Think Tank: Secrets of the Other Half
In an Amazon-dominated world, e-commerce competition is stiff. Brands have to quickly determine strategies that uniquely position them to win consumer mindshare. A group of companies has found the secret to capturing customers’ hearts and minds — these are called enthusiast brands.
An enthusiast brand’s strategy is not to go after the masses, but instead cater toward a smaller, more targeted audience that aligns with the company’s values, mission and product emotionally. Whether it’s technical apparel for your sport or a platform that allows for your artistic outlet, brands that understand you and build a connection — not merely process a transaction — always have been the winning brands.
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For example, hair color company Madison Reed upended old school “box” hair color by leveraging augmented reality in its direct-to-consumer model. With an easy-to-use application to virtually sample hair colors, it’s bringing the hair salon to you. It has built a community of users that value top-of-the-line hair, but don’t always have the time, energy and money to spend hours in a hair salon. Through understanding a customer’s priorities and needs, it is taking on big brand in-home hair, and meeting the customer wherever the customer is — be it online, at Ulta or at Madison Reed’s color bars, and winning.
It’s simple. Smart retailers focus on customer and brand alignment that prioritizes personalized connections aimed at building communities both on and offline. The result is a new strategy that is shaking up and redefining the retail industry.
How to make the top seven
Thanks to social media and online stores, easy access to favorite brands is at consumers’ fingertips 24/7. As more brands develop a direct-to-consumer method, consumers will gravitate toward a “top seven” list based on specific criteria they value. While this is great for business, consumers tend to go back to their favorite brands time and again, and only have room in their lives to shop with a select number of consumer brands.
The goal of most direct-to-consumer brands is not to reach the masses but develop strong relationships with their core customers that entice them to keep coming back. So what are the criteria and how do brands reach the minds and hearts of a consumer? With a mix of products that are sustainable and align with the consumer’s values, offered by brands that listen to customer needs and whose mission consumers can rally behind.
For example, emerging athletic swimsuit line Jolyn has designed fashionable swimsuits for women with all body types and athletic levels. It has developed an active community of users made up of champion water polo players, club swim teams, everyday surfers, and general water sports enthusiasts. The suit was designed by athletes who understood the value of an athletic bathing suit. By understanding customer needs and identifying customer values, Jolyn has built a successful athletic swimsuit line that has attracted a strong following of water-sport-loving women that believe in the product.
Glossier is another company that has succeeded as an enthusiast brand. The makeup company celebrates all skin colors and textures, and builds its makeup and skin-care products on the idea that every face is unique. The company celebrates individualism by taking makeup back to the basics, under the principle that makeup should not hide imperfections, but enhance beauty. By understanding that its customers value natural-looking makeup and clear skin, it has created an engaged community of users looking for more natural makeup that cannot be found in the makeup aisle of brick-and-mortar stores. It prioritized building a community of followers first, then launched products to meet the community’s needs.
Not just a product
One way enthusiast brands build relationships with their customers is by identifying the type of company that aligns with their values. Now more than ever, consumers are placing an importance on the ethical implications of a product, not just in the product details or ingredients, but how the brand represents itself. Consumers want to be able to emotionally connect with the brands they use and have begun to place emphasis on brands that engage in philanthropy or use environmentally sustainable business models.
Jewelry company Kendra Scott established itself early on as a company that values giving back to the community as much as creating exceptional jewelry pieces. Through clear philanthropic initiatives focused on what mattered most to its customers, and on its web site and numerous social media posts at events with organizations like Habitat for Humanity, it has reiterated to customers the value it places on community service. Consequently, consumers feel good about purchasing its products, knowing that the company represents more than a beautiful necklace. Wearing Kendra Scott earrings shows that not only do you have good taste in jewelry, but you place a high value on giving back to communities.
Patagonia is another company whose mission and values resonate with its community of users. The company prides itself on creating sustainable outerwear, and activewear that is environmentally sustainable. It also announced it will stop selling corporate apparel, to get back to its roots as performance technical wear versus work wear. With an emphasis on quality and recyclable products, users know that when purchasing a Patagonia product, they are playing a small role in combatting global warming and protecting the environment.
When you know it’s good
Consumers have become more focused on the types of products their bodies are consuming and using. With this we’ve seen a surge in brands focused on health and wellness, especially for women. Through natural ingredients and transparency, these brands have built quality products that consumers feel good about using.
Hint, the naturally flavored water company, saw a market opportunity for healthy flavored water. After finding that so many flavored water beverages that were advertised as healthy were filled with sugars and diet sweeteners, it designed a product that would better fill this healthy-water void. Through a commitment to transparency, Hint shared on its web site, social media sites and bottle packaging the actual natural ingredients used to enhance its water. This quickly established loyalty and trust among a community that values health and wellness. Its community bought into a healthier lifestyle together and Hint is a symbol they share. By starting small and focusing on one simple principle — make healthy flavored water — it has been able to build a loyal customer base and expand more easily into other markets, like sunscreen.
Another brand that has succeeded in the health and wellness department is multivitamin brand Ritual. Not only has the vitamin industry lacked innovation for many years, it is often the subject of debate. Does taking a daily vitamin actually improve overall health or is it just another advertising scam? Ritual’s essential vitamin for women and prenatal vitamin offer all-natural ingredients that are easily recognizable and contain only the nutrients lacking in most diets.
It has also taken a different approach to advertising. Vitamins are often marketed as a “cure for all” or “miracle drug,” but Ritual’s social media posts and advertisements focus on real people and their benefits from a daily vitamin. In keeping with its commitment to transparency, Ritual also uses advertising as a platform to educate women on the benefits of the natural elements of its vitamins. By establishing transparency through every step of its sales cycle, Ritual has tapped into a community of women that value knowing what’s in a daily vitamin over what’s on the shelf at the drugstore.
Enthusiast brands are taking the retail industry by storm. While department stores and big box brands have seen a decline in sales, these direct-to-consumer enthusiast brands are thriving. The secret to their success is building a community of users that relates to the quality, ethics and mission of these brands, all while making their product more accessible and convenient.
Consumers today want to feel good about the products they use, and these brands have been able to communicate that message effectively online, in-store and through social media, creating brands that genuinely prioritize the customer and their needs. Yet, it’s important to remember that consumers only have the capacity to have this direct relationship with seven brands, per the Miller’s law philosophy that humans can only hold seven items in their short-term memory. So uniquely targeting audiences, like these companies have done, is critical to success.
Sonya Brown is general partner of Norwest Venture Partners.
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