October 24, 2017 / By Victoria Gray

With the rise in ecommerce, is branding dead?

I recently read an article on LinkedIn where the author said she thinks the concept of brands will fade. She cited the rise of bots (e.g. Amazon’s Alexa) and the sharing economy as two forces that will render branding irrelevant. She also suggested that the concept of ‘unbranding’ is on the rise and gave two examples. Like many people who posted comments below the article, I have to disagree with her point of view.

I think the need for branding will continue to be vital. Yes, brands will face challenges, as consumer behaviour and consumption patterns change due to technology. But branding is what a company stands for. It’s their value proposition to the consumer and, if done well, it’s clearly communicated and consistently delivered through the products and/or services a company provides. People buy from brands that deliver a value proposition that addresses their needs, which can be rational or emotional, or both. I just don’t see that changing 

To illustrate, let’s look at one of the examples of ‘unbranding’ the author identified in her article. It is a company called Brandless and yet, all their products are branded Brandless. Confusing, no? This company has a clearly defined value proposition, as outlined on their About Us page, which includes both functional and emotional benefits. So Brandless does stand for something and, therefore, is a brand. Currently, their products are only available through their website. But if Brandless were to expand their distribution and their products were available elsewhere, I bet their customers would still buy them. That’s because their customers understand what Brandless stands for and it meets their needs. That’s branding at work.

Yes, there are some categories where branding is less effective and required – a pencil, for example. The needs of consumers in those categories are very basic and the products have typically become commodities. And that’s always been the case. However, in many categories, consumers want more than a generic product from a faceless company. In fact, one thing consumers seem to be seeking more of from brands is meaning. The role of social causes looks to be on the rise in North America, according to two recent studies, especially among Millenials.

A recent Ipsos study showed that Canadians are more concerned than ever about corporate social initiatives. Half of Canadians are very interested in which causes companies support (up 4% since 2016). Almost half of consumers are loyal to brands that support good causes (48%, also up 4% from 2016). The brands that consumers think of first for their social efforts – Canadian Tire, Tim Horton’s and McDonald’s – have a long history of giving back and it has become a strong part of their branding.

In the US, a study called the Enso’s World Value Index shows that consumer preference for brands with meaning is even stronger among Millenials than older generations. This research looks at how Americans identify a brand’s purpose, how much that purpose aligns with their values and how much that purpose motivates brand advocacy and purchase. Brands that performed well with Millenials have clear, established missions, such as Starbucks and Honest Company. Given the size of the Millenial generation, having this kind of consumer connection can contribute greatly to a brand’s success, now and in the future.

Though ‘doing good’ can be rewarding for many brands, it’s crucial to stay true and consistent over time. There have been too many examples of brands who took a stand for or against something and then were exposed as frauds. The repercussions often outweigh any goodwill that a brand has built. A recent example is the financial firm behind the status of the fearless girl on Wall Street, which was caught underpaying women and minorities.

As you can see, I strongly believe that branding is here to stay. Technology will continue to change how we buy goods and services but it won’t change our desire to connect. Branding done well is how smart companies create and foster that connection. And, ultimately, that connection leads to sales.

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