Big brands: Watch Out. Microbrands Are Capturing Consumers!

Ten features successful microbrands have in common.

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.

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