Joey Dembs
Apr 23, 2015

The fate of big brands

A shifting consumer mindset points to a rising need for big brands to ‘grow small’ or risk losing market share and loyalty, writes Flamingo's Joey Dembs

Joey Dembs
Joey Dembs

A changing set of consumer values

Big brands in the United States are at the mercy of a generation with a new value system. Uniqueness, experience and depth have replaced uniformity, trust in scale and reliability in the mindset of today’s consumer.

Walking down Smith Street on a Sunday afternoon, in a rising, rapidly gentrifying area of Brooklyn’s Boreum Hill neighborhood, one sees this playing out. With high storefront turnover, restaurants in particular are faced with this ‘go big’ or ‘go small’ tension. Some new spots go for a corporatized, ‘we are going to try look and act small’ vibe. Others go for a truly one-off experience.

The polished eateries offer well-lit, comfortable dining experiences. Yet, these places are empty. The only people in them are bored wait-staff silently checking their smartphones. Though small, they feel static and sanitized. 

But the places with dark windows, well curated peeling paint, and less visible branding have people waiting outside the door. Reveling in their nonchalance, they seem to be attracting the larger audience. 

Not long ago, the former felt like the right approach for brands in the United States. Bring polish and reliability to the table, start small and grow into a streamlined, efficient juggernaut, replicating success across the nation.

However, we see consumers today demanding ‘crafted’ products and experiences. Products and experiences that allow people to be expressive, not the same. And a growing distrust with homogenous corporations.

This article is part of the Cultural Radar series

In this environment, many big brands find themselves fighting to stay relevant with today’s younger generation. 

A big tension

As brand consultants, our job at Flamingo is often to help big brands maintain their relevancy and at the core, get bigger by selling more products. 

In today’s capitalist economy, you’re growing, innovating, merging or folding. Wall Street rewards largeness. Companies sit around pondering how they’re going to grow 0.01 per cent in Q4 and make billions because of it. 

And from a consumer perspective, we undeniably like things at scale. We demand that everything be faster, cheaper and more accessible. Big brands and large corporations grease the wheels and spritz the cogs of the global economy, making middle-class nice and peaceful. Big brands are a necessity. They’re inescapable and scary (like your aunt), yet familiar and comfortable (like your mum).

This clearly presents a tension. Consumers want unique, crafted products and experiences that are well priced and accessible. This puts today’s biggest brands in a bind. Find ways to keep growing, but don’t alienate the next generation of consumers.

To do this, brands must find a way to 'grow small'. But how?

Growing small

Big brands don’t have to grow small. And many won’t. There’s plateau-like growth, there’s massive growth, and there’s even negative growth. However, big brands risk losing this generation and even the next generation to smaller brands that are stealing significant market share across many categories. There’s no silver bullet for how to 'grow small’. In the United States, we’re seeing four ways big brands are attempting to do it, some with greater success than others.

1. Reclaim the big brand conversation

Budweiser’s ‘Brewed the Hard Way’ campaign, Gap’s ‘Dress Normal’, and Miller High Life’s ‘I Am Rich’ adverts all attempt to re-direct the conversation away from the perceived elitist and individualistic mindset that smaller brands offer. This suggests people are tired of representing themselves outwardly with brands and instead want to go back to being ‘comfortable’ and ‘normal’. It can be argued this approach overestimates people’s rebuttal of individualism. However, it is resonating in progressive enclaves of the US where hyper-individualism is no longer seen as ‘cool’. 

2. Innovate small

For a long time, innovation success meant developing a new product flavor or line extension underneath the big-brand umbrella. However, brands are increasingly looking for growth by developing ‘new’ brands that distance themselves from the parent brand and carry a smaller footprint. PepsiCo earlier this year launched Caleb’s Kola (without the PepsiCo logo), a 'micro-cola' aimed at urban millennials. Even a brand like Urban Outfitters, a bastion of selling individualism to youth, recently launched a Brooklyn-based concept store, Space Ninety 8, aiming to test concepts and design on a smaller scale. 

3. Localize brand experience

Big brands are often tasked with selling a consistent, homogenous image across the country. Yet more and more, brands are adapting to local markets, allowing consumers to feel more engaged with local communities. Starbucks is the consummate example as it tailors each store to fit the fabric and dynamics of the neighborhood. Brown-Forman, maker of Woodford Reserve, is investing $30 million in a downtown Louisville ‘experience’ showing that big, international brands can impact local communities. P&G is taking a localized communicative route by appealing to hearts and minds of New Yorkers with its ‘New York Tough’ brand-halo campaign

4. Align With A Cause

Big brands have the opportunity to leverage their scale and size to play a role in social conversations, appealing to niche sets of consumers. Brands like Patagonia (through its production methods all the way to its retail experience) and Ben & Jerry’s (with its long history of aligning with social movements) have grown to be huge brands while maintaining a small-scale feel. Others, such as Dove (campaigning for ‘Real Beauty’) and Dick’s Sporting Goods (championing that ‘Sports Matter’ and encouraging high school sports participation), have adopted social causes as a positioning differentiator. 

It’s clear that consumers are demanding more of brands than ever before. They now want them to be unique and accessible, to be experiential and reliable, to stand for something but not everything. It’s no longer enough for brands to be ‘big’. 

Joey Dembs is director of Flamingo New York

 

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