You might want to sit down for this one: the world of branding is changing.
Oh, you knew that already? You might have observed new types of brands and services that are becoming immensely popular as of late, like Spotify or Uber. Perhaps you’ve noticed that the types of messages brands are communicating with us now have a different focus than they used to. All these shifts in the branding world have grown increasingly more visible as of late, and they are not simply overnight sensations – they’re an indication of how the field is changing. Let’s have a look at identifying and analysing three big trends that have emerged and how they might shape the future of branding.
The first of these big trends is the changing role of the consumer, namely the increase in consumer power. We have noticed and experienced this change happening gradually over the past decade, led most notably by the influx and influence of social media. The second trend is the changing role of brands and the greater expectations that are being pushed upon them by the newly omnipotent consumer. The third trend is the changing environment of brands as a whole, preparing for the rise of non-Western brands. These three trends show how many different aspects of the branding world are changing, and below, we can see how they relate to each other.
1. Consumers as Reviewers, Creators, and Active Do-ers
Previously, consumers lived up to their title and did exactly that: they consumed. They took in everything brands threw at them and stopped nowhere to question the process. It was a simple one-way transaction. Now, however, the consumer is no longer a passive recipient. Advances in digital technology helped introduce a new era heralding the empowered consumer. Two-way communication channels via social media and review sites like Yelp and TripAdvisor finally gave consumers a voice, allowing them to weigh in on their firsthand experiences with brands. The growth of the online community spawned the creation of specialised online forums, where users can now discuss everything from handbags to cars to parenting. For the immensely popular video hosting site YouTube, it is not only about watching videos but creating new content to be shared on the site, shifting people from consumers to creators.
Because of these newfound capabilities, consumers began questioning the validity of what brands were selling to them, growing increasingly savvy and sceptical. They saw, through user-created content sites like YouTube, that they had the ability to use each other as resources. Due to growing dissatisfaction and distrust in corporations, frustrated consumers continued to look to each other for answers. Companies that emerged were based on models that thrived on its user communities. These were companies like Airbnb or Etsy, which meant that there was finally an alternative to exorbitant hotel rates or a way for amateur artisans to sell their handmade crafts online. Etsy’s founder Robert Kalin described the growth of its customer base as a “backlash” against huge corporations like Wal-Mart. While these new services and companies are obviously not going to shake up established supply chains and dominating brands (not overnight, anyway), the shift towards market-based solutions remains noteworthy.
2. Brands as Engaged Citizens
The relationship between brands and consumers has always been directly linked, so naturally, with these crucial consumer-based changes come necessary changes for brands. Consumers expect more from corporations today and rightly so. Three main reasons behind these increased expectations are due to the government falling short, consumers interacting more closely with brands, and the empowered public demanding payback. Bureaucratic structures of governmental organisations are far too unwieldy to enact any appropriate change, so consumers look to corporations for help. And because of the way brands have embedded themselves into our lives, people feel like they should be able to utilise this close relationship. Furthermore, these savvy consumers realise the huge power (and huge profits) corporations possess, so they are expecting them to do more – fittingly, the age-old adage “With great power comes great responsibility.” Within this ‘do more’ mentality, brands are asked to undertake corporate social responsibility, appear transparent and authentic, and remain flexible and open to change.
In addition to corporate social responsibility, brands are increasingly required to be absolutely forthcoming with their consumers. Brand expert Peter Schmidt-Hansen places much emphasis on the need for transparency from brands, emphasising that “there mustn’t be anything hidden away. Sooner or later, someone is going to find out if a brand is doing something it shouldn’t be doing – if it’s treating its employees badly, if it’s causing pollution, if it’s not very energy-efficient, if it’s making statements that it can’t support. Someone is going to find out, and it’s going to be out there, so there’s got to be total transparency.” Going even further, what can turn a decent brand into a truly outstanding one for consumers is the concept of authenticity. An element of transparency lies in being seen as “authentic,” but brand scholar Michael Beverland details his seven habits of authenticity quite clearly. Some of the habits are about the best ways for people to engage with the brand, for example through storytelling to its consumers or indoctrinating staff into the brand. Other habits allow brands to differentiate themselves a bit, by staying true to their roots or appearing as specialty artisans. These give brands a heightened sense of individuality and the “something special” that lends itself to a brand’s overall charm. An example of this is Innocent smoothies, whose low-key, startup roots are reflected in their casual and friendly brand personality. The language used on the website and packaging is informal and sometimes downright cheeky; signing up for their email newsletter on the website, you’re promised “love, friendship, a weekly newsletter.”
Lastly, brands need to remain flexible and open to change. With the increase in consumer power, consumer needs are made much more public, which should only make it easier for brands to respond. As it has seemingly become the consumers’ turn to talk, brands now need to be good listeners. But, as you might have guessed, passive listening is not nearly enough. As soon as a brand starts to be sluggish and merely reacts belatedly to what people need, it loses its competitive edge. By staying nimble and evolving with the changing times and anticipating needs of consumers, brands will continue to stay relevant.
How have these concepts of transparency, authenticity, and flexibility become so vital for brands to address nowadays? In today’s oversaturated marketplace, brands need to be honest with consumers and make themselves stand out. They can also achieve greater levels of consumer connection and loyalty by showcasing their idiosyncrasies through authentic habits. And because of the new technologically-savvy, critical consumer, brands need to continually improve and innovative to impress them. These features become increasingly important when we look at the last of our big three trends.
3. The Branding World as a Global Environment
Traditionally, Western economies held the reigns of global dominance, especially with the powerful brands that come from these countries, like Apple, Burberry, and Rolex, to name a few. But in the developing BRICS countries, there has been much discussion around the possibility of a significant future trend — the shift away from these “foreign” brands to local brands, or in other words, the rise of non-Western brands.
Some experts suggest that consumers are finding these new local brands more attractive, citing improved quality and lower price, “buy domestic” campaigns, or increasing disenchantment with foreign brands. While it is true that many Western brands are still successful in countries like China for example, the mindset of “west is best” grows increasingly outdated. Anti-western rhetoric is simmering over embedded resentment at the Western tendency to dominate. In the first trend discussed, we saw that consumers are now more open to alternative brands because they are fed up with existing brands not meeting their needs. These are not only global consumers who want to see homegrown brands from their own countries, but also increasingly consumers in Western countries who encourage competition in the marketplace. This, with the growth of BRIC countries, allows a wide and welcome berth for new brands from these emergent economies.
Western brands do have the advantage of historically utilising their brand heritage and authenticity well, so that presents non-Western brands with the issue of determining how they can do the same, if they can. Additionally, non-Western brands have several other crucial branding hurdles to clear first, such as realising the difference between brand awareness and equity, offering a clear and relevant brand proposition, and allowing that proposition to drive unified, coherent messaging. However, as Western brands were able to familiarise themselves with these practices, it is only a matter of time before non-Western brands can do so as well. Ironically, in a homogenous world of globalisation, heterogeneity becomes even more essential. And it will not just end with the development and climb to power of these BRICS countries. There have already been talks of the new set of emerging economies, the MINT countries: Mexico, Indonesia, Nigeria, and Turkey. Clearly, there will continue to be more, if we simply look at the future of these trends.
Suggestions for Academia & Actions for Brand Managers
In order for the branding world to fully grasp and better understand these changes, we need to call upon the discerning minds of academics. Further research must be done to examine in detail the challenges non-Western brands need to overcome in order to successfully enter the market. Even an increase in the research itself could be the key to popularising and promoting the importance of brand for non-Western countries. Earlier we looked at some key issues that Chinese brands need to conquer before they can become potent contenders in the arena of branding. Greater analysis of these obstacles might also actually spur solutions, which could potentially mean new and different approaches to branding.
From this, a more realistic timeline of their growth might emerge, which would allow existing brands a window of opportunity to respond. In this window of second chance, brand managers need to heed the suggestions that were put forth: being transparent, authentic, and flexible. Brand managers cannot be content, even if they currently are industry leaders like Kodak once was. They must be proactive. They constantly need to be thinking of innovative ways to attract consumers and remain relevant, especially against new competition from non-Western brands.