📉 What we can learn from recent failed challengers
What they did: There’s been a steady stream of challenger brands that have have fallen victim to the post-COVID landscape. Eve Sleep, one of the darlings of the DTC mattress category gold rush in the UK, filed for bankruptcy in June; Doisy & Dam ran out of money just last week; and of course we always point to Peloton as a clear example of a challenger that had so much going for it, but couldn’t make the transition into a true rival. And now there’s Made.com, a company that went public in July 2021 at a £775M valuation and seemed to have everything going for it and so much opportunity in front of it.
What went wrong? Well, much (if not most) of it has to do with the underlying financial and economic realities in and around the business. Retail and CPG brands have been particularly hard hit by the rising costs in their supply chain as well as top-line pressure on consumer spending habits. But Made.com and many of these other challengers who rode the wave of shifting consumer behaviours during the pandemic failed to anticipate and prepare for the post-covid realities of their category.
There’s an article in the Drum about it with quote in the article from an agency strategist about how Made needed to focus more on “social impact commitments, robust sustainability, and an over-riding brand purpose”. We don’t think that’s it - brand purpose is not what drove them out of business and not the big takeaway for other marketers…
👉The thing they missed was the ability to analyse, understand, and adapt to how their category was changing.👈
Challenger brands are fit for purpose for a moment in time in their category. They find a point of different and own it. Rivals are able to adapt to and with the category as it changes. They use marketing to not just bring the brand and product to market, but also to bring the market to the brand and product. The fundamental business challenges for Made.com and many of these other retail and CPG challenges are real. And maybe that would have been enough to knock them out, regardless of what they did on the marketing side. But they certainly would have had a better change to adapt and survive if they had focused a little more on anticipating and adapting to how their category was changing instead of expecting it would stay the same.
What it means for you: How well are you set up to understand and adapt to the changes in your category?
💗 How Maersk took a B2C playbook into a B2B brand
What they did: Maersk is a massive incumbent in the shipping industry. They’ve been around for 130 years and own 17% of the global shipping market. Of the shipping market globally. Fun fact: they also make up 2.5% Of Denmark’s entire GDP. So, basically - they’re big. And you don’t usually see big, old companies innovating on the marketing front. But there’s so much opportunity if they can innovate successfully because they already have the scale to make a big impact on their business and the category around them.
Maersk is in the process of “reinventing” itself from a shipping company into a supply chain and logistics company. There is, of course, so much that goes into making that happen across the business and brand. But a big piece of their strategy to make this transformation successful is to think and act like a B2C brand, not a B2B brand.
We’re huge advocates of this. B2C brands tend to be more advanced and effective with their marketing, whereas in B2B…let’s just say the bar is low. Most B2B businesses are heavily sales-led in their approach to growth, which means there’s a huge opportunity for those who are willing and able to invest and execute properly in brand-led growth.
How you take and apply a B2C playbook to your business if you’re in B2B will take some time and attention to figure out. Here’s a good blog post about the key differences if you want to dive a bit deeper. But if you’re a B2B company, you should read up on how Maersk is doing it (and check out the results) and see if there’s a way for you to bring in more of a B2C approach.
What it means for you: If you’re a B2B brand, what can you take and apply from the classic B2C marketing playbook?
🤑 Advice from Dollar Shave Club’s founder to challenger bands
What they did: Did you know it’s been 10 years since Dollar Shave Club released their viral video? That video, and being early in the DTC razor category, led Dollar Shave Club to a $1B exit by Unilever on only $150M of revenue, a move many still criticize. If you haven’t studied the Dollar Shave Club case study, you should. There’s more than that one viral video that led to their ridiculous exit, but honestly, that video and the breakthrough attention it received was a big part of it.
Dollar Shave Club founder, Michael Dubin, gave an interview recently, which included his perspective and advice on what it takes for today’s challenger brands to break through and win in the same way. It’s worth watching, but we’ll summarise and build on the main takeaway here.
Dubin’s main point is that yes, it’s harder to break through now than it was 10 years ago. But it’s the same principles that will make a challenger brand stand out and breakthrough. “You have to develop better IP, you have to be more differentiated...and you have to really find out who your customers are”.
Successful challenger brands not only build better products that solve customer needs in relevant ways, they also build brands that are sharply differentiated in their space. And that relevance and differentiation comes from a deep, nuanced, and intelligent understanding of who their customer is and what they care about.
That advice is timelines and applicable to anyone.
Oh, and Dubin is on an investor and board member in Liquid Death. See the similarities?
What it means for you: Are you pushing hard enough to differentiate your brand and comms in your category?