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Big brands: watch out. Microbrands are capturing consumers!

By Silvina Rodríguez Pícaro

Every time my teenage daughter asks me to buy her something new, chances are I’ve never heard of the brand.

From BYO lunchboxes to Rothy’s flats, she, like most young people of
her generation seems to connect better with small niche brands. The
growing phenomenon of microbrands reinforces the concept that the
digital economy brings more and more opportunities for small businesses
than ever.

Purple mattresses, Felix Gray eyeglasses, Quip toothbrushes, Swell
bottles, Pompeii Shoes, and Ugly Drinks are only a few examples of this
new global phenomenon that allows startup brands to effectively compete
with well-established brands.

So, watch out, big brands!

This is just the beginning: small companies will continue to lure
buyers with their individuality and magnetism. Traditional retailers are
shrinking.

Surprisingly, they aren’t only losing market share to e-commerce
giants like Amazon, but to thousands of microbrands that are winning the
‘battle for the buyer’ through a better consumer experience, engagement
and trust.

In the business world, thanks to technological developments, there
is a new dichotomy: buying online vs. from the store shelves: well-known
and well-funded products are now competing with small, emerging
microbrands.

These new brands aren’t developed in a lab or at the Research and
Development department of some large conglomerate; contrarily, they have
risen from the grassroots level, produced by passionate entrepreneurs
with valuable knowledge and insight. Their new sales channels are
Amazon, Instagram, and Facebook.

New materials and new technologies such as sublimation, CNC, and 3D
printers, allow entrepreneurs to create high-quality products in small
quantities, at low cost and in record time.

These new technologies erase the need to invest in expensive molds
that must be amortized in a large number of units produced. Since the
risk of creating and distributing units that may or may not sell is
reduced enormously, products are tested directly in the market, without
the necessity for focus groups and other external costs.

Ten features successful microbrands have in common:

1. PROXIMITY: 

Microbrands create a nearly direct relationship with users.
Closeness is vital for sustaining a dialogue between buyer and seller.
To foster this closeness and trust, microbrands eliminate the middleman,
no longer depending on the retailers, so they can connect directly with
the consumer. Not only does this technique allow them a bigger slice of
the selling price, but it creates strengthens their relationship to the
consumer. Additionally, bigger profit margins tend to translate to
better ingredients or components, which mean higher product quality.

2. DIGITAL:

Microbrands are digital natives; they live and breathe online, and
they generate a community through engaging content that is promoted
through creatively crafted advertising on the Internet. In doing this,
they cultivate a bubble of loyal buyers, just like a giant brand might
do, but with minimal operating costs and a low risk of investment.
Today, big brands do not fight with other big brands, but with an
accumulation of small brands that offer unique products and attention to
their buyers.

3. SELECTION:

Microbrands don’t offer a wide variety of products (contrary to the
old fashion business model that aimed to provide “something to
everyone”). Microbrands offer mindfully curated content with just a few,
well-designed options. Casper, the online mattress retailer which
offers only three models of mattresses and a single pillow, has actually
dethroned the giant traditional mattress retailer Mattress Firm.

4. INFLUENCERS:

Microbrands have ‘friendships’ with other microbrands or people with
Internet fame and together they utilize the power of co-branding to
help each other connect with and entice their audiences, producing
higher sales and traffic for them all. Bloggers, YouTubers, and
Instagram Influencers are key players in these relationships.

5. PURPOSE:

Microbrands have a soul and a purpose, sometimes with ideological
statements and flags that big brands cannot raise because they could
potentially generate a crisis among their large and diverse population
buyers. Microbrands have the upper hand because they can cultivate a
brand by attracting certain groups of people without losing previous
buyers, simply building with those who support their mission.

6. SEGMENTATION:

Microbrands work with efficient segmented marketing, which does not
require massive customer management infrastructure or super CRM
software. Marketing through private text messages or Whatsapp, are
proven to be effective.

7. INNOVATION:

Microbrands develop and honor good and unique design. Furthermore,
quality is simply not negotiable. The amount of thought that goes into
their products is a huge factor in their success.

8. EXPERIENCE:

Microbrands understand very well that consumers no longer look to
buy brands, but experiences. Excellent customer service, easy returns,
and customization are keys to their success. In addition, their
attentive and usually fun online presence is another part of the
‘experience’ they provide.

9. TRUST:

Microbrands stand for their values. Claims like non-GMO, Fair Trade,
LGBTQ, or Made in the USA create a sense of social responsibility that
resonates with consumers.

10. SPEED:

Microbrands have an unconventional DNA. With technology as their
native language, they’re bred online and born to expand and move fast.
They are mobile, social, hyper-connected and deliver the perfect
customer experience to net-savvy consumers with remarkably high
expectations. These differences point to a significant gap between what
consumers want and what traditional retail offers.

This digital environment we are living in is the best opportunity
for small businesses that seek to differentiate themselves to flourish.
The microbrand model is a more agile business model as it reduces
verticality and bureaucracy.

Inevitably, some entrepreneurs will sell their microbrands to large
corporations. Will microbrands then lose their magic of being a niche
product for connoisseurs? Or will their new owners manage to take them
to a new global scale without losing their essence? In my opinion,
microbrands are to retail as segmentation is to marketing.

Both are here to stay.

Published in Latin Business Today.