Why established brands need to start behaving differently


FMCG brands, regardless of how established or famous, now find themselves under pressure.

This comes down to the rise of the challenger brand – an increasingly serious issue established brands find themselves facing. The FMCG landscape has radically changed, principally due to attitudinal shifts of the consumer and the structural evolutions which mean lower barriers to entry. Both have created the fertile conditions in which challengers can thrive.

Initials commissioned quantitative research of over 1,000 consumers, polling those who had recently shifted from the regular purchase of a recognised brand to that of a challenger, across eight categories including food, household products and healthcare, to beauty and grooming. This research helped to give us a clear picture of the new status quo for challenger brands, and the impression they are making on consumers. The threat to established brands is even more apparent than people may have first predicted.

Five harsh truths established brands must acknowledge

  1. Regardless of the category, challengers are having an impact across the board, and consumers are shifting to these brands in their droves.
  2. Those who have switched brands are likely to be doing so permanently, and those who aren’t expected to seek out an alternative challenger, as opposed to returning to the original established brand.
  3. Contrary to some predictions, challengers are meeting expectations, even though they don’t hold the same legacy, or often the perceived quality, associated with established brands.
  4. The more invested shoppers are in their purchase, the more likely they are to experiment and be motivated to engage with a challenger.
  5. Younger consumers in particular are attracted to profound points of difference at an emotional level, which encourages them to react optimistically to the challenger mentality.

What makes challengers successful

We live in the Information Age and new rules now apply. In the Industrial Age, when established brands were at their peak, barriers to entry were much higher. Nowadays, with the rise of social and digital media, we’ve seen the creation of more accessible advertising channels. The internet has democratised market access.

Attitudinal shifts have also driven the growth of challenger brands: An enhanced desire for experimentation (a tendency away from brand loyalty), the desire for exceptional experiences and new immerging consumer priorities (with greater emphasis on brand integrity and purpose) are all having an impact.

Consumers influence the trends, and retail follows. Buyers in traditional retail are questioning the role within the category of many established brands, as it seems more productive to make room for challengers that bring something new to the slower growth categories and often at an increased price point. Retailers and consumers alike are prepared for change.

This creates the perfect opportunity for challengers to swoop in and make their mark. The question is, how can established brands compete in this new environment? The answer is to allow themselves to be taught by the challengers. Adopt their habits and rediscover the point of conviction which will inform both new behaviours and actions.

How will re-invention work? Firstly, shifts at the product level

This can be delivered via new product development designed to resonate with a new kind of audience, one that is used to infinitesimal choice and who is driven by values beyond product benefits. This will broaden brand appeal within the category, whilst removing the gaps that challengers could slide into.

Beyond product level, brands also need to change at the emotional level

Brands can make important changes by facing consumers’ current desires head on. This can be achieved through changes at the emotional level. Established brands need to revisit and re-frame their brand architecture to identify genuine points of difference, adopt radical new behaviours and ‘story-do’ as well as ‘story-tell’. This requires bravery and an appetite to step up and make changes, changes that match the conviction and belief demonstrated by those new brands who are resonating with audiences.

Whilst carefully managed tools such as meticulously detailed guidelines, brand books and established vocabularies still hold value, they are increasingly less effective in a highly networked world. Established brands need to move away from their rigid narrative, and instead have the courage to hand it over. They can trigger the start of conversations, but from there, consumers should be able to adapt and even inform the story. Thus, building brand relevance and trust with consumers who are looking for brands to “show me you know me.”

If we look to the future, now is the time for established brands to adopt new behaviours if they are going to survive. They can do this by following the challengers’ recipe for success.

This article has been written in collaboration with Simon Callender, Creative Planning Director at independent creative agency, Initials