What About Brands?

Many years ago, I wrote a Market Watch column on branding.  I opined that the importance of brands might be declining in the action sports world as products became reliable and similar.  My friend and, at that time, editor Sean O’Brien at Transworld thought enough of it to immediate publish it online without telling me.  When I started getting love and hate emails on the subject I checked with him and found out what he’d done.

Though I wasn’t happy at the time, all these years later I’ve forgiven him.  Mostly.  It turned into a great conversation on a timely subject.  Perhaps the subject is timely again.

A conversation around branding must begin with the reminder that most products have competitors that make identical or close to identical products.  Differentiation is only accomplished through marketing in all its various forms.  I know- that’s not true for Nvidia!  What you mean to say is that it’s not true yet.

Everybody should be cheering for capitalism.  It is by nature deflationary as companies compete to make a better functioning product at a lower price.  As a consumer, that’s the kind of competition I want to see.  If I were a brand manager, I might not feel that way- at least not about my brand.

Brand management has challenges right now. 

The first is economic.  You’ve got a significant percentage of the economy who are struggling to get by. I expect it to get worse as the full impact of tariffs causes more inflation. 

At my local barber shop.  Danny, the owner, works his ass off 6 days a week to make ends meet.  He offers a senior discount which, sadly, I qualify for.  But I tend to pay and tip him on the non-senior price because I can.  I suggested he dump the senior price or at least raise it.   He said, “Jeff, I can’t.  A lot of my customers just don’t have any money.” 

It isn’t just seniors.  Younger generations have been hit first by the Great Financial Crisis and then by Covid.  Now, student loans totaling $1.,77 trillion as of the 4^th quarter of 2024 must be repaid again.

Can these groups afford to care about and support your brand the way they used to?  Doubt it.  This is what too much debt inevitably does to an economy.

Second, you’re losing control over your brand.  You no longer define what it means to your customers.  They decide what it means to them, and you better listen.  No, it’s more than that.  Give them the information they need to decide- even if you’re not proud of it.  Follow their lead.  They won’t follow yours anymore.  Extreme, even uncomfortable, honesty feels like a tool to differentiate your brand. Unless all the other brands are doing it.   Did I just say that screwing up but admitting it might make you credible? Look, this rapid fire change we’re all experiencing leaves me as confused as I’ve ever been.

Influencers, social media, small and specialized chat groups, screwed up supply chains, fewer store visits (think that trend may have found a bottom) and trouble keeping qualified help and now AI are all part of the problem.  People who become aware of your brand (customers or not) decide at the speed of light what they like or don’t like about your brand.  Their perception will have less to do with your products or prices. Meanwhile, AI is going to firmly ensconce itself between you and your customer. Will AI be the customer you really have to care about if it’s the gatekeeper between you and your and an actual person? I can imagine the next attempt to attack your systems coming from AIs rather than other servers.

Still important but not new is the requirement that brands deal with a host of things that cost money but don’t generate a competitive advantage because everybody else has to deal with them: shoplifting, sustainability, returns, growing willingness, even eagerness, to buy used products, and web site management. They all force you to be reactive.

Remember when supply chains might have been long and slow, but they were generally predictable? Being more able to influence customers’ brand view?  Creating the monthly ad and agonizing over what image to use?   Having a more or less reliable fashion calendar?  Printed catalogs?  Going way back, remember customers paying a full and ridiculous price for a snowboard in advance that wouldn’t arrive for months (if they were lucky)?

What I’m saying is that I use to know, or thought I knew, the steps to “build” a brand.  Now I’m not so sure.

The third problem is societal chaos, tribalism, rapid change and general distrust.  You’ve heard the term The Fourth Turning.  I recommend Neil Howe’s book The Fourth Turning is Here.  Helps you understand what you are dealing with and why.  It offers insights into how generations behave during a crisis period (which we are firmly in).  It’s a funny place to find branding insights, but it may be your best shot.

Attention spans are not what they used to be.  Here’s an example of how I’ve reacted. When I drive, I typically have my radio on to one of a handful of stations (sports, business news, classic rock, NPR).  I got tired of the shouting, oversimplifications, demands for attention and endless ads.  It’s all meaningless noise.  I switched to a classical music station.

I’m not a big fan of classical music, but suddenly it was peaceful and calm in my little automotive space.  I could breathe, relax, and think.  You’re reading some of the results of that change right now.  Even though it was my decision to change to classical, the positive impact came as a total surprise to me.  I literally, immediately felt better- calmer.  More on this below.    

And number four- the most troubling to me.  China makes lots of everybody’s products.

Let’s say I’m right about the issues above.  Suddenly, there’s a 30% tariff on the products you import.  Maybe you reduce them by some transshipment or assembly process, but that incurs extra costs.  Maybe you’ve started to move production out of China.  Takes time and money.  Finally, you must decide to either reduce your margin or pass incremental costs on to already stretched thin customers who may not be as committed to your brand as they were.

We don’t yet know exactly the impact of tariffs. The uncertainty may be as bad as the actual tariffs. Not good for the bottom line.

Your Chinese manufacturer watches and thinks, “With those extra costs, there’s not enough meat left on the bone for the brand owner and me.”  He also notices declining brand loyalty and resistance to higher prices.  Chinese company BYD, you probably know, is taking over the European electric car market by offering a better product at a lower price.

We’ve all dealt with grey market, but what’s to stop your Chinese manufacturer from making and selling the same product (with a slightly different name) he’s been selling you for a lower price either online or direct to retailers? I am getting to the point where I can imagine a Chinese manufacturer promotes their product by saying, “We’re the brand’s manufacturer and it’s exactly the same product for less.” 

How many of your customers would care?

We’ve come to the point in the article where I’m supposed to say something constructive rather than moan and groan and depress you.  I’ve painted the worse possible scenario with the Chinese manufacturers, but I don’t think you can ignore it out of hand.

Let’s go back to my calm space in my car with classical music playing instead of people braying at me.  How can your customers come to think of your brand as a calm space?  These days, everybody needs one- the challenge is they don’t know they need it. I didn’t know until I turned on Mozart.

If competitors are throwing stuff up on Instagram daily, tell your customers you’re giving them a break for a week.  Explain why.  You’re giving them a chance to think about their priorities rather than bombarding them with data they don’t have time to parse. Offer them a meditation to download.  Engage them in a conversation about what quiet time they have and what they do with it.  Acknowledge the environment and ask how you can help.  I’ve got a bunch of ideas about what a “calm” store might be like.  Classical music in a sporting goods store?  I’m probably crazy. Maybe surfing, or mountain biking or snowboarding is your customers quiet place. Connect to it from the calm perspective.

Make a line of socks that just have Shhhh! on them.  Somebody should start a brand called “Calm” or “Quiet Time.”  There’s a company called Calm that is getting some traction.  Here’s the link to their Wikipedia page.

There’s more thinking required about how to do this.  But it’s an interesting idea for a market position.  Am I hopelessly naïve or ahead of my time?