignment at school, they presented it to their parents:
“Every single of their class’ 15 ideas was set out to do something good — to have a deeper purpose for their existence that only profitability and growth. And it was not in the brief that it was something you were meant to do. This is an indication that in the future, doing good might no longer be a competitive edge — it will be a foregone conclusion for success”, Bade closes.
Robin Bade was the Founding Partner of Mirum, a creative agency with 2500+ employees working in 30 countries. He is one of the 74 LPs of Maki House, specializing in guiding companies towards more brand-driven growth.