Caroline Rehfuss

8 October 2020

6 min read


The risky state of mass brands

By Carlos Castellanos

4 min read

Emerging brands are winning the loyalty of Future Consumers and disrupting traditional, product-first mass brands along the way, even though these mass brands have long dominated their respective categories. Emerging brands -- who were all initially ignored because they were thought to be too niche -- have found success by delivering a new consumer-centric business model that focuses intensely on the consumer and capitalizes on their unmet needs. Mass brands can avoid total obsolescence by taking a page out of emerging brands’ consumer-centric playbook in order to transform their business models and capitalize on the opportunity with changing consumer demographics and behaviors.

In order to become consumer-centric, core elements of the business model must be realigned to put the consumer first. This applies to 3 levels of the business -- product, service, and brand.

Consumer-centric product

Instead of serving the mass market with one-size-fits-all products, brands must provide solutions for niche markets and personalize interactions through software in order to deliver one-size-fits-one solutions.

In a world where consumers are increasingly looking to filter the seemingly infinite options available to them, brands can win by offering solutions that are tailored to their needs, wants, tastes, values, and identities, effectively allowing consumers to curate their own products and experiences.

One-size-fits-one solutions can only be designed and developed by understanding consumers’ unique needs, wants and pain points.

OXO Good Grips is one example of a company that has had success taking this approach. The founder of the company saw his wife struggling to hold a peeler due to her arthritis and made it his mission to design a peeler that was easier to hold and control. As a result, OXO handles were developed to address a specific pain point for people that have difficulty holding cooking tools in the kitchen. OXO was not trying to solve for the mass, although today, its products are readily found across kitchens and used by people with and without arthritis.

Brands like Netflix, Spotify, and Stitch Fix also deliver one-size-fits-one solutions by relying on algorithms to identify patterns and behavior of their consumers to then personalize recommendations. Even though millions of people interact with these companies on a monthly basis, no two consumers are alike and the companies are able to provide an individualized offering to each and every one. Software tools like the ones Canva, Wix, and Nike ID provide also allow consumers to create their own personalized solutions by relying on self-expression as a form of production.

Consumer-centric service

Instead of relying on intermediaries like department stores or cable companies for distribution, consumer-centric brands care about creating interactions that are direct to the consumer, across both digital and physical touchpoints. This allows them to own all of the interactions with their consumers, not just the point of sale, and deliver an end-to-end experience that future consumers want and expect.

The consumer journey largely happens in three stages: pre-purchase, purchase, and post-purchase. A consumer-centric business model provides high-quality service to consumers at every stage of the consumer journey, while a product-centric business model is focused on maximizing revenues during the purchase stage.

Take Peloton for example. Before buying a bike or treadmill, consumers can discover Peloton’s products online or through a 30-day free trial via the Peloton Digital App. Consumers can also discover products in person at showrooms where they can learn more from sales representatives and try the products for themselves, as well as at Peloton Studios where consumers can partake in live fitness classes. At the time of purchase, consumers can buy directly online or in-store, with the ability to easily finance their purchase and pay over time with no money down and no interest. Post-purchase, Peloton continues to interact with its consumers through white-glove delivery, continuous service updates, and both virtual and in person customer support. The company also encourages engagement and loyalty by tracking one’s progress through metrics and offering challenges and achievement recognition, like the Century Club shirt a user earns upon completing their 100th workout. At the end of the day, Peloton sells much more than just a hardware and software product. The company makes it easy and enjoyable for consumers to discover, buy, and remain loyal to the company’s products by owning and delivering a high quality consumer journey from end-to-end.

Consumer-centric brand

Instead of being dependent on a logo or advertising campaign, mass brands can earn loyalty by aligning their values with those of Future Consumers and managing their relationships through data to better understand and serve consumers. How a brand communicates its purpose, values, and reason for existing needs to be sincere and organic, not paid or conceived. And it’s not just enough to care about this issue, brands must also act accordingly -- otherwise it’s just lip service or worse, woke-washing.

Today there is a growing number of consumers who care deeply about sustainability and are seeking out companies that care about environmental issues as well.

While many companies are committed to reducing their carbon footprint, Patagonia has leaned into environmental activism from day one. Their purpose-driven mission statement is -- Patagonia is in business to save our human planet -- and they back it up. Patagonia sources its product materials from fair trade and organic sources and ensures its supply chain follows fair and sustainable practices. Recently Patagonia has taken a political stand, endorsing candidates who align with its core values and openly criticizing those who don’t. And while many companies would view this as a risky move, it isn’t for Patagonia because the company knows and truly understands who its consumers are and what they care about.

Nike’s divisive Colin Kaepernick ad is another example of a brand managing their relationships with consumers through data to better understand and serve them. As Nike founder Phil Knight said, “It doesn’t matter how many people hate your brand as long as enough people love it.” The company was able to leverage the data of all of its consumers and then align its values with those of its most loyal fan base. In doing so, Nike knew that taking a stand on a controversial topic at the time would appeal to and deepen its relationships with the consumers it cared the most about.

There are two main differences between the product-first mass model and the consumer-centric model. The first is the proximity of the brand to the consumer. No longer can the consumer be an afterthought for brands; they must be at the core of all business decisions being made.

Brands must understand their pain points in order to produce products that meet their needs and wants. They must also service them along the entire consumer journey, interacting with their consumers pre-, during, and post-transaction in an effort to establish, build, and maintain relationships. And they must adopt consumers’ purpose and values as their own.

The second difference is the short vs. longer-term focus. No longer is it about focusing just on increasing short-term revenues for the brand. Instead, brands need to shift their focus to increasing longer-term loyalty with their consumers. If mass brands are able to apply the learnings from emerging brands and shift to a consumer-centric business model, they will avoid obsolescence and cement consumer centricity as their primary competitive advantage over the next decade.