Micro-brands: Redefining the way the world shops

Microbrands Cover Image

The past decade has celebrated brands like Walmart, Amazon and Tesco; brands that have been able to scale in size and dominate their categories. In contrast, the last couple of years have seen these behemoths battle not with other big brands but rather with thousands of tiny brands, each with low overheads and efficient customer acquisition tactics.

Through the ages, small companies typically have had profits that match their size, but modern technologies have allowed for a paradigm shift. ‘Micro-brands’ are the latest iteration of small brands that have been enabled by streamlined modes of production and access to a global market. The brands are using a combination of hyper-targeted marketing and small batch inventories to compete against the giants in their industries.

The Long Tail: Why the Future of Business is Selling More for Less authored by Chris Anderson back in 2016 is an illuminating read on this particular subject. His theory delves on the fact that the Internet created a platform for a plethora of retail sites that are cheap and easy to access to shoppers. On the supply side, the Internet also provides the same accessibility to an unlimited number of vendors and their services. This combination assisted a shift for consumer demand from the few ‘mass market’ brands to the millions of smaller niche brands. The chart below illustrates Chris’s theory with the narrow skyscraper of traditional gigantic retailers on the left and the long tail of micro-brands that seemingly extend infinitely into the distance.

Microbrands Head and Long tail
Image Source: The Long Tail: Why the Future of Business is Selling More for Less

Forbes refers to microbrands as “digital-first brands, direct-to-consumer brands, digitally native vertical brands, challenger brands and so on.”  Brands that are typically mobile-first, hyper-social, channel fluid and deliver the perfect buying experience to net-savvy consumers with extremely high expectations.

Companies such as Casper (mattresses), Warby Parker (spectacles), Dollar Shave Club (men’s razors) and Glossier (cosmetics) were once seen as oddities, new-age e-commerce brands that delivered directly to customers houses. Time has proven that these companies were able to shake up mammoth incumbents who had grown used to uninterrupted global domination.

Operating through a direct-to-consumer (DTC) model and shaped by a combination of customer centricity, ease, and convenience, micro-brands are able to by-pass the traditional middle man and reap the benefits of directly engaging with their shoppers on a global scale. Highly engaged digital communities and access to data streams that can, in turn, inform their strategies for product, pricing, design and market expansion. These differences highlight the gap between what consumers want and what traditional retail offers.

A study that looked at factors of success for brands from 2000-2013 and 2013-2018 illustrates a significant change in the mindset of the global consumer. A change from the established norms of brand equity, familiarity and scale; to a market that prefers innovation, speed, authenticity, personalisation and customer experience. These changes line up with key demographic characteristics of Millennials, reflecting a market that will not settle for the ‘same old’.

20th-century consumers once did trust big brand names, and this helped consolidate and boost the growth of national chain retailers, but today’s shopper is increasingly wary about big brands. According to the Edelman Trust Barometer in 2018, only 48% of people say they trust big brands, down from 58 percent just one year before.  This loss in trust is translating into shopping dollars shifting towards smaller brands who are seen as more authentic and trustworthy.

The table below by Nuxeo Research highlights 5 value drivers that consumer-packaged goods have traditionally benefitted from and their respective digital disruptors.

Microbrands Traitional Value Drivers
Traditional CPG value drivers disrupted by digital evolution

A look at some key factors that helped micro-brands be the successes that can be:

  1. Low barrier of entry into the market place with social commerce platforms like Shopify allow them to sell anytime and anywhere

  2. An efficient usage of social media has created the possibility to build authentic relationships through hyper-targeting shoppers and leveraging user-generated content

  3. A key priority on customer experience enables them to build authentic relationships with customers

  4. Designed with tightly managed supply chains, micro-brands carry low/no inventory and often produce small batches on demand

  5. The ability to harness feedback and roll out iterations almost in real-time creates products that can evolve with the market

  6. Being able to spot emerging niches and rapidly spinning off new product lines

A case study that is FashionNova: A brand that put its ‘social listening’ and influencer marketing strategy on steroids, producing fast-fashion through an Instagram first approach. It quickly identifies trends through its millions of followers and manufactures small orders on-demand which are then pushed out through a network of influencers. This results in its stocks selling out almost always. 2018 saw the brand launch 500 new styles every week, illustrating that the brand excelled at two key pillars – speed and scale.

As consumer tastes become more specialised, big businesses are being forced to accept that a certain percentage of the market will always be lost to agile micro-brands. The other alternative is that they too try to play the game of rapid innovation or buy out the smaller brands before they become unassailable – case in point Gillette buying Dollar Shave club for a billion dollars.

The bottom line is consumers are increasingly empowered and demanding, expecting that brands to wrap around their lifestyles and not the other way around. The world has become an accessible market of unlimited choice and the big brands of yesteryear can either change their established ways or watch microbrands of today become the household names of tomorrow.

The World of Virtual Influencers

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Avatar cultures have been around for years but it’s only in recent times that they have been gaining mainstream attention on social media. Virtual Influencers, cyber models, CGI models, AI accounts or even Brandfluentars (yes you read that right), no matter what you might call them, globally the industry has a potential to reach a value of up to $10 billion by 2020.  The number of names that we have for them is a clear indicator of how confused the world is by their existence.

These models might not have a physical form but that is not easy to understand in the world of social media. Each with their own distinctive personalities and identifying with real racial, social or gender groups, the advances of CGI it is very tough to spot them online without a closer examination. While you might scoff at the idea of virtual influencers being popular, take a look at Lil Miquela, one of the first on the scene is an online star today with over 1.5 million followers on Instagram and Brud, the company that created her valued at $125 million.

Their popularity has not gone unnoticed by brands of the world with the fashion and beauty categories being amongst the first to experiment with virtual influencers. Prada, Chanel, Burberry, Diesel, Moschino, Supreme and Balmain to name a few looked to ride the spike in interest in this new age form of influence. Fashion brands have been able to make the most of the PR exposure that was a result of this unusual choice of models. These virtual influencers have done everything from sporting the brands clothing to appearing with real-world celebrities and even appearing as a hologram within live events.

Balmain campaign
Margot, Shudu and Zhi modeling for Balmain

For brands, virtual influencers have been seen as a natural evolution of the digital world after being burned a number of times over the last couple of years with adverse publicity that has engulfed the influencer economy (artificially inflated follower numbers and volatile personalities). While brands have tried to implement processes that minimize such risks (careful vetting of influencers and rigid terms of conduct contracts), some marketers have decided to jump ship and work with influencers that are made of pixels and are much easier to control. No more coaxing humans to pose a certain way or say a certain thing, virtual influencers hold the potential of complete creative freedom.

If you think about it, human influencers have an expiry date, but virtual IP can be extended infinitely. The newest kind of content system for the influence economy, as after all does it matter if an influencer is fake if they have the same ‘influence’ as someone who is real?

One of the concerns that might leap to mind is the value of authenticity, now that consumers know that the ‘person’ they are being exposed to isn’t real but a digital creation.

Mobbie Nazir, Chief Strategy Officer at We Are Social points out “Many consumers are fed up with overly-contrived social media posts that purport to showcase ‘real’ life, and may prefer unashamed artificiality. This gives brands the opportunity to be openly fake – indeed, owning it and coming across all the more real for it”.

Akin to the world of videogames brands using virtual influencers can benefit from coming across as ‘meta’, sharing that ‘knowing’ bond with its customers of this virtual reality, allowing themselves to suspend their disbelief and play along with the antics of these characters.

From a consumer standpoint, it also helps that we are becoming more and more used to and dependent on technology in the context of everyday life. From digital assistants like Siri and Alexa to chatbots online we are increasingly accustomed to interacting with fictional characters and more importantly being influenced by them.

While Virtual Influencers are seen as a shiny new toy it is by no means a magic bullet and comes along with its own concerns. Foremost, they might not work across all industries, being more receptive in the fashion world rather than healthcare where the same influence might not translate. The other major concern is if human models now have to compete with perfectly animated avatars, there is a huge risk to the ‘self-esteem’ of the human race.

International fashion photographer Manny Roman noted, “While I do admire digital art, I don’t like the non-realistic message that is being sent out to society, I fear the CGI models image will escalate the body and image dysmorphic epidemic”.

Another concern (that we can thank Elon Musk for) is the potential power of AI and what impact that could have on society as a whole. Will AI evolve to a stage that the influence on human-kind is decided and determined by technology and algorithms  (On second thought, it seems like that’s already here). The important point to note is being able to distinguish the lines between technology and reality and acknowledging the mental effects the blurring of those lines might have (As seen in video game addiction in young children).

The future of virtual influencers could range from real models being scanned and working simultaneously across multiple locations in the world to reality TV shows that star hyper-realistic virtual characters, essentially anything could be possible. Ultimately there are still many questions unanswered and many avenues still to be explored in this category that makes it hard to gauge whether it is a positive step for the future of a negative one. But it is clear from the traction it has had so far that virtual influencers have proven themselves worthy of a seat at the table alongside their real-life counterparts.

The curious case of slow TV

Slow tv

In a world where people dash around crowded cities, slow TV is an oasis for the minds of the modern world. Essentially a reverse of the instant gratification of reality TV and 24-hour news shows, it focuses on a singular topic and explores it in real time.

Slow TV has its roots in an experimental film by Andy Warhol in 1963 where he captured a poet sleeping for more than 5 hours. It was reignited by the Norwegian Broadcasting Corporation in 2009 with a seven-hour Norwegian programme ‘Bergensbanen’ – a minute by minute video capture of a train journey across Southern Norway. An average of 20% of the country’s population tuned in for the show which led to further films being commissioned. The next landmark film was ‘Hurtigruten minute by minute’ – a coastal voyage from Bergen to Kirkenes which was 137 hours long (A Guinness record for length of film) with more than half the country tuning in, making it a remarkable success with international fanfare and adoption.

Over the last decade, creators have explored everything from watching a log burn for Christmas, floating down canals, train journeys, following the reindeer migration, knitting and even watching sheep graze peacefully. The concept recently made an appearance in New Zealand with ‘Go South’ a Prime TV programme taking viewers on a 12-hour journey from Auckland to Milford Sound.

The slow TV concept works because of its sheer contrast to our busy lives, it’s a chance to slow down and immerse in something that few other kinds of modern entertainment allow. A sensory escape of sorts, watching things as they unfold in their own time is strangely absorbing and relaxing. Whether you are watching a landscape unfold or starting at a log burn, the constant subtle rhythmic changes of slow TV is hypnotic with its strangely simplistic boldness. Some viewers have noted that it’s similar to walking in a forest or going for a hike, an opportunity to break from one’s routine and calm the mind.

Slow TV might be the way for us to pull ourselves back from overstimulation, accessing a relaxed sensory state that’s harder to come by when we are increasingly surrounded by modern tools that keep our minds in a semi-permanent overdrive. Having a continuous video capture with all the boring and interesting parts mashed together, the viewers become the editors of sorts allowing them to decide what’s boring and what’s exciting.  It’s the lack of character-driven plots and narration that opens up the space for interpretation and opinion by the audience.

A 2018 study by Deloitte that found that 91% of us are multi-tasking while watching TV (up from 79% in 2014), which essentially means we are only passively consuming what we turned on the TV to watch. Herein lies the real beauty of slow TV, its ability to cater to both passive and active consumption; working on two levels – as a beautiful view in your living room (think of it as an evolved version of Apple TV screen savers), or if you pay it some attention it could lead you on a stimulating journey.

As the world constantly looks for ways to make things bigger, stronger, louder and faster, the crawling speed of slow TV seems to be an antidote to the modern madness. A way to help us achieve a natural state of restoration and rediscover the joy of living in the moment.