Are brand strategies undermining belief in brands?

by Nigel Hollis

A while back I reviewed the Kantar North America event, Fragmentnation, which focused on the increasing diversity of needs, mindset and values in the U.S. population, and noted that brands must prepare for a more diverse future. On reflection they must also prepare for a more fickle future.

By more fickle I mean that the people buying brands are going to be less likely to value brands in general and more willing to accept alternatives within a specific category. The fact that people are willing to switch between a set of acceptable brands is nothing new, but I believe that many strategies designed to grow a specific brand’s sales are actually undermining the value of brands in general.

Take for instance the various strategies designed to make reduce the angst involved in choosing a new brand.  Consumers have always been risk averse, but the new business models make it easier for people to avoid long-term commitment to brands. More cars are leased than bought, subscriptions are more likely to be monthly than bi-annual for a wide range of products, more brands offer ‘try before you buy’ programs.

Over the years, established packaged goods brands have introduced multiple line extensions designed to appeal to specific functional needs but which present consumers with an over-abundance of choice. Faced with too many choices but forced to make a more deliberative choice, and that choice may favor smaller, well-differentiated brands rather than the big incumbents. Increasingly people are choosing craft, local and niche brands rather than established mass-market brands.

Hard discounters and value brands that offer ‘same quality, better price’ have made gained at the expense of mass-market brands. Aldi and Lidl have disrupted the UK and European grocery market and look set to do the same in the U.S. as well. Consumers are reported to be trading up and trading down, leaving established brands sitting uncomfortably in the middle. Major players like Tesco have tried to fight low prices with low prices but with mixed success.

Then there is the shift from traditional to digital advertising. The number of digital ads has increased dramatically and that is not regarded as a good thing by the people targeted. In survey out of survey the majority of respondents agree they find most of those ads irrelevant, repetitive and late to the purchasing party. The end result is a growing antipathy toward advertising particularly among a younger audience.

Last but not least as I noted in my recent post on brand purpose faced with fragmenting culture and media brands are grasping for any cultural relevance they can and many jump on the purpose bandwagon without any clear idea of its relevance to the specific brand. The lack of authenticity is obvious to everyone.

All of which adds up to a general feeling that brands are all the same and easily substitutable. But maybe you disagree? Please share your thoughts.