What Are Challenger Brands Doing In 2021?
This article was originally posted in 2020 but has been updated in July 2021
The first decade of the 21st century has seen the continued rise of the challenger brand as it accelerates and morphs from its early establishment in the 1990s. This is not least because, although challenger brands come in all shapes and sizes, the application and diffusion of automation and digitisation has reinvented many traditional sectors.
Brands should always be distinctive, compelling and enduring; but the very best new brands are often built upon conviction and innovation that goes beyond distinctive and towards disruptive. We find it useful to consider different types of challenger or disruptor brands to apply to clients’ business challenges and opportunities.
About a decade ago, one of our team did some research into different variants of challenger brands and made a list which has proved useful since. Looking back on this, we thought it would be interesting to think again about these different versions and how they have both fared and been applied in the intervening years.
The Next Generation
This is a metaphoric, acerbic way to unbalance a number one brand or an oligopoly by positioning the incumbents as ‘perfect for the past, but the world has moved on.’ In the UK and beyond, Sky TV and Dyson have challenged long established market leaders, while Tesla became more valuable than the Ford Motor Company after just 13 years when Ford had been around for 113 years and produced many, many times more vehicles annually.
The Next Generation concept has been liberally spread across many sectors as a result of digitisation. As we enter the 2020s, many brands claiming Next Generation leadership are applying an element of sustainability to their products, propositions and brands. Next Generation branding is all about sustainable products, managing end of life and the circular economy. For example, Apple's operations run on fully renewable energy, while eco search engine Ecosia had 15 million active users and had planted more than 129 million trees by July 2021.
This concern for the planet's future within the digital sector came to the fore in March 2020, when the European Commission triggered regulations intended to apply to a range of household items such as mobile phones, textiles, electronics, batteries, construction and packaging. The initiative was designed to ensure that products are designed and manufactured to new standards which reduce the amounts of raw materials in production and the emissions they produce.
As importantly, these products will need to be repairable if they go wrong. This is going to be quite a big change: for example screws replacing adhesives in the mobile phone manufacturing process, with a likely impact on the very appearance and desirability that underpins some mobile phone brands. In turn, this creates the possibility that the trend to covet new phones will become stigmatised as 'throw-away culture' comes under increased scrutiny. Since March 2021, the Government introduced tough new rules that legally oblige manufacturers to make spare parts for products available to consumers for the first time in an effort to combat the widely-accepted practice of built-in obsolescence.
It seems likely that from now on, a combination of scientific advice, regulatory nudges and societal appetite will mean that Next Generation brands in the UK are going to be those whose products are demonstrably recyclable, environmentally responsible and in line with the UK Government’s carbon neutral objectives for 2050.
The Irreverent Maverick
The Irreverent challenger brand is all about attitude; it’s a gangster. A little like an extreme form of music, these brands are willing to take risks and apply a degree of natural arrogance which will serve to alienate many consumers in order to make their fans adore them. Nike, Red Bull and Yorkie (not for girls) have applied this to great effect during their progression, as did Top Gear in its heyday.
In the past decade since the original research discovered these different forms of challenger brand, UK society has witnessed an oddly polarised perspective on questions of irreverence and worse. In one direction, the confidence gained by the Me Too movement and the increased acceptance of gender fluidity have been among influences that have shifted public perception away from language and behaviour which was previously acceptable, and now is considered problematic. Corporate tone of voice documentation such as MailChimp's widely lauded Content Style Guide has sought to address sensitivities about topics such as race, gender, and sexuality in order to ensure their communications reflect their ethos of inclusivity and respect.
At the same time, the rise of 'cancel culture' has led to consumers being more critical of brands that cross the line in pursuit of 'The Outlaw' brand archetype. In 2021, BrewDog is a clear example of this approach, with the brand coming under fire for its toxic workplace culture and irreverent social media comments from its founders. Given this paradox and the complex and divisive climate it produces, there is clearly still scope for brands to stand up for what they believe in order to appeal to niche markets which share their perspectives and convictions.
As Bob Dylan once said, ‘you can’t please all the people all the time’, so the combination of paradox and polarisation perhaps creates a more favourable climate to ensure that brands focus on pleasing those they wish to at the expense of those they don’t. We suggest, however, that you proceed with great care. Just look at how Gillette was showered with both acclaim and abuse after launching its advertising campaign promoting a new kind of positive masculinity.
Missionary or Cheerleader brands are dedicated to a ‘higher order benefit’ as we sometimes call it. They aim to combine their commitment to their higher order with their influence to promote this agenda, whilst benefiting their brand too. Benneton has been a consistent example of this, as is Dove, which describes its mission as being ‘to ensure the next generation grows up enjoying a positive relationship with the way they look – helping young people raise their self-esteem and realise their full potential.’ Naturally Free Trade products come into this category.
This brings us again to the question of the role of environmental responsibility within branding. Since the penny dropped in 2019, and we have seen this tipping point appear between ‘pre Attenborough and Greta Thunberg’ and change in understandings and attitudes since their interventions, putting this at the heart of every brand across the land seems tempting – and in 2020 we saw Nike announcing their ‘recycled training shoe’ and Adidas partnering with a start-up to recycle their shoes.
Our advice at this point is simply that any hints of ‘greenwash’ - that is to say, inauthentic attempts to appear to be environmentally responsible - are going to have a much worse impact on the way that any brand is perceived than avoiding making any claims or overtures that cannot be substantiated. Avoid greenwash because the court of public opinion, informed by an increasingly engaged media, will find you out.
The Enlightened Zagger
“I know the world has been conned into this, but I am gonna stand up to it.” So goes the rallying cry of these streetfighting brands, christened by someone as Enlightened Zaggers. There is an injustice that has to be addressed, and they’ll be the ones to do it.
King of Shaves and The Dollar Shave Club are both doing this in the men’s grooming sector where Gillette has dominated for years, and Skoda’s masterful resurrection from the butt of jokes to one of the most respected, award-winning car brands achieved this in its own, self-deprecating way. You won’t believe it’s a Skoda.
It seems reasonable to place Uber in this category in recent years. With the benefit of their technology and their employment culture, and despite its many critics, Uber has effectively told cab drivers that they have been getting away with too much for too long, and they are going to muscle their way in between them and their customers. Ironically, Uber’s main rival, Lyft, can be said to have appeared on the scene and said of Uber “I know the world has been conned into this, but I am gonna stand up to it.” What goes around, comes around…
Like Robin Hood, Democratiser brands take quality ideas from the wealthier and more exclusive few and create a value version for the inclusive many. They borrow style and cachet from luxury brands and disperse it to the mass market.
In the fashion sector, Topshop and Primark are known as ‘catwalk copiers’, while Boots No7 was a very early example that launched in 1935 during a time of economic depression when beauty cosmetics were mainly the preserve of the rich.
Democratisation of most forms of consumer goods has been achieved in the past decade, not so much by the brand owners themselves, but by the diversity and choice of paths to purchase. For example, at Mackman we provided advice to a client on the launch of two new high-ticket-price product ranges for which they had exclusive distribution agreements to sell to retail and consumers in the UK.
But, far from acquiring the full advantage of the exclusivity as intended, the entire marketing strategy - Product, Price, Place and Promotion - is compromised by consumers’ option to purchase these items from overseas suppliers Amazon, eBay and others.
Add to these the rise of the likes of Wowcher, Groupon and others, plus the aggressive online success of Sports Direct in particular in the UK, and it is easy to see how democratisation is occurring via these channels rather than through product brands.
These brands aim to provide the sense that they operate at a human scale, thereby challenging the faceless corporate brands in their category. For some, this is born of authentically human scale, or perhaps ‘craft’ roots and then scaled – such as Innocent, Pret A Manger, Green and Black’s and Tyrells. In addition, there are examples of large groups creating brands like this from scratch. Was there ever a real Mr Kipling? What do you think? Sadly not.
However, all four of the above may have authentic human scale and Human branded roots, but all have been acquired by major groups in order to scale them – being Coca-Cola, JAB Holdings, Mondelēz and Hershey. Taken at face value, it would appear that big corporations don’t have the necessary insights and innovation streams to create and nurture their own challenger brands; instead they de facto outsource this to smaller organisations with the people, passion and authenticity required to make a human scale connection to the needs and desires of human nature.
Again, we appear to be witnessing a paradox aligned with demographic polarisation. In food marketing, there is most certainly an emerging market for craft beers, traceable farm-to-fork meats, locally sourced fresh food and all forms of handmade and premium products.
These, more than most, need to establish distinctive, compelling, enduring, and above all, authentic brands to tell their stories and project their added value. But, at the same time, the discount retailers are stacking it high, selling it cheap and expanding rapidly in the UK.
The Plucky David
The Plucky David is the brave, tiny business that goes up against the Goliath scale giants in order to give them a bloody nose! As a brand, Virgin started off as a Plucky David, with one man and his beard using his hippy music money to pick fights with all the sectors we loved to hate: insurance, railways, banks, and national flag carrying airlines.
Right now, PlusNet is fighting this fight within the broadband sector, and lots of mini energy companies keep appearing and pluckily taking on the big boys. GiffGaff and Voxi are replicating this success with their flexible data plans in a sector that typically thrives off 'confusion marketing', or simply baffling the consumer with incomparable tariffs and technical wizardry to the extent that they stick with their current provider rather than risking a switch that could save them more money.
As mentioned in the piece about Human scale brands, small, traceable, local and handmade brands remain popular at the premium end of the UK market. These typically small brands have an element of ‘Plucky David’ about them, as they invariably compete with corporate giants.
One often-quoted success story is that of the Cambridge Satchel Company which, from a one-woman (and her mum) standing start in 2008 and funds of just £600, had reached revenues of £8 million by 2011 and appears to have gone on to grow steadily ever since. We already had Mulberry and Burberry and Smythson and all the others, didn’t we? Who knew that we needed another luxury leather bag company? Plucky Julie Deane did.
The Consumer’s Friend
The Consumer’s Friend is not dissimilar to the Plucky David or the street fighting Enlightened Zagger, but very much more about standing up for the consumer in the face of corpulent corporates who have exploited them, rather than directly going head-to-head with a specific incumbent.
Whilst Virgin may have started as a Plucky David, the success they have enjoyed makes them another form of Goliath in many respects now, but still one that finds ways to put the consumer first.
In the years since the original research, price comparison websites have appeared in all possible forms, effectively claiming to be the consumer’s friend by helping them to select the best option from a competitive map. And as we progressed from an avuncular dog selling us insurance on the TV, to a chaotic family of meerkats providing price comparisons online, we have now reached the point where they automatically switch our insurance and other accounts across to the lowest cost provider as we sleep. Love them or loathe them, Aleksandr and his friends have certainly cut through, providing an unquestionably consumer-led service at the expense of the companies who gain the contracts. Simples.
The Visionary brand does not exist to address Rumsfeldian known unknows. Instead, they exist in a universe where they create their own vision for the unknown unknowns in the future and pull us along with them.
No one has achieved this quite as emphatically as Apple, or more to the point, Steve Jobs over the years until 2011. When he told SoCal that he was going to make a device that was a bit like a phone, but could not make calls, and a bit like a computer with no keyboard, no one wanted it. He made it anyway. It’s called the iPad.
We have already mentioned Tesla and its higher valuation than Ford, despite Tesla being a fraction of the size and 100 years younger. Whilst maybe not a ‘Visionary’ given that everyone knew that electric cars would arrive at some point in time, it is difficult to imagine the weight of momentum on the side of oil-based fuelled vehicles and against battery power that Elon Musk has had to endure in order to build his empire which, as much as any other, appears to be leading the transformation from fossil fuelled cars to electric.
The Game Changer
Although more aligned with a Visionary Brand, Steve Jobs and Apple fit into this category too. Do you remember the record industry? iTunes changed all that. Do you remember postcards? Facebook changed that. Before these digital game changers, easyJet was a game changer.
Until then, everyone who flew around Europe, at any time of the day, was given (and charged for) a meal! Suddenly flying became affordable and flexible; and while what glamour that may have still resided around airports is now confined to the First Class lounges, everything about flying is much more convenient. App, tap, fly.
What Does 2021 Have In Store For Challenger Brands?
All of which brings us to the obvious conclusion of this piece. The combination of the Internet and the almost inconceivable brilliance of Google is probably the ultimate game-changer in recent years. Not only has Google become a verb, but its impact on just about every aspect of life has already been truly transformational. And do you know what? It’s only just begun…
Building distinctive, compelling and enduring brands has always been Mackman’s forte. In a world in which digital development transforms continually and exponentially, in which conversations across global networks happen instantaneously, and in which technology is gathering big data on all of us, all of the time, it has never been more important to look wide and far before deciding on a brand strategy, and delivering it across every touchpoint, from packaging to PR and from online to outdoor.
If you're a challenger brand and need help with branding, web design & development or marketing insight and strategy, then we're here to help. Give our specialists a call on 01787 388038 or leave a message on our contact form and one of our team will get in touch with you.