Your consumers are online, why aren’t you? Brands today have to realize the importance of the ever growing and versatile digital age while integrating any communication strategy. Digital devices have been on a rapid surge, due to which the consumer is looking to connect with the brands digitally. Your consumers, on any kind of digital media, are expecting you to digitally communicate with them. This means that any brand now has to strategize a digital plan to integrate their communication with their consumers to understand their trends, behaviors and also increase their impact, interactivity and awareness of their products and services with them.
The necessity of branding in the digital age is as important as branding itself. We have already seen what branding is in “Brand Guidelines and Why Your Business Needs Them?” In short, a brand comprises of all the elements such as the logo, color palette, typography, taglines, symbols, etc. that help you differentiate your brand from the others. It could be a product, service or even just a concept that can be communicated to the public to make you stand out from the competitors in the market. The methodology of creating a unique and distinctive personality of any product with the help of various elements is known as branding.
Similarly, branding in the digital age, which is also called as Digital Branding, is a brand communication strategy that is implemented with the use of the internet and digital marketing to enhance a brand’s attributes, establish their presence and promote the brand. It gets its roots from direct marketing and is done via certain digital platforms such as the internet itself, mobile applications, social media and most importantly, digital media content. It also comprises of all the elements such as the logo, color palette, typography, taglines, symbols, etc. The content is in reference to blogs, organic videos, e-mailers, website content, etc. with its overall appearance as well, that appeals to your target group.
Whether it is traditional branding, or digital, successful branding can only be reflected on the target consumer’s perception about your brand. This successful branding will help you enhance your brand positioning in the minds of the consumers. Hence, on the digital platforms, it is important to strategize your communication in a manner that resonates with the positioning that you wish to have. Due to digital marketing and social media, it has become easier to connect and interact with the consumer online, but it has also become easier for the consumer to change his perception about you as well. To avoid this, it is important to stick to the brand guidelines, that defines the tone, color, typography and the overall appearance of your brand, even it if is to be done digitally. There cannot be any kind of inconsistency with reference to the branding tools that are used even traditionally. Your brand should have utmost consistency on all of the digital platforms, which increases your credibility and appeal, and also increases consumer loyalty.
Differences Between Digital Branding and Digital Marketing
Importance of Digital Branding:
Autonomous Consumers: With oceans of information flowing everyday on the digital platform, the consumer is often left in dilemmatic situations, especially in case of products and services. The consumers are often “spoilt for choice”, which essentially means that you have to make your brand stand out in terms of your product and service offerings as compared to your competition. The average consumer is smarter now, due to the information about all products and services available at his/her fingertips.
Change in Consumer Behaviors: The digital age has eradicated all kinds of geographical barriers in the world today. Due to this, social trends change almost every day, which directly affect the consumer’s behavior as well. The average consumer will still desire new products and services, but their social circles, perception, psychology and research will change their decisions very quickly, which means that your brand’s communication approach has to change with the trends as well, to stay ahead of the competition.
Lesser Importance to the Funnel Model: The funnel model is a consumer’s purchase journey that follows the sequence of awareness, opinion, consideration, preference and finally the purchase. Traditionally, a consumer follows this journey and brands integrate their communication in such a manner that this funnel model is smooth. But in the digital era, the interactivity with a brand is extremely high and directly affects the purchase decision.
Engagement: Digital branding’s greatest factors are the levels of engagement and interactivity that it allows between the brand and the consumers. A consumer will definitely prefer a brand that “connects”. This requires the brand to socially engage and provide interactive content through blogs, infographics, videos, etc. regularly, as it appeals to the consumer very well.
Digital Branding, just like offline branding, has a process that is followed. This process is in such a way that the brand establishes its distinct presence and personality on the digital platforms, and makes itself stand out from the rest.
Following is the process:
Target Group: In the digital era, identifying your target group has a somewhat different approach to it. As the consumer is present on roughly 250 digital platforms today, it is important to understand and map the consumer’s journey, to understand their behavior and segment them accordingly to match the category your offering fall into. This includes specific and detailed research that help you indentify certain factors such as the consumer’s demographics, income, behavior, age, gender, etc.
Brand Values: Your brand values are the factors that drive you to excellence in product and service offerings. Clearly defining your core values and mission for your brand help you remain consistent in your communication processes and implement those values in it. Having a definitive mission and core values help consumers feel connected to your brand and it appeals to them, especially if the values resonate with their own. It has also become easier to reflect the same values in your digital communication through blogs, videos, social media, etc.
Brand Positioning: Brand positioning is the influence and impact of your brand in the minds of the consumers. It helps them make a perception of your brand, and gives you a competitive edge in an already established market. If your brand has been successfully positioned, especially on the digital platforms, it gains certain popularity through word of mouth and the most important factor of digital media — virality. Due to this, it becomes much easier to add new products to your offerings if the consumer already trusts your brand.
Brand Identity: Your identity entails your message, personality, name, logo, etc. and anything that will help the consumer recognize your product first in the digital market. Consumers today tend to buy products that enhance and uplift their own personality. Integrating a strong brand identity gives your brand very high recognition in a market that already has products that are similar to yours. For a consumer that sees thousands of brands on his screen, your brand identity is what will make him consider you first. Brand names and logos are also equally important as they increase the brand’s recall level. Your brand name should resonate with your personality and identity, and also the kind of products and services that you are offering. Your logo is your greatest persona. With successful branding, consumers can identify your product on any digital platform by just looking at the logo, and it also gives certain credibility to it.
Brand Objectives: Now that you are on digital platforms, what is it that you want to do? What are your goals and what are you promising to your target group? Your brand must have a tagline that is extremely crisp, memorable and that resonates with your personality. This same slogan can deliver or showcase your brand’s promise, and this is where you as a brand position yourself in the market. If the consumers are clear with your objectives, you will most likely be the go-to brand for them.
Color Palette: Your color palette distinctly represents your brand’s visual identity. There are certain combinations of colors that help you position yourself and abstractly talk about your brand values, and also attract a certain niche group of people. This color palette helps you remain consistent on any digital platform and provides authenticity. Colors themselves hold meaning and carry a message.
All these factors help you successfully build a brand in the digital age today. Consumers are always looking for engaging content to interact with, and the digital era has changed the way the consumers think and behave, and also the way the brand approaches them. It has become extremely vital to have a digital presence, regardless of the brand’s offerings.
COMMENTARY: Brands that developed and employed a consistent digital marketing strategy that incorporated a sound digital branding strategy across the entire spectrum of customer digital touchpoints tended to keep existing customers, win over new customers and strengthened brand loyalty during the COVID-19 pandemic.
In times of a crisis, it can be hard for businesses to know where to begin. But every company needs a digital branding strategy, especially during the new normal of COVID-19. The role of digital branding during a crisis should include creating a shared sense of an “in-it-together” camaraderie.
It’s a tougher competitive marketplace for many companies, but there is good news and that is, everyone is home, online and paying attention to different digital mediums. Many companies have been pushed forward into realms they were originally uncomfortable with, yet have been finding success and opportunities, which will ultimately drive how business moves forward when recovery comes.
Companies are adapting to a completely digital environment and consumer mindset (see above) during the COVID-19 pandemic. And brands are adjusting and innovating with new creative, pivoting to virtual events and digital solutions. A marketing tactic that was once unfamiliar to some is being fast-tracked partly due to the coronavirus pandemic. After some initial messaging about the disruption in business operations resulting from the coronavirus, companies are back to marketing. Without a physical product to ship, they have been diving deep into nurture campaigns and lead generation, planning for a successful future.
This “new” way of doing business online ensures that consumers have anything and everything they want, literally at their fingertips and in real time. Companies are presenting products digitally and substituting in-person events for webinars, virtual tours and video calls. It’s prime time for moving more heavily into social media, case studies, blogs and other thought leadership content to engage people now, as they are seeking escapism, entertainment and information.
Branding efforts need to remain strong, so customers will recognize, remember and consider your products or services amidst your competitors. What is important is how you portray your brand. What is your brand promise, beyond your products? How about your company’s value proposition? It is a great time to determine how you can make the same offering for people in a virtual setting. Track human behavioral trends, associate your brand with good, use social media to pivot as circumstances change and turn to digital mediums to connect with customers.
Creating a brand doesn’t happen overnight. It takes consistent work, long-term goals, digital strategy research, creativity and the right platforms. To create a digital branding strategy, you should:
The U.S. Food and Drug Administration approved a new antiwrinkle treatment that could be the most formidable challenger to date to market leader Botox.
Analysts say the drug, from Revance Therapeutics, poses a threat to the market-dominating anti-wrinkle treatment because it promises to last longer. Revance plans to market Daxxify as a luxury item and emphasize its longer duration than Botox and other toxins.
For about two decades, Botox, now sold by AbbVie Inc., has dominated the aesthetic-drug market it helped pioneer, racking up tens of billions of dollars in sales and successfully fending off challengers.
The FDA’s approval of Revance Therapeutics Inc.’s Daxxify introduces a new rival that doctors and analysts said could succeed carving out a big slice of a lucrative and fast-growing market by promising to last two months longer than Botox’s four months.
The FDA approved Daxxify, also known as daxibotulinumtoxinA, for the temporary improvement of frown lines in adults, Revance said Thursday.
The decision, analysts and doctors said, should touch off a fierce battle between upstart Revance and industry giant AbbVie, which acquired Botox as the centerpiece of a $63 billion deal for its manufacturer in 2020.
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“This marks what we think is the first real competitive threat to Botox,” said Cowen Inc. analyst Ken Cacciatore, who expect011s Daxxify to generate $1 billion in sales as early as 2030.
Botox, derived from the poisonous Botulinum toxin bacteria, blocks signals between nerves mand muscles, causing the muscles to relax. A doctor originally developed the drug to treat an eye disorder, before patients noticed it smoothed their wrink,m1 les.
The discovery prompted a company called Alle rgan to pursue Botox’s cosmetic use, which the FDA granted in 2002, launching a new market for p5mkroducts and procedures that enlarge lips, fill in cheeks and sculpt other body parts.
That aesthetics market was worth $14.6 billion worldwide last year, according to the Aesthetic Society, a professional society of plastic surgeons. Physicians in the U.S. performed about 4.4 million procedures involving Botox and two of its rivals in 2020, the American Society of Plastic Surgeons said.
The aesthetics market has been growing 10% annually, but could increase more rapidly over the next few years, according to McKinsey & Co., driven in part by a proliferation of med spas and social-media-inspired awareness among young people.
The Botox brand name has become a fixture in America’s cultural lexicon, like Band-Aid and Kleenex.
Despite facing a raft of competitors, Botox holds about 70% market share. The drug’s profitability attracted AbbVie, which sought the product as it girded for lower-priced competition for its top-selling drug Humira.
Botox sales totaled more than $4.6 billion last year, up more than $1 billion from the year prior as people working from home because of the pandemic sought to look good in video calls and returned to seeing their aesthetic doctors in person.
Botox is also approved for therapeutic uses. It lasts up to four months, according to the product’s website.
The Revance drug threatens to eat into Botox sales, which last year made up roughly 8% of AbbVie’s $56 billion revenues, behind only Humira’s roughly $20 billion in sales and the $5.4 billion from blood-cancer treatment Imbruvica.
To counter the threat, AbbVie has said it is investing more in its aesthetics business, spending more on R&D, consumer advertising and expanding its sales force in the U.S. as well as China, which the company said is a growing market.
AbbVie has said it is developing a toxin whose wrinkle-reducing duration could last longer than the approved version of Botox and a fast-acting one that has shorter duration.
AbbVie declined to comment.
Revance is taking a different tack than older Botox rivals like Dysport, made by France’s Ipsen Biopharmaceuticals; Xeomin, made by Germany’s Merz Group, and Evolus Inc.’s Jeuveau. The rivals primarily tried to compete on price, according to doctors and analysts.
Rather than discounting its drug to reach a mass market, Revance plans to market Daxxify as a luxury item to high-volume injectors in the U.S. and emphasize its longer duration than Botox and other toxins, Chief Executive Mark Foley said.
The company hasn’t disclosed pricing but has said it expects physicians to pay more than they do for existing toxins. As with other antiwrinkle toxins, doctors would purchase Daxxify directly from Revance and then bill patients, rather than insurers.
“We’re going to be introducing a product that we’re not trying to say is everything to everybody. Now, you can choose,” Mr. Foley said.
Daxxify will face big obstacles, doctors and analysts said, such as overcoming the loyalty of doctors and patients who are longtime Botox customers.
AbbVie can also sell Botox with its other aesthetic products like fat-removing CoolSculpting and dermal filler Juvéderm in exchange for discounts. And physicians will need to be trained to use Revance’s drug because it is prepared and administered differently than Botox.
In a survey of 25 physicians last year by Truist Securities Inc., nearly two-thirds said the new Revance drug would account for none to a small amount of their toxin usage, while most of the remaining physicians surveyed said it would account for a moderate amount of usage.
The FDA was slated to decide on Daxxify in 2020, but pandemic-related travel restrictions delayed the agency’s inspection of Revance’s manufacturing facility in Newark, Calif., according to the company. Several months after completing the inspection last summer, the FDA declined to approve the drug, which Revance said was due to manufacturing concerns.
After resolving those FDA concerns, Revance requested approval again and has since addressed all the agency’s subsequent issues, Mr. Foley said.
In a pair of late-stage trials studying about 600 total subjects, about a third of patients who received the product maintained either no or only mild wrinkles after about six months, according to Revance.
Similar results were reported by researchers in a subsequent open-label trial of about 2,700 subjects. No safety concerns were observed in the studies, according to the company.
COMMENTARY: The idea that you can market Daaxify as a "luxury" prescription facial injectable wrinkle remover makes me want to laugh. Differentiator strategy? The only point of differentiation that Daaxify can really claim is that it lasts two months longer than Botox. AbbVie has an answer for that: AbbVie already developed a longer-lasting version of Botox, so Daaxify's advantage will not last very long when they go head-to-head. Don't know the difference in price between Daaxify and Botox in order to say Daaxify can compete on price. New entrant into the market? I have never considered being new into a market a competitive advantage. Nobody really knows you. If the Revance Therapeutics, maker of Daaxify were part of Pfizer, I might worry.
Botox dominates the market for wrinkle remover facial injectables with a 70% share of the global market. It is well entrenched and Botox is the go-to wrinkle remover facial injectable drug by doctors. Marketing Daaxify as a "luxury" just does not compute with me. I wasn't aware that there was a "luxury" market segment for wrinkle remover facial injectables. Will dermatologists ask their patients, "Do you prefer the newer Daaxify or the more popular regular Botox or the newer advanced version of Botox that also lasts eight months?"
AppVie's Botox has huge advantages over new market entrants: well branded, loyal customers, better or superior product, distribution channels (doctors) all locked-up, huge product development team, and deep pockets to protect its market position. It's a Lovemark brand by any definition. Those are huge castle walls to climb and a huge moat to cross.
Sorry, Daaxify.
How Big is the wrinkle remover facial injectables market? Here are a few facts:
Factors driving the growth and use of facial injectable products to remove wrinkles are as follows:
Demand For Anti-Aging Aesthetics - A growing focus on physical appearance among consumers, especially among women, has led to an increased demand for facial injectables in recent years.
Increased Demand For Minimally Invasive Procedures - Consumer awareness regarding minimally invasive procedures due to various beauty campaigns being organized by key players in the market is also a driving factor for market growth.
COVID-19 Pandemic - The ongoing COVID-19 pandemic has increased the time spent on video calls. Known as the ‘Zoom Boom’, several adults are becoming more aware of their appearance. This has increased demand for cosmetic surgeries, with Botox being one of the most popular products preferred.
According to market research by Grand View Research, the global facial injectable market size was valued at USD $16.1 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.
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Vantage Market Research states that the global facial injectable market is driven primarily by new product launches and the market is estimated to reach USD $7.5 billion by the year 2028.
On the basis of product, the Anti-Aging Market is segmented into four segments:
Anti-Wrinkle.
Hair Color.
Ultraviolet (UV) Absorption.
Anti-Stretch Mark.
The Anti Aging sector is currently dominated by anti-wrinkle products, which account for the majority of sales. Anti-wrinkle products had the largest market share in 2021, and significant growth is expected by 2028. Because of the harmful effects of cosmetics and chemical-based products, natural products are predicted to expand at the fastest rate.
According to market research by Grand View Research, the U.S. facial injectable market size was valued at USD $5.6 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 9.1% from 2022 to 2030.
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The anti-aging market is segmented demographically into four segments:
Generation X.
Generation Y.
Generation Z.
Baby Boomers.
Generation X has dominated the Anti Aging industry in terms of revenue. Increased disposable income and a greater focus on physical appearance would both help the market flourish. Over the forecasted period, the demographic group Generation Y is likely to grow at a high rate. The target demographic is millennials who are familiar with high-end premium brands like Estée Lauder and Elizabeth Arden. Premium skincare brands are becoming increasingly popular among millennials.
On January 23, 2019, Whitney Lundeen, founder of Sonnet James, a maker of dresses for active mothers, appeared on the Shark Tank in hopes of securing a business partner and financial investor to contribute $350,000 in exchange for 25% equity in her company, a $1.4 million business valuation.
Sara Blakely, a Shark Tank visiting judge and investor who likes to invest in female entrepreneurs, noted that Sonnet James produces dress designs similar to many other producers, but accepted Whitney's deal for $350,000 in exchange for 25% of her company because she liked Whitney very much.
Kevin O’Leary, a regular Shark Tank judge complimented Whitney on a job well done and said that he felt her presentation was the best clothing presentation they have seen over 10 seasons of Shark Tank.
Whitney is a single mom of two boys who developed the Sonnet James line of women’s dresses to allow moms to have one outfit for every occasion. Whether they are in a business meeting, out to dinner, on the playground or riding bikes with their kids, women would have an option for clothing that is comfortable and fashionable for all occasions. Not only has Sonnet James introduced a high-quality product into the mothers market, but they have also created a network of moms which is very important for brand awareness and advocacy.
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As Whitney explained to the Sharks, the idea for her company came about when she got tired of mom-look staples like yoga pants and wanted to come up with something fashionable, but easy to clean. Lundeen elaborated.
“I was going through a difficult time in my life, and so I had this idea of making a dress that my mom could have worn that could have reminded her to play with me when I was little. And I said, ‘Alright, this year, I’m going to take the idea, and I’m going to teach myself how to sew, and I’m going to pattern draft.’ And every night, I would pretty much sit on the kitchen floor crying, trying to teach myself how to do two things I didn’t know how to do.”
The Sharks asked Lundeen to explain what she meant by the idea of the dress reminding her mom to play with her. Holding back tears, Lundeen says that she had a challenging childhood that included some abuse. She explained.
“My parents did the best they could with what they had. I found when I became a mom, I couldn’t engage with my kids as much as I wanted to. And I wanted something that could help me be the mother that I had always wanted to be, and something that could remind me every day when I put it on what my priorities were.”
Whitney wanted something fashionable, yet durable enough for rough and tumble play. She made her own dresses out of four-way stretch modal spandex. On New Year’s Day, 2013, Lundeen resolved to make her own dress line and she designed 12 different styles of what would become Sonnet James dresses. Next she sourced fabrics and started making dresses for moms.
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She got her business going back in August 2013 with a successful Kickstarter campaign that raised $58,245 and provided proof of product-market fit. That’s when Sonnet James became a real business. The dresses are playful and durable. They have the classic lines of designer dresses, but they’re safe for “play clothes.” Sonnet James designs cost between $100-$160 and come with a three-day, no hassle try-on guarantee.
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Whitney developed the Sonnet James "playtime" dress line to remind her to be a mom who is present and plays with their kids while feeling confident and put together. The dresses in the Sonnet James line are all washable and made of quality spandex fabric that has stretch and compression so that it retains its shape throughout washing cycles. Whitney has designed all of the dresses in her line as well as taught herself how to sew and how to design and create a website.
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Sonnet James operates a direct-to-consumer (D2C) revenue model through their website (see below) and had $1.2 million in sales at the end of 2018 with a 75% product margin. The average order size is 2 dresses and their rate of return is 23% which is below the retail average of 30%.
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Sonnet James dresses are made in San Francisco, from fabric produced in New York City and printed in Los Angeles. As part of a community of supportive women, it is important to Whitney that the fabric and the production house work environment are a healthy place for the seamstresses to work. As she told The Hive Magazine, even though she may pay more for the production and thereby make less profit, she wants to maintain a close, one-to-one relationship with the production end of her business. It is “important to me to feel good about where these dresses were being made.” And what is her advice for other mothers who might want to start their own business? Despite all the snags, fears, problems and long, hard hours of work, Whitney says simply: “Just do it!”
So how well has Sonnet James done since the Shark Tank investment by Sara Blakely? Sonnet James is still in business and still designs out of Whitney's home in Palo Alto. As of June 2021, Sonnet James is thriving and reported revenues of $6 million.
COMMENTARY: Sonnet James is a classic example of an entrepreneurial success story driven by incredible passion and drive and very little capital. Sara Blakely, the Shark Tank investor who accepted Whitney Lundeen's offer of a 25% share of her young company, noted that Sonnet James dresses were not much different than those made by other garment manufacturers. So what is the secret to Sonnet James success? The answer: POSITIONING, STORYTELLING and MADE IN USA
Sonnet James does not owe its success to being first-to-market, product differentiation, lowest cost producer, or even great apparel designs. Instead, Sonnet James has succeeded where others have failed in a very crowded women's apparel market through crafty storytelling, product positioning and manufacturing in the USA. Whitney Lundeen has positioned Sonnet James as a designer of "playtime" dresses for moms -- a new women's apparel category. Whitney's successful appearance on the Shark Tank is a marketing storyteller's dream. A true "rags-to-riches" story. Whitney's success post-Shark Tank has produced a lot of "free" publicity which is worth its weight in gold.
I don't know how much Sonnet James spends on paid advertising, but going from $1.2 million in revenues at the end of 2018 to $6 million by June 2021 can't all be due to positioning, crafty storytelling or manufacturing in the USA. The "Made in USA" label probably contributes to Sonnet James success for several reasons:
Job Creation - Made in he USA means creating jobs right here in the good ole USA.
Quality - Made in the USA has always stood for better quality compared to goods made in China, India or other Asian countries. Economists at The Boston Consulting group found that 60 percent of Chinese consumers are willing to pay more for products labeled “Made in the USA” than for those labeled “Made in China.”
Better For Families - Products made in America are better for consumers because they must follow American consumer protection laws and safety standards. Many foreign countries have far less extensive product safety standards than those in the United States, frequently leading to recalls and safety issues.
Addressing Poor Conditions - Many countries do not enforce the same worker safety and child protection controls of Western countries. It can be hard for companies to compete on cost with regimes willing to exploit their own people. You’re supporting a higher standard of working conditions when you buy American-made.
S0nnet James has identified or created a new category or "Blue Ocean" as described in the book Blue Ocean Strategy in the women's apparel market: "playtime" apparel for women. In 2020, there were 15.6 million single mothers living with young children in he USA. There are presently 43.5 million mothers (ages 15 to 50) in the USA. The COVID pandemic, inflation and the Ukraine war with Russia has put a brake on U.S. birth rates. Whether birth rates will continue to decline remains to be seen, but something that Sonnet James needs to keep a careful eye on going forward.
Courtesy of an article dated February 14, 2019 appearing in Business2Community, a tweet dated January 23, 2019 appearing in Twitter, an article dated February 3, 2019 appearing in Tiny Beans, an article dated May 2019 appearing in the Shark Tank Blog, an article dated January 14, 2019 appearing in Shark Tank Products, an article dated April 21, 2021 appearing in Infoplease and an article dated August 28, 2017 appearing in Made In America Movement
The necessity of branding in the digital age is as important as branding itself. We have already seen what branding is in “Brand Guidelines and Why Your Business Needs Them?” In short, a brand comprises of all the elements such as the logo, color palette, typography, taglines, symbols, etc. that help you differentiate your brand from the others. It could be a product, service or even just a concept that can be communicated to the public to make you stand out from the competitors in the marketplace.
The methodology of creating a unique and distinctive personality of any product with the help of various elements is known as Branding. Similarly, branding in the digital age, which is also called as Digital Branding, is a brand communication strategy that is implemented with the use of the internet and digital marketing to enhance a brand’s attributes, establish their presence and promote the brand. It gets its roots from direct marketing and is done via certain digital platforms such as the internet itself, mobile applications, social media and most importantly, digital media content. It also comprises of all the elements such as the logo, color palette, typography, taglines, symbols, etc. The content is in reference to blogs, organic videos, e-mailers, website content, etc. with its overall appearance as well, that appeals to your target group.
Developing your brand strategy involves two phases: brand development and brand management. (Click Image To Enlarge)
Whether it is traditional branding, or digital, successful branding can only be reflected on the target consumer’s perception about your brand. This successful branding will help you enhance your brand positioning in the minds of the consumers. Hence, on the digital platforms, it is important to strategize your communication in a manner that resonates with the positioning that you wish to have. Due to digital marketing and social media, it has become easier to connect and interact with the consumer online, but it has also become easier for the consumer to change his perception about you as well. To avoid this, it is important to stick to the brand guidelines, that defines the tone, color, typography and the overall appearance of your brand, even it if is to be done digitally. There cannot be any kind of inconsistency with reference to the branding tools that are used even traditionally. Your brand should have utmost consistency on all of the digital platforms, which increases your credibility and appeal, and also increases consumer loyalty.
Importance of Digital Branding:
Autonomous Consumers: With oceans of information flowing everyday on the digital platform, the consumer is often left in dilemmatic situations, especially in case of products and services. The consumers are often “spoilt for choice”, which essentially means that you have to make your brand stand out in terms of your product and service offerings as compared to your competition. The average consumer is smarter now, due to the information about all products and services available at his/her fingertips.
Change in Consumer Behaviors: The digital age has eradicated all kinds of geographical barriers in the world today. Due to this, social trends change almost every day, which directly affect the consumer’s behavior as well. The average consumer will still desire new products and services, but their social circles, perception, psychology and research will change their decisions very quickly, which means that your brand’s communication approach has to change with the trends as well, to stay ahead of the competition.
Lesser Importance to the Funnel Model: The funnel model is a consumer’s purchase journey that follows the sequence of awareness, opinion, consideration, preference and finally the purchase. Traditionally, a consumer follows this journey and brands integrate their communication in such a manner that this funnel model is smooth. But in the digital era, the interactivity with a brand is extremely high and directly affects the purchase decision.
Engagement: Digital branding’s greatest factors are the levels of engagement and interactivity that it allows between the brand and the consumers. A consumer will definitely prefer a brand that “connects”. This requires the brand to socially engage and provide interactive content through blogs, infographics, videos, etc. regularly, as it appeals to the consumer very well.
Digital Branding, just like offline branding, has a process that is followed. This process is in such a way that the brand establishes its distinct presence and personality on the digital platforms, and makes itself stand out from the rest.
Following is the process:
Target Group: In the digital era, identifying your target group has a somewhat different approach to it. As the consumer is present on roughly 250 digital platforms today, it is important to understand and map the consumer’s journey, to understand their behavior and segment them accordingly to match the category your offering fall into. This includes specific and detailed research that help you indentify certain factors such as the consumer’s demographics, income, behavior, age, gender, etc.
Brand Values: Your brand values are the factors that drive you to excellence in product and service offerings. Clearly defining your core values and mission for your brand help you remain consistent in your communication processes and implement those values in it. Having a definitive mission and core values help consumers feel connected to your brand and it appeals to them, especially if the values resonate with their own. It has also become easier to reflect the same values in your digital communication through blogs, videos, social media, etc.
Brand Positioning: Brand positioning is the influence and impact of your brand in the minds of the consumers. It helps them make a perception of your brand, and gives you a competitive edge in an already established market. If your brand has been successfully positioned, especially on the digital platforms, it gains certain popularity through word of mouth and the most important factor of digital media — virality. Due to this, it becomes much easier to add new products to your offerings if the consumer already trusts your brand.
Brand Identity: Your identity entails your message, personality, name, logo, etc. and anything that will help the consumer recognize your product first in the digital market. Consumers today tend to buy products that enhance and uplift their own personality. Integrating a strong brand identity gives your brand very high recognition in a market that already has products that are similar to yours. For a consumer that sees thousands of brands on his screen, your brand identity is what will make him consider you first. Brand names and logos are also equally important as they increase the brand’s recall level. Your brand name should resonate with your personality and identity, and also the kind of products and services that you are offering. Your logo is your greatest persona. With successful branding, consumers can identify your product on any digital platform by just looking at the logo, and it also gives certain credibility to it.
Brand Objectives: Now that you are on digital platforms, what is it that you want to do? What are your goals and what are you promising to your target group? Your brand must have a tagline that is extremely crisp, memorable and that resonates with your personality. This same slogan can deliver or showcase your brand’s promise, and this is where you as a brand position yourself in the market. If the consumers are clear with your objectives, you will most likely be the go-to brand for them.
Color Palette: Your color palette distinctly represents your brand’s visual identity. There are certain combinations of colors that help you position yourself and abstractly talk about your brand values, and also attract a certain niche group of people. This color palette helps you remain consistent on any digital platform and provides authenticity. Colors themselves hold meaning and carry a message.
All these factors help you successfully build a brand in the digital age today. Consumers are always looking for engaging content to interact with, and the digital era has changed the way the consumers think and behave, and also the way the brand approaches them. It has become extremely vital to have a digital presence, regardless of the brand’s offerings.
Courtesy of an article dated September 30, 2019 appearing in Interics Designs
Digital marketing transformation refers to the shift from digital complacency and reliance on traditional marketing to the active pursuit of digital excellence through the proper usage and optimization of your digital channels.
The main difference between digital and traditional marketing is the medium through which an audience encounters a marketing message. While traditional marketing uses traditional media like magazines and newspapers, digital marketing uses digital media, such as social media, search and websites.
Digital transformation is essential in achieving business sustainability, competing better in an economic environment that is constantly changing in response to technology evolutions and economic disasters brought on by pandemics like COVID19.
One of the biggest reasons digital marketing has become so important is the engagement it brings – you can converse with your prospective and current customers, answer questions and resolve issues. You can also interact with a wider audience, meaning you can do more than just sell.
The following infographic presents 14 digital marketing predictions to help brands implement a digital marketing transformation and prepare their digital marketing strategies for the year 2022 and beyond.
Courtesy of an infographic by Liana Technology based on several sources between 2017 and 2020
Over the last two decades of building and running businesses, and the last couple of years working full time with dozens of startup founders and CEOs on their strategies and funding plans in my consultancy business, I have observed that there are a common set of reasons that startups struggle and fail, and a consistent set of factors that make startup companies successful.
I wondered if my observations were supported by hard data, and my curiosity around startup success and failure eventually got the best of me. I decided to do some in-depth investigation around this topic. I wondered if there were any research studies that showed why startups succeed and fail? I found several articles that were filled with unsubstantiated opinions and a few sources that had really great hard research around the topic.
Why do companies fail?
According to an article in FastCompany, "Why Most Venture Backed Companies Fail," 75 percent of venture-backed startups fail. This statistic is based on a Harvard Business School study by Shikhar Ghosh. In a study by Statistic Brain, Startup Business Failure Rate by Industry, the failure rate of all U.S. companies after five years was over 50 percent, and over 70 percent after 10 years.
This study also asked company leadership the reason for business failure, giving a list of four main reasons for failure with sub-categories below those. They also gave a list of 12 leading management mistakes. It is worth checking out the details. This research-based analysis confirmed some of my observations. I bracket the Statistic Brain finding into seven key reasons for that entrepreneurs experienced business failure:
Lack of focus
Lack of motivation, commitment and passion
Too much pride, resulting in an unwillingness to see or listen
Taking advice from the wrong people
Lacking good mentorship
Lack of general and domain-specific business knowledge: finance, operations, and marketing
Raising too much money too soon
All of these focus on the decision-making of the entrepreneur and general business knowledge.
In another study, CB Insights looked at the post-mortems of 101 startups to compile a list of the Top 20 Reasons Startups Fail. The focus was on company level reasons for failure. I think this list is instructive, but each of these reasons for failure is due to a failure in leadership at some level. The top nine most significant from this study are:
No market need
Ran out of cash
Not the right team
Got outcompeted
Pricing/cost issue
Poor product
Need/lack business model
Poor marketing
Ignore customers
Notice that all of these are business- and team-related issues, even the ones that relate to the product. Issues like there are always tied to leadership and the leader’s ability to build a strong team and drive a business model and business thought process and discipline. Also, keep in mind, if running out of money is the ultimate reason for failure, there are always other factors that cause this result.
Why do startups succeed?
Next, I looked for sources of information of why businesses were successful. I found some good research from Harvard Business School, Performance Persistence in Entrepreneurship, which suggest that serial entrepreneurs that have prior success are more likely to have success, and that the best VCs are good at picking serial entrepreneurs. However, that really didn’t answer my question about the qualities of the entrepreneur.
The best comprehensive research that helped to answer the “reasons for success” question that I could find was from The Ecommerce Genome by Compass in their Startup Genome report, which looked at 650 internet startups. Although this research is tech industry specific, I still think it is very instructive. The report stated 14 indicators of success. Some of the 14 were a bit redundant, but you should review the report yourself. This analysis also confirmed some of my observations. I bracketed these 14 indicators into nine key factors for success:
Founders are driven by impact, resulting in passion and commitment
Commitment to stay the course and stick with a chosen path
Willingness to adjust, but not constantly adjusting
Patience and persistence due to the timing mismatch of expectations and reality
Willingness to observe, listen and learn
Develop the right mentoring relationships
Leadership with general and domain specific business knowledge
Implementing “Lean Startup” principles: Raising just enough money in a funding round to hit the next set of key milestones
Balance of technical and business knowledge, with necessary technical expertise in product development
Are the reasons for success the opposite of those for failure?
There are things that you must possess to be a successful entrepreneur, but they won't guarantee success. That said, it stands to reason that if you fixed the reasons for business failure, you would at least improve your chances of success. So, I decided to look at the side-by-side comparison of the reasons for failure and the factors for success.
If you look at both the reasons for failure and the factors for success, it is clear that commitment to a plan is key. This, of course, implies having a plan. This does not mean that you are completely inflexible, but you can stay the course. This is why the most successful companies have one or two pivots. I do not think that every little business adjustment or fine-tuning as a pivot.
A true pivot is a change in course of direction that results in a material change in the product-market strategy. It could be along the product axis or the market axis, but it has to be enough of a change that it really requires an adjustment in strategy and a corresponding adjustment in resource allocation. At least, that’s my definition. Passion and motivation are the obvious factors. Every entrepreneur, business coach, consultant, advisor, newscaster, investor and industry analyst talks about passion. Steve Jobs is quoted all the time about this. It’s probably become too cliché and overused at this point.
What I like about this analysis is that it goes to the root of the passion. People that are successful believe in what they are doing. The successful entrepreneur feels that they can make an impact and a difference in the world. There is so much inertia and negativity around getting a startup off the ground, much less getting it to “escape velocity,” that if you don’t have this deep-seated commitment to making an impact, you will surely give up. Successful entrepreneurs are competitive. They play to win, and they hate to lose. This trait may show-up differently with different personality types, but I have never met a successful entrepreneur that doesn’t have a competitive spirit and a will to win.
The next two things go hand-in-hand. I kept them separate since I think mentorship is so important, and it has played such a huge role in my career success. Just because you are willing to learn does not mean that you are willing to seek a mentor and listen to their guidance. By the way, I’m not advocating that you take every piece of advice and guidance from your mentors, but if you have selected strong mentors that have significant domain, technical or business expertise, you should at least consider thoughtfully consider what they have to say. Otherwise, why have them around as a mentor? It gets to humility. It’s one of those things when you think you have it, you don’t.
Successful startups are businesses. It therefore stands to reason that you need to establish and implement solid fundamental business principles and practices to improve your chances of success. Many technical founders fall in love with their product idea and consciously or unconsciously believe that if they build a better mousetrap, the world will beat a path to their door. However, both the success and failure studies show that you need leadership in the company with general and domain-specific business knowledge to be successful. Of course, you also need to have strong technical expertise in your chosen product development area.
Does this mean that a technical founder cannot be successful as a CEO? No, it doesn't. Look at Dr. Irwin Jacobs, the co-founder and founding CEO of Qualcomm, as a classic example. Dr. Jacobs is a brilliant engineer and former professor at MIT. However, he also has a brilliant business mind and a lot of business knowledge. Prior to Qualcomm, Dr. Jacobs ran another company, MA-Com, so he had experience running a company. He also surrounded himself with a strong management team. There are many other examples of this success formula, but there are far more where there is a seasoned businessperson who has domain expertise leading the company, and a strong technical team driving product development. Steve Jobs (Apple, NeXT, and Pixar) is the classic example as a business-oriented founder. Meg Whitman (eBay) and Eric Schmidt (Google) are great examples of CEOs who were brought into companies at an early stage to complement an exceptional team of technical founders.
Finally, having a clear and realistic idea of how long things take, setting intermediate milestones for every 12 to 18 months, and raising just enough money it to get to the next set of key milestones, is not only important to capital efficiency, it is also important for success.
How do I become a member of the $100 million club?
Interestingly, according to the Kauffman Institute, in its article The Constant: Companies that Matter, the pace at which the United States produces $100-million companies has been stable over the last 20 years despite changes in the economy. The study sates, “Anywhere from 125 to 250 companies per year (out of roughly 552,000 new employer firms) are founded in the United States that reach $100 million in revenues.” My former company, Entropic, achieved this status. How do you become part of that club? You need some luck and a good sense of timing. However, as said by the Roman philosopher Seneca, “Luck is what happens when preparedness meets opportunity.”
Beyond that, you need a plan, persistence, perseverance, a willingness to be flexible, and a world-class team. You also need to be frugal, bright, and cultivate strong mentors. The best way know to do all these things well and efficiently is to follow a systematic process where you plan, commit, track results, promote accomplishments and raise the necessary capital, or "fuel in the tank," to drive the growth of your startup.
Plan. Commit. Win.
COMMENTARY: As a consultant it always pains me when a startup client launches successfully and gains traction, but never seems to quite "cross the chasm" that all startups encounter, and must cross in order to "get to the next level." Crossing the chasm simply means helping a product, service or technology move from "early adopters" to a larger market segment, sometimes called the "early majority," in the Product Adoption Curve (see below).
Product Adoption Curve
The product adoption curve is a standard model that reflects who buys your products and when.
Think of it as the big picture view of your product adoption. It takes the product lifecycle and considers what happens at different points.
In most product adoption models, there are five distinct stages. Each stage represents an arbitrary amount of time, so what’s most important here is the process as a whole.
Now let’s break this down step by step, stage by stage.
Stage 1. Innovators
The innovators are the first group of people to invest in your product.
This is a unique group. People who buy super early are usually obsessed with technology and want to keep up with the cutting edge of technology. When the first Apple iPhone was first launched on July 29, 2007, the innovators were the very first to buy the iPhone.
What’s most important about the innovators group is its size. You might have noticed that it’s small. That’s completely normal.
This is why you might only get a few sales immediately after you launch. You’ll typically get about 2.5% of your total sales from innovators.
The Innovators
Stage 2. Early Adopters
At some point, you’ll see a swell in sales, and you’ll start to get a steadier conversion rate.
This is probably because the early adopters have arrived.
Like innovators, early adopters tend to be ahead of everyone else, willing to test the waters.
Early Adopters
Although early adopters are similar to innovators, there are some important differences.
It could be the case that early adopters have purposely waited to buy your product.
Whereas innovators are fine with rushing in and testing out something new, early adopters are a bit more hesitant. They still want to try something new, but they want a few reviews to consult.
Then again, it could be the case that they just found out about your product.
Expect your percentage of adoption to go up to about 13.5% or so.
Stage 3. Early Majority
Here’s when your product really gets some momentum going.
You’ve got a good amount of sales from innovators and early adopters. At this point, usually an even larger group sweeps in and gives you a heck of a lot more sales. Specifically, about 34%.
The people in the early majority are usually pragmatic and will only buy something once it’s been road-tested (at least a little bit) and has proven its value.
Early Majority
This is the beginning of your product’s peak. Maybe it’s gained traction with more marketing or word of mouth.
Stage 4. Late Majority
At stage 4, your product has been out for a while, and there’s widespread use.
However, there are still some people who are a bit skeptical of your product. Once they’ve put their worries to rest, they buy your product, and these people are usually in the late majority or laggards.
Late Majority
At some point during the early or late majority phase, you’ll have your peak where you get more sales than ever, and your product is at the height of its popularity.
Interestingly, in terms of adoption rates, the early and late majorities are usually roughly equal, around 34%.
Stage 5. Laggards
These are the people who buy your product after all the hype has died down. Sometimes, laggards purchase a product years after it’s been released.
Laggards might be extreme skeptics or people who have only heard about your product a long time after you launched it. Whatever the reason, these people don’t buy until much later in the product lifecycle.
The Laggards
Surprisingly, this is a pretty big group. 16% of your product adoption will come from laggards.
Try to wrap your head around the fact that laggards have a higher adoption rate than early adopters.
Change Your Marketing as Your Product Ages
At each stage of the product adoption curve, it’s likely there’s going to be certain demographics buying your product.
For example, innovators are more likely to buy on impulse, while buyers in the late majority will do lots of research before purchasing.
And as your product gets older, it will become more well-known. So you might start out with a product no one knows but end up with a product everyone and their brother has heard of.
Given these facts, consider changing your marketing messages as your product ages.
The Apple iPhone Marketing Messages Over Time
The marketing of each successive version of the Apple iPhone illustrates how Apple changed its marketing message to appeal to innovators, early adopters, early majority, late majority and laggards.
A commercial for iPhone 2showed off a lot of the hip new features: music, email, and Internet browsing, to name a few.
iPhone 2 TV Commercial
This obviously appealed to a younger, more tech-savvy audience.
Then in 2010, three years after the first iPhone launched in 2007, the iPhone 4 came out with a commercial that featured two grandparents celebrating their granddaughter’s graduation:
iPhone 4 TV Commercial
Apple wanted to show that even grandparents (who may not have understood smartphones back in 2010) could benefit from the iPhone. This is important because older consumers are typically late adopters.
Apple’s strategy was clear: Begin by showcasing all the bells and whistles, then open up the audience to include more types of customers.
In the same way, you should think about what your marketing should look like at each stage of the product adoption curve.
For example, when the innovators and early adopters come rolling in, your marketing should clearly describe the value and benefits of your product.
Later on, perhaps in the late majority stage, you can utilize customer testimonials and reviews. This can help address the skepticism that later adopters typically have.
Think about addressing the common questions that each group has, innovators will ask themselves what’s so unique about your product, while the early majority wants to know what other people think about your product and why it’s useful.
Thinking like this can completely change your marketing. By sending a customized message every step of the way, you’ll battle objections and questions head-on.
Know How to Overcome The Chasm
In most product adoption curves, there’s a point that can make or break the success of the product.
It’s called the chasm. It’s the point between the early adopterstage and the early majority stage.
The Chasm
As the chart above represents, crossing the chasm means breaking into the mainstream market. It’s one of the most difficult aspects of product adoption, but it’s one of the most important aspects to get right. There’s even a bestselling book on the topic––Crossing the Chasm.
Crossing the chasm is particularly tough to do for a few reasons. One reason is that as your product ages and grows, your audience will have higher expectations. Specifically, your potential customers will want increasingly better reasons to buy your product. You have to be ready to meet these demands throughout your product’s lifecycle, but it’s especially important in getting past the chasm.
As impulse buyers, the innovators and early adopters didn’t need huge reasons to buy your product. But to get the early majority to convert, that’s exactly what you’ll need. You have to think about your branding and not just your product. You have to offer value and not just features.
Another reason for the difficulty is the possible necessity of pivoting. In other words, to cross the chasm you may need to take a new angle for your campaign. Early on, you may be hedging on the idea behind your product. Early adopters are cool with that, but the early majority wants consistency. In other words, to cross the chasm you may need to take a new angle for your campaign. Early on, you may be hedging on the idea behind your product. Early adopters are cool with that, but the early majority wants consistency.
The Chasm
If you’re at the chasm right now, you might need to pivot yourself or even improve your product.
Don’t Forget The Laggards
You can’t stop after your product has hit its pinnacle and is riding the waves of success. It's important to remember, the second largest adoption group is laggards, coming in at 16%. A lot of people will be buying your product well after the hype dies down, and you can’t forget or alienate this audience.
Laggards are often skeptics, so at the end of your product lifecycle, your marketing should be laser-focused on overcoming objections. Think about it––you’re marketing to people who resist change and may not even want to be a customer. They’re going to need awesome reasons to invest in your brand. (A slew of positive testimonials, reviews, and press mentions will come in handy for this.)
Time also plays an important role. Think back to the iPhone example; sure, older folks are commonly seen with iPhones, but it’s been a decade since the device’s initial release. It might take a lot of time and exposure to your brand for laggards to adopt your brand.
Finally, you’ll also need to brace for the declining sales that inevitably occur at the end of the product life cycle. If your brand is experiencing one or more of these symptoms (see below) listed in the Product Life Cycle chart, its time to evaluate whether you can extend its life by introducing an improved version, replace the product with an entirely new product or dump the brand or line entirely.
Product Life Cycle
Courtesy of an article appearing in September 2014 issue of Entrepreneur and an article dated October 23, 2017 appearing in The Daily Egg and an article dated October 23, 2017 appearing in The Daily Egg
Harris Poll Study Commissioned by Lithium Finds Great Customer Experience Means More to Consumers than Great Products
What makes customers happy? And what’s a happy customer worth? Eighty-three percent of U.S. consumers say having a positive customer experience with a brand is more important than the product itself, a new study by Harris Poll of 2,000 respondents reveals. Consumers are willing to spend one-third of their disposable income – $100 per month on average – with brands they love based on a great customer experience. That’s around $31 billion up for grabs every month to brands who make their customers happy.
Experience Over Product
Brands work relentlessly on product design and features, but today’s consumer increasingly values how a brand treats them as more important than the product they sell. The Lithium-commissioned study found 43 percent of consumers would actually buy an inferior product from a brand that they had a great experience with, and 73 percent will spend more on a product if it is from a brand they love. But this works both ways, with 71 percent of consumers unlikely to ever use a brand again after only one bad experience. Worse, 44 percent would share their negative experience with friends and family, potentially leading to even more customers fleeing.
Value of A Happy Customer
The following Lithium infographic summarizes the major findings and insights from the Harris Poll:
Click Image To Enlarge
And checkout what people on the street had to say about what a great experience with a brand meant to them:
Rob Tarkoff, President and CEO of Lithium Technologies says.
“Customers’ increasingly high expectations of brands have reached a critical point. When two-thirds of consumers say they are unwilling to stick with a brand that has treated them badly even if they love the brand’s products, it’s time to sit up and take notice. Brands need to dig deeper to understand how they can create awesome experiences for their customers across platforms.”
What’s A Brand To Do?
Brands can no longer dictate terms. They must connect with the customer in the channel of their choice, which is increasingly digital. The study reveals 29 percent of consumers prefer to engage with a brand via its website/blog/social channels, compared to 17 percent who prefer in-store engagement, and 16 percent who prefer to connect over email.
Tarkoff said.
“This study shows that as consumers reach out on digital channels, they are highly sensitive to how and when brands respond to them. It’s a wakeup call for brands to realize that providing great experiences on digital is the surest path to attracting and retaining happy customers.”
Path To Happy Customers
Harris Poll, on behalf of Lithium, conducted the “Value of a Happy Customer” survey of over 3,000 adults in the United States and the United Kingdom to help us understand what it really takes to make customers happy today.
Here are a few of the highlights:
86% of adults in the U.S. and 74% of adults in the U.K. say they are willing to spend more on products and services from a brand they love.
71% of adults in the U.S. and 64% of adults in the U.K. would share a positive experience with other consumers
After one bad experience, 71% of adults say they would likely never use that brand again.
55% of adults admit they place more value on a positive experience with a brand than on the product purchased.
Key findings from this survey include:
An Emotional Connection Matters - People tend to have love/hate relationships with brands. Savvy brands today understand that creating an emotional connection with customers is the best way to keep them in the “love” zone. The majority of adults surveyed said that they would be likely to spend more on products and services from a brand that makes them happy (80%), a brand they love (80%), and a brand to which they are loyal (80%). The message is clear: when a brand is able to create an emotional connection with consumers, a stronger sense of loyalty results.
A Digital First Mindset - When consumers need to search for something specific, they flock to digital – especially via their mobiles phones – to do it. The same can be said about how consumers engage with brands. A brand’s website, blog, or social channels are typically the first stop when searching for information about products and services. About one-third of adults say they are likely to spend more on products and services from a brand that communicates with them (32%) and shares entertaining and engaging content with them (31%) via social media.
No Such Thing as Second Chances - As consumer expectations become increasingly intense, brands have got only one shot to make a good first impression. Otherwise, customers will gladly move on. They no longer have to tolerate a bad brand experience. Over 8 in 10 adults (83%) say they would stop using a brand after one bad experience while nearly 9 out of 10 adults (87%) agree that they would look elsewhere if a brand made them unhappy in any way.
COMMENTARY: In-store shopping beats the e-commerce experience across numerous customer service and relationship measures, while online shopping wins for research and pricing, according to the results of a survey of consumers who have used their mobile devices to shop. The survey, conducted by Dimensional Research and sponsored by Wanderful Media, identified several shopping-related activities and asked respondents whether they thought those experiences were better in-store or online.
Respondents more often chose the in-store option for measures such as a great customer service (40% vs. 16%), having their questions answered (50% vs. 13%), and establishing a relationship with the merchant (51% vs. 12%).
The biggest gap in favorability, though, was for the ease of making a return (64% in-store vs. 12% online). Frustrations with the return experience certainly appear to plague online shoppers, per results from aShopRunner survey conducted by Harris Interactive. About 7 in 10 online shoppers surveyed feel that returning items purchased online is a complicated process, while an even greater proportion (81%) said they are not likely to make additional purchases from websites that charge shipping on returns.
Online Shopping Makes the Grade for Research, Savings
Further details from the Wanderful Media survey suggest that consumers who use mobile devices to shop may favor the customer experience in-store, but they prefer the research and savings possibilities offered online. The online shopping experience was overwhelming favored for the breadth of information available to research purchases (71% vs. 12%), the ease of finding a specific item (59% vs. 14%), and getting the best price (57% vs. 11%), among others.
Store Browsing Leads to Impulse Purchases
Notably, respondents were far more likely to favor the online path for discovering a previously unknown product (40% vs. 16%). Still, more respondents had made an impulse purchase in the last month in a store than had done so online (74% vs. 65%), suggesting that while they find new products online, they’re more likely to try something new while shopping in a store.
In fact, browsing in a store (60%) was the leading driver of impulse purchases among respondents, ahead of email promotions (42%) and window shopping (36%). Interestingly, newspaper circulars (23%) influenced more shoppers than social media channels such as Facebook (22%), Twitter (13%) and Pinterest (13%).
9 in 10 Have Visited a Store Due to An Online Experience
Of the shoppers surveyed, the vast majority (91%) said that something they have done online has spurred them to visit a store. Emails held the biggest sway: 60% said they had visited a store after receiving an email about a special price or promotion. Close behind, finding a coupon (59%), seeing an online ad for a sale (56%), searching for a product and finding a store location (55%), and browsing an online circular (52%) also did the trick for a majority.
Other Findings:
Of various factors that may contribute to a positive experience when shopping in-store, respondents named the absence of shipping charges (64% citing as “very important”), the ease of making a return (60%), the ability to touch, smell, and see the item to be purchased (55%), and getting the item immediately (55%) as the most important.
To get the most positive online shopping experience, respondents were most likely to say that the ability to compare prices from a broad range of sources (63% citing as “very important”), the depth of information to research purchases (59%), and the ability to stay home to shop (54%) were very important.
Generally speaking, respondents preferred buying books, gifts, and consumer electronics online, and clothes, personal care products, shoes, and furniture in a store.
About the Data: The Wanderful Media data is based on an online survey conducted in December 2012 of 1027 consumers. All participants live in the United States and use a mobile device for shopping. 62% of respondents are female and a plurality (40%) are aged 36-50.
The ShopRunner survey was conducted online within the United States by Harris Interactive from December 7-11, 2012 among 3,036 adults ages 18 and older. This online survey is not based on a probability sample and, therefore, no estimate of theoretical sampling error can be calculated.
Courtesy of an article dated March 20, 2017 appearing in Lithium.com and an article dated March 30, 2017 appearing in MarketingProfs and an article dated December 17, 2012 appearing in Marketing Charts
Founded in 1998, Lululemon is a yoga and sports apparel company from Canada.
Although its first store was opened in 2000, the company sold $350 million worth of products in their 113 retail stores 8 years later.
In 2012, Lululemon was reported to have the third most productive retail stores in the US, only behind Apple and Tiffany & Co..
According to Nina Gardner, Lululemon’s community relations manager, the company achieved all this almost entirely via word-of-mouth, and with ads in only two publications:
We don’t do ads. All of our marketing is done word-of-mouth and grassroots Gardner said. The only place you’ll see ads is in ‘Yoga Journal’ and ‘Runner’s World,’ two national publications.
Let’s take a look at how a company that started off selling yoga pants managed to grow so big from leveraging on word-of-mouth:
1. Lululemon’s customers are eager to show off their inspirational-poster themed shopping bags, just as they might on Pinterest.
Lululemon is all about living an active life, evidenced by their goal to “sweat every day”, and other activities like breathing deeply, drinking plenty of water and going outdoors.
These values promote a very positive and healthy image, something that customers can relate to and aspire towards. And customers who shop at Lululemon are given tote bags that have the company’s manifesto emblazoned all over them:
Lululemon tote bags image by John Lucas, Postmedia News (Click Image To Enlarge)
The feel-good quotes on the bags serve as a form of “social snack“: something we look at to make ourselves feel better throughout the day.
By associating the brand with these values, customers would feel as if they’re “connecting with her best self” as they buy their yoga pants.
Word-of-mouth action tip: Make something about your product worth showing off to others.
2. Lululemon staff feel more like your yoga or gym buddies – they’ll happily talk to you more about yoga and goal-setting than their products.
Lululemon store staffers wear yoga pants so they feel more like yoga or gym buddies (Click Image To Enlarge)
Lululemon’s store employees “are encouraged to discuss exercise goals with customers and take into account their feedback written on chalkboards in the fitting rooms.” This ensures the staff are better equipped with more information to give personalized recommendations to every customer.
They are also instructed to dress like they were going for a workout, so customers would see them more as people you see in a gym or yoga class, rather than a store employee.
Plus, most people who work at Lululemon are athletic and fit individuals, so they have a lot in common with their customers. This relatibility and similarity makes them a lot more likeable, and customers are more comfortable trusting them.
And this building of relationships is exactly what Nina Gardner is trying to achieve:
"Making sure we’re really building those relationships (with customers) — that’s what really sets us apart from being just another retail store that’s opening up to sell clothes. Absolutely we sell clothes, but we are building relationships. We are supporting communities.”
Word-of-mouth action tip: Don’t rush into selling your products – connect with your customers like a friend, so they’ll like you more, and open up to you.
3. Retail stores transform into fitness and conversation hubs on weekends for free lessons, to give back and get people involved with the brand.
One of Lululemon's in-store yoga classes (Click Image To Enlarge)
For one of their stores in Burlingame, California hosts free yoga classes on Saturday mornings and Sundays, as well as a weekday run club. This practice originated from Lululemon founder Chip Wilson, who used his office space as a yoga studio at night to help pay for rent back in the day.
This, according to former CEO Christine Day, positions Lululemon stores as a “fitness and conversation hub”. It also increases customer engagement, encourages regular visits to the store, and keeps the brand constantlytop-of-mind.
What having similar-minded individuals for store employees and free fitness classes in-store does is – it evolves customers’ perception of the brand from being an apparel company to an entity that embodies your ideals, and a community to find like-minded people.
Christian Buss, a Wall Street analyst described Lululemon’s brand identity to a fitness partner:
"They’re selling a brand identity…the model that Lululemon is trying to build is, you’re pretty cool, we’ll be your partner in being your best possible self. And that kind of turns retail on its head."
Word-of-mouth action tip: Leverage your existing assets to contribute to your community.
4. Lululemon engages fitness trainers and athletes as brand Ambassadors to inspire and engage with their customers, so they can feel motivated to keep fit.
Nicole Katz from Yoga 216 is one of the many brand ambassadors of Lululemon (Click Image To Enlarge)
So if Lululemon organizes free yoga and fitness classes regularly all throughout the world, who exactly leads all those classes?
They are Lululemon’s brand ambassadors; yoga teachers and fitness trainers that have chosen embody the brand’s values and lifestyle.
These 1,500+ ambassadors host classes in Lululemon stores within their communities, and according to a yoga teacherfrom Australian fitness group OzSquad, get support from the brand to pursue any events and initiatives they desire.
Of course, they’re also outfitted with the Lululemon products, so they get to wear free gear while promoting their own yoga schools and the Lululemon brand.
Apart from local yogis and fitness trainers, world-class Olympic athletes are also part of the ambassador program, such as Olympic cross-country skier Sara Renner and Jaime Komer.
Word-of-mouth action tip: Celebrate and promote individuals who embody your brand values, so customers will think of you when they look at them.
Lululemon has always been a brand that connects their products with values that inspire their customers. People buy Lululemon pants because they agree with the values that Lululemon embodies and expresses.
And that can be a powerful thing, as branding expert and author Karen Postexplains,
"They’re selling emotion and happiness and joy and feeling good about yourself, … and when companies keep their eye on that in a more focused way, and less on the features of the product, their chances of being a successful brand just go through the roof."
Questions to ponder:
What are some values that your target customers live by?
Does your company embody and communicate those same values in your marketing?
How can you create a positive and engaging community, where your customers can interact with your brand?
COMMENTARY: Based in Vancouver BC, lululemon is known for their athletic apparel, including clothing for yoga, running and any other “sweaty pursuits.” Customers can not only buy clothing and merchandise but they can also sign up for in-store events ranging from workshops, runs and yoga classes, offered on a weekly basis and tailored to the local surroundings. To personalize the in-store experience, lululemon educators and community ambassadors can be found in every store to talk to customers about healthy living, yoga, exercise etc. The ambassadors program is composed of individuals who adhere to the same lifestyle and cultural ideals oflululemon, and can share their expertise with the local community.
Lululemon Athletica retail stores have taken the store and shopping experience to a new level. Julia Brunzell, Manager of Store Design at lululemon atheletica discusses the unique in-store experience that the brand provides.
“We are constantly listening to feedback about how guests experience our stores and how they function for our educators. Every store designer works in the stores to experience firsthand how the space is used, what works best for flow, product visibility and efficiency. In addition, we want every store to feel like a part of its community from the first day it opens; we invite our guests to hang out, chat with our educators and learn about local yoga/fitness studios. Every week, our stores push aside their product fixtures and open the store up to the community for a complimentary yoga class.
Our stores are designed to be conversation starters, while also being fundamentally warm, inviting, eclectic and accessible to everyone. Over the years our fixtures have become more streamlined, modern and modular which allows for flexibility and creativity with visual displays. We are known for our unique, creative and locally relevant storefront designs which range from making a big design statement to a fun reflection of the community we are joining. For example, our Burlington, VT location is a strong ski community so we used two gondolas as benches outside to create an eye-catching and locally relevant storefront. At our Houston Galleria mall location, we designed our storefront using glass windows that look like those from a space shuttle, a nod to the nearby Houston Space Centre.”
There have also been many changes within the lululemon brand. Recently, the brand has launched a new fast fashion clothing line, &Go. With apparel ranging from dresses to pants and tank tops, the line is set to be offered online and storewide. With this change comes another in the men’s clothing division. Lululemon is set to open a standalone men’s store by 2016. The brand offers a range of men’s clothing on its website, including jackets, hoodies, pants, socks and underwear. Finally, with lululemon’s latest expansion into the European market, it will be interesting to see how these developments continue to affect the stores and brands initiatives worldwide.
When Julie Brunzell was asked how these changes and expansions affect the store design concepts and whether consumers will begin to see larger stores, pop up shops etc. to showcase the new clothing lines, she said.
“As a company focused on innovation, we are always evaluating how we design our stores and with that comes continuous examination of layout principles, space planning, size and location. We aim to create community and shopping experiences that speak to our guests and settings which vary from city to city. Entrepreneurship is one of our core business values and as a business that is grounded in community, we enable and support store managers to have a hand in creating spaces that resonate with their guests and their community.”
Lululemon Store Of The Future
Lululemon just opened a new flagship store in New York City's Flatiron District. At 11,500 square feet, it's the brand's largest flagship location. Its Union Square location closed its doors.
The Flatiron District is home to many other stores that specialize in athleisure — Sweaty Betty and Athleta, to name a few. But that makes sense: The area has many of the most popular boutique fitness studios — Flywheel Sports, Exhale, SLT, Pure Barre, and two SoulCycle studios that are mere blocks apart.
And Lululemon is capitalizing on that. One of the new store's features, The Concierge, will dedicate floor space to helping shoppers beyond the sales floor.
The Concierge at Lululemon's Flatiron District store in Manhattan (Click Image To Enlarge)
The Concierge will recommend nearby classes and locations, so that the exercise-obsessed shoppers can don their new pants in class. To top that off, shoppers can book classes while they're shopping.
The Concierge will be a hangout spot — there will be a "community board" to help shoppers discover new places to run, new classes, and even new places to eat.
The Community Center located inside Lululemon's flagship store in the Flatiron District of Manhattan (Click Image To Enlarge)
Lululemon will make shopping a luxurious experience, with a coat check, water, a coffee bar, snacks, and a phone-charging station. You can also have your purchases delivered to your home, office, or hotel, so no need for lugging big Lululemon bags around during the day.
The company is focusing on expanding its already-strong community with a new space called Hub Seventeen. Hub Seventeen will be above the store's retail floor.
Carla Anderson, Lululemon's general manager of US retail, said in emailed comments.
"Our stores are inspired by community, from the design aesthetic and in-store guest experiences and classes to our ambassador and studio partnerships."
Chairs hang from the ceiling inside the Community Events Center of Lululemon's flagship store in the Flatiron District of Manhattan (Click Image To Enlarge)
The 5,000-square-foot space will be used for fitness classes, monthly dinners, concerts, art shows, and more.
Lululemon's stores already have yoga classes, but Hub 17 will take it up a notch.
Anderson said.
"While all of our stores offer in-store yoga and fitness class and events, Hub Seventeen is the first time we created a dedicated community space separate from the retail experience."
The Community Events Center inside Lululemon's flagship Flatiron District store includes an area for yoga exercise demonstrations (Click Image To Enlarge)
Don't worry, Lululemon acolytes — there's a vast retail floor.
The retail floor located inside Lululemon's flagship Flatiron District store (Click Image To Enlarge)
There's a great chance that many other forthcoming Lululemon stores will follow suit.
Anderson said.
"Our flagship stores in particular are designed to elevate the community in new and unique ways, often serving as a testing ground for new guest experiences and retail innovations."
Courtesy of an article written by Samuel Hum appearing in Referral Candy and an article dated April 14, 2015 appearing in Mind and an article dated November 18, 2015 appearing in Business Insider
At this point, few would dispute the importance of visual content to brands. We also know that it’s not a matter of simply having images; your visuals need to contribute to perceptions of your brand in a cohesive, productive way. If a distinct brand is regularly delivering relevant messages that I trust, I’m more likely to remember that brand favorably when I’m about to make a purchase.
It’s easy to see how visuals contribute to distinctiveness; logos, colors, and fonts all build to form a visually recognizable brand. And certainly there are images that are relevant to me, like those that depict products I would buy, social causes I believe in, or relatable experiences.
But how can a brand-created image build “trust,” or be trustworthy in way that constructs memories? Another way of asking that: how can brand-created visuals feel authentic?
An answer to attaining authenticity lies in user-generated content (UGC)—not just sourcing and distributing content from fans, but emulating the way consumers create visual content. This is already happening to some extent.
I’ll start by briefly explaining why authenticity is important. Then I’ll explore how the volume and perceived authenticity of UGC is persuading brands to either source UGC for its visuals or create owned-media that has an authentic-feeling, UGC flavor. That is, that there’s a type of “gravitational pull” toward users’ visuals and their modes of visual production.
THE ATTRACTION OF AUTHENTICITY
Pretty much every marketer will tell you authenticity is important. In many ways, brand management is relationship management—and you can’t build or strengthen relationships if people think you’re fake. Inauthentic-seeming visuals in particular have come under fire as of late; hating on the extent to which photo editor tools are used to airbrush a model’s flaws, for instance, has gone mainstream. We’ve even seen marketing campaigns that tap into this pushback against “fake.”
One way to be authentic as a brand is to behave the same way people behave. This is most clearly seen in the realm of social marketing; companies participate in hashtag conversations, speak the way their customers speak, and frequent the same channels as their audiences.
Click Image To Enlarge
Not only are brands competing for the attention of customers—customers are dictating what brands do. This is true even if brands also have the power to steer conversations and trends (through creating hashtags, for example).
This tension applies to image curation and creation, too—and it’s critical to the gravitational pull of user generated content. Customers are at the center of a brand’s universe, and they exert control over their messaging, just as brands can influence users’ conversations.
After all, the moon pulls the earth toward it, too.
THE GRAVITATIONAL STRENGTH OF USER-GENERATED CONTENT
Understanding the “pull” of UGC means understanding how much of it there is, as well as how it contributes to perceived authenticity.
If there’s a center of mass for visual UGC, it’s shifting closer and closer to Instagram and Snapchat. These visual platforms surged quickly in prominence about three years ago, according to Mary Meeker’s 2014 Internet Trends report.
Instagram has had faster growth rates than Facebook, Twitter, LinkedIn, and Pinterest between 2012 and 2014 and has also become the most important and most used social network for US teens, according to the Pew Research Center. Snapchat has 100 million daily average users, according to Mary Meeker, and is also among the youngest: 45% of Snapchat’s adult users are between 18 and 24, more than any other, reports Comscore.
But UGC is all over the web, and there’s evidence that it’s more viewed and more trustworthy than brand-produced media.
This could be in large part because of the amount of UGC content out there. There’s about 135 times more UGC videos about brands than official brand-owned videos on YouTube, Octoly reports.
But despite the seeming glut of UGC, it’s also 50% more trusted than other media sources and 35% more memorable, according to Crowdtap. So not only does it get views—it’s perceived as authentic.
THE GRAVITATIONAL PULL IN ACTION
The amount of UGC content, the proportion of time people spend viewing it, and the trust it builds with viewers all drive the “gravitational pull” of UGC.
There are still some mixed feelings on actually using UGC, though. Three-quarters of marketers feel there’s some value in externally sourced content—but just a little over one-third said they solicit and showcase UGC, our last State of the Marketing Workflows and Measurement survey found.
But even if brands aren’t taking to showcasing UGC en masse, that doesn’t mean this surge in visual content from consumers hasn’t had an effect.
Our Marketplace partner Getty Images has had its fingers on the pulse of two visual trends that speak to how consumers have exerted control over the visual content brands produce.
THE GLITCH AESTHETIC
Getty describes the glitch aesthetic as being defined by errors—over-saturated colors, over-exposure, lens flares, pixelation, and the like—that were either intentionally made or added in image post-production. These are images that would have been rejected by art directors a decade ago—but today, brands have felt free to run wild with these imperfect images. Coca-cola (which also recently launched a popular UGC-oriented campaign) provides this example:
Getty even characterizes this aesthetic as a way to bring “authenticity” to your brand, asserting that errors help you stand out in an environment filled with picture-perfect content. “In our increasingly curated world, there’s a pull toward an aesthetic that feels messy and unexpected,” it says.
POINT OF VIEW
This visual trend is exactly what it sounds like: the first-person experience. Photos and videos taken from the perspective of a specific person, shaky-cam, overhead shots. The result is a sense identification with the photographer. Take for example the bulk of this award-winning ad from Levi’s depicting the waste of plastic through the lens of hand-held cameras:
Both of these trends are very individual centric. ”Here’s how I would take the photo. Here’s what my life is like.” By taking after these trends, brands aim for realism and immersion.
The deep dark convergence of both these trends: selfies. Ninety-three million are taken a day, Google said at its 2014 I/O Conference. There are almost 300 million posts hashtagged #selfie on Instagram—which, of course, gives users the tools to intentionally overexpose their photos.
The popularity of selfies is not lost on brands. GoPro’s YouTube channel is filled with user-generated content of fans showing how extreme sports looks like through their eyes. Pizza Hut mocks the trend while relying on selfie shots in a recent ad.
And we probably don’t need to mention Samsung’s selfie ad from the 2014 Oscars Awards, other than to point out that it’s inspired other brands.
Above all else, when trying to achieve authenticity, know how your audience behaves and communicates. Brands aren’t human—but they can still create resonant, memorable messages that build trust by understanding their customers.
COMMENTARY: Progressive insurance is a great example of authentic branded content. Progressive Insurance's funny and zany character "Flo" has donned many hats since she appeared on the air nearly eight years ago player a checkout clerk.
Progressive has been able to keep the "flo" character fresh by moving her out of the "superstore" into the "field" where she goes jogging while being followed by a caravan of vehicles, a campfire where she tells her partner "we make a great pair," behind the wheel of a motorboat while observing other boats with the word "flo" in their names, and driving a motorcycle with a motorcycle couple. Such approaches have allowed the "Flo" character to remain relevant with the audience. The message being delivered is that Progressive can insure your boat, motorcycle and when you are taking a stroll.
Progressive CMO Jeff Charney said its her relatable-nature that gives her staying power. Mr. Charney said,
"She was authentic and real. She was different than anything else in the industry, an industry that is literally an arms race."
Flo's ads are designed to build a deeper connection to the character, tap into a relatable moment and showcase the campaign's range, which often includes improvisation and supporting characters.
Courtesy of an article dated July 16, 2015 appearing in Percolate Blog
FUBU co-founders J. Alexander Martin, Daymond John, Carl Brown anKeith Perrind in 1998 (Click Image To Enlarge)
I’m a sucker for Shark Tank – in which wide-eyed entrepreneurs pitch their “once-in-a-lifetime” ideas to a group of rich men and women running the gamut from owners of an NBA franchise to some schmuck they call “Mr. Wonderful,” who I like to imagine made his money selling doll furniture. One guy in particular, Daymond John, always appealed to me. While most of his fellow gurus earned their massive fortunes in the tech space, John had built the fashion empire known as FUBU. I thought.
”Holy shit. If he’s sitting next to Mark Cuban who made enough money to own the Dallas Mavericks, Daymond must be swimming in it!”
The "Shark Tank" TV series cast for 2015 from L-to-R: Mark Cuban, Barbara Corcoran, Daymond John (FUBU founder), Kevin O'Leary (Mr. Wonderful), Lori Greiner and Robert Herjavec (Click Image To Enlarge)
But as we all know, FUBU isn’t exactly flying off the shelves these days. What exactly happened to the company before, during, and after its massive success?
Daymond John was raised in the Hollis neighborhood of Queens. He didn’t come from a family with money. His parents divorced when he was 10 years old, and he would never see his father again after the separation. He says.
“We went from middle class to poor. I became the man of the house and started working at that age.”
“Initially, it was through printed T-shirts, but not my own brand. I went and printed up some shirts when the Rodney King riots were happening in Los Angeles, with lines like ‘What happened to poor Rodney King?’ Then Mike Tyson got incarcerated, and we did the whole ‘Free Mike Tyson’ shirts. We would sell them at events and on street corners. It showed me something about the reason people buy clothes – that when there’s an emotional slogan or an emotional connection, products sell quicker. That’s when I started thinking about this concept of ‘For Us, By Us.’”
The original founders of FUBU in 1998 from left to right -- Keith Perrin, Carl Brown, Daymond John, J. Alexander Martin (Click Image To Enlarge)
By the end of the day, he had sold out of the hats and turned a $800 USD profit. He knew he was on to something – although he didn’t exactly have the capital to immediately capitalize on the momentum he had seemingly conjured out of thin air. He told CNN.
“The next step could be how do I finance all of this? Do I sell one or two hats and then re-up? Do I take out a loan from a bank or do I get an angel investor? Do I just chug along at $50,000 a year, $100,000 a year? When do I go balls out? Quit the job. Mortgage the house. Sell the car. Do I do this at all?”
While those were all smart questions to ask, $800 USD dollars worth of sales didn’t necessarily mean that he should quit everything. But that would soon change. According to CNBC,
“During his off hours, however, John would hit music video sets and try to coax rappers to wear FUBU apparel in the shoot, a move that would ultimately pay off as millions of fans saw their favorite stars wearing FUBU clothing.”
“First it started with Brand Nubian in one of their videos, then Ol’ Dirty Bastard wore it in a Mariah Carey video, then Busta Rhymes wore it on one of his videos, and LL Cool J decided to wear FUBU on the “Hey Lover” video with Boyz II Men. Our product was front and center on the biggest and most influential personalities for our core consumers.”
Daymond John (center) with model Tyson Beckford (left) and rapper LL Cool J at a FUBU event in 2000 (Click Image To Enlarge)
As legend has it, John also used a bit of guerilla marketing in his attempt at reaching the top. John remembers.
“One of the most well-known hits we had with LL was during a Gap commercial. He was wearing a pair of Gap jeans and a Gap shirt, but he was somehow able to sport one of our hats during the commercial. Then during his thirty-second freestyle rap, he looks directly into the camera and says, ‘For Us, By Us, on the low.’ No one at Gap nor any of their ad execs thought anything of it. It wasn’t until a month later that someone at the Gap found out, pulled the commercial, and fired a whole bunch of people after they had spent about $30 million running this campaign.”
After an appearance at a trade show in Las Vegas, he and his partners – J. Alexander Martin, Carl Brown and Keith Perrin – had managed to sell $400,000 USD worth of clothes that didn’t exist yet. Ultimately, his mother took out a second mortgage on her home after John was turned down by 27 banks for a business loan.
Soon after, his partners moved in, and they turned the home into a makeshift factory. John remembers.
“It was a typical Queens house, the kind you see on All in the Family. It had three levels: A basement, the first level with a dining room, living room and the kitchen, and then three bedrooms upstairs. After we took out the mortgage, we took all of the furniture out of the house, sold what we could, and the rest we burned in the backyard. We put all the raw materials down in the basement, and on the first floor, we converted the living room and put eight sewing machines there and we hired some seamstresses. In the dining room, we put a cutting table where we cut all the fabrics. The kitchen, well, the kitchen was still the kitchen.”
By 1998, FUBU’s reached its peak with sales over $350 million USD. John and his partners had used hip-hop culture and stars like LL Cool J – a fellow Queens native – to put FUBU’s clothing in seemingly ever rap video at the time. John and crew thought to themselves, “we should put out a record too…”
FUBU released the compilation album The Good Life on September 25, 2001 which featured the likes of LL Cool J, Nate Dogg, and Keith Murray. It lost the company an estimated $5 million USD. John told Fast Company.
“We didn’t know our numbers, we didn’t look at our numbers, we were spending money like drunken sailors, we were getting caught up. What was the reason we were doing it? Did we get exposure? Yes, but from the business model, we died.”
“Fatty Girl” was the lead single from FUBU’s The Good Life album, prominently featuring the apparel in the music video directed by Hype Williams
In a book he co-authored, The Brand Within, John explained that one of the major factors that led to the company’s demise is that they had too much product. He writes.
“Once you hit mark-down bins, it’s tough to climb out, because you’ve lost the sense that your clothes are fresh and vibrant.”
By 2003, FUBU left the U.S. market completely – except for its footwear division – and built business in Europe and Asia. Additionally, they acquired up and coming brands Heatherette, Drunkn Munky, Kappa USA, Coogi, and Crown Holder. Worldwide sales for those brands reached $200 million USD in 2009. Despite being absent from the marketplace, there was no catastrophic collapse or new people coming on board.
NSYNC wearing FUBU when the brand went mainstream (Click Image To Enlarge)
In 2009, John announced that FUBU would be making a comeback after a six-year hiatus with an aesthetic similar to “Carhartt meets Abercrombie.”In speaking with WWDJohn said.
“I wasn't too worried about losing FUBU’s brand identity since the kids nowadays have a three-year memory span, so most don’t have a sense of the brand’s roots.”
COMMENTARY: Daymond John blamed excessive inventories as the chief cause for FUBU's failure. Excessive inventories is not a cause, but a symptom that something bigger is going on. It is my belief that John did not have a good understanding of fashion retail marketing and the need to identify changing trends in fashion. In short, John's ownership of FUBU's marketing strategy and failure to listen to marketplace signals is really what did in FUBU.
John started FUBU as a fashion brand that appealed to and targeted young urban black males. Young urban black men were the biggest fans of rap and hip-hop music when it began to take off in the late 1990's. John's love of rap and hip-hop music and associaiton with several well known rap and hip-hop music artists like LL Cool J, Salt-N-Pepper, Run-DMC, and others, provided the perfect vehicle to reach his target market.
John did not have a marketing budget and relied mostly on guerilla marketing to get the FUBU brand recognized in the marketplace. Providing many of these black rap and hip-hop music artists with FUBU apparel that they wore on stage and on music videos was a great strategy to gain brand recognition. The FUBU brand quickly become part of the rap music culture. Young urban black males wanted to become part of this music culture and the FUBU brand was the perfect way for them to express their association with that culture. As the FUBU brand grew in popularity among rap and hip-hop music fans, the brand took off, eventually peaking with revenues of $350 million in 1998.
Many nascent rap groups undoubtedly embraced FUBU and Cross Colours due to accessibility and their finger-on-the-pulse relevance. Later on many hip-hop insiders launched their own lines, with Wu Tang and Wu Wear, Russell and Kimora Lee Simmons with Phat Farm and Baby Phat, Nelly with Apple Bottoms, and more. This crop of urban wear newcomers quickly became the "next big thing" in urban and hip-hop fashion, and the results were obvious: FUBU, Tommy Hilfiger and Abercrombie & Fitch, who had grown and prospered due to the early popularity of rap and hip-hop music, began to lose favor with young urban black males. The handwriting was on the wall, and John either missed these market signals or completely ignored them.
Clearly, J0hn failed to realize that fashion trends can change quickly and dramatically. Like many startups that experience dramatic and early success, John learned too late, that success is a lousy teacher. Those that assume that success will continue by doing the same things they have been doing often have a rude awakening.
John's announcement in 2006 that FUBU would make a comeback, obviously has not been realized. Market forces in the fashion industry quickly change, and young urban blacks no longer emulate their counterparts of the late 1990's. Though urban brands certainly enjoyed their moment, their popularity seems to be waning. Instead of Jay-Z wearing Rocawear, you’re most likely to see him in Givenchy. Though Beyonce is the face of House of Deréon (and is wearing it in their new ad!), we know the R&B and pop songstress truly has a soft spot for Balmain, Lanvin and Alexander McQueen. Nicki Minaj loves her Versace as much as Kim loves her Kanye West.
Courtesy of an article dated June 30, 2015 appearing in TheHundreds.com, an article dated November 17, 2014 appearing in Business Insider, an article dated October 9, 2012 appearing in Fashion Bomb Daily, and an article dated March 27, 2009 appearing in Marketings411
So, the folks over at Printsome, a U.K. T-shirt printing service, were getting hammered one evening (by their own admission, "beers weren't lacking") and somehow the discussion turned to how Facebook would taste if it were a beer.
I think most people would say the flavor would change every few months at the whim of its advertising partners, but Printsome took things one step further and made a whole beer identity for Facebook. They did the same for Nike, Apple, the Arsenal football club and themselves, deciding flavor, label design, alcohol content and desired audience for each.
The label designs are pretty standard for projects like this, but the writeups are fun. They decided Nike beer would be low-cal and full of taurine, which sounds exactly like something Nike would do, and that Apple's iBeer would be an organic cider/beer monstrosity of some kind. I would have made it an iPA, but then again, I'm a pun-loving colonial savage.
Facebook's Facebrew beer would make even Zuck proud (Click Image To Enlarge)
Apple's iBrew beer would make Steve Jobs turn in his grave, but Apple evangelists would still buy it jsut because Apple brewed it (Click Image To Enlarge)
Nike's Just Drink It beer would have Nike fans saying "I'll have another" (Click Image To Enlarge)
Arsenal's London Ale is the perfect compliment to any British football game (Click Image To Enlarge)
Printsome's Drink Some beer should be printed on T-Shirts Now because I would buy one (Click Image To Enlarge)
COMMENTARY: I think Printsome mightr be on to something. I like the idea of printing branded T-shirts with hillarious products. I have a feeling that Zuck would love to have his own brew but would he include his brew over Red Bull now being offered to Facebook staffer's during Hack-A-Thon's? Hell yes, why not.
Courtesy of an article dated July 10, 2015 appearing in AdWeek
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