Related Articles
Media fragmentation is leading to increased brand fragmentation and a loss of brand relevance to new generations of consumers. This is creating new opportunities.
Internet and streaming trends have led to massive shifts in content production, delivery, and consumption. These shifts are having a significant impact on Hollywood, distribution channels (network, cable, theaters, streaming) and ultimately on how and when end users consume media.
Internet growth and the ‘cutting the cord’ phenomena are not new topics. But these dramatic shifts in the media landscape are eroding the strength of global and national consumer brands, which is a relatively new development with far-reaching implications.
Media Distribution Channels
Consumers are no longer accessible to the big brands in the same way they were between the early-1900s and early-2000s. Big catalogs and print media grew in the late-1800s and early-1900s. Radio developed in the 1920s through the 1950s. Broadcast television started to blossom in the 1960s. Cable television exploded in the 1980s, which led to increased advertising, but also led to fragmentation as the three major (pre-cable) networks lost share. Despite that, consumers were still watching network and cable TV at home, listening to radios in the car and at the beach, and reading print media at home and on-the-go.
Easy access to the internet (mid-1990s) and the rapid adoption of smartphones and social media beginning in the mid-2000s have had a major impact on traditional TV, radio and print media, as more people consumed content via the internet.
A myriad of search tools, streaming services, podcasters, social networks, news sources, gaming platforms, satellite radio options and influencers, in addition to traditional channels, has led to massive increases in media channel fragmentation. Furthermore, it has enabled consumers to no longer rely on direct brand messaging, rather, on peer-to-peer communication and their own product research.
End users, young and old, are consuming media wherever, whenever, however and from whomever they desire. The consumer is no longer playing by the long-established rules of marketing engagement.
The Brand Challenge
As a former Blue Chip employee, I see tremendous challenges posed for the companies that have historically owned traditionally strong brands. Media fragmentation is having a direct impact on the way in which and how often these companies reach their target consumers, which dramatically impacts how effectively they can communicate their brand values.
I believe this media and brand fragmentation, along with major shifts in consumer awareness and trends, is leading to a loss of brand relevance and value. This is ultimately leading to new opportunities for new brands to flourish. These new brands include new innovative start-ups, as well as private label brands, which are driven by retailers and wholesalers.
Private Labels
According to the Private Label Manufacturers Association (PLMA), 2022 was a record year for private labels in all U.S. retail channels. Private label growth, at 11.3%, was nearly double that of national brand growth. According to Grocery Business, growth in store brands outpaced national brand growth in the first half of 2023, or 8.2% versus 5.1% respectively.
I’ve personally spent a lot of time over the past 15 years in grocery stores in the USA and Europe and speaking with many food industry experts. I have observed significant changes in the way grocery stores develop and market their private label brands.
The Rolling Stone Culture Council is an invitation-only community for Influencers, Innovators and Creatives. Do I qualify?
Shifting Value Equation
It’s easy to attribute some of these big shifts from global brands to private label brands on challenging economic times and pricing strategies, but it’s my opinion there are some much deeper factors at play. Here are five major factors I see challenging large established brands:
1. Economics driven by inflation, pricing, shrinkflation, discount strategies, internet sales, and changing physical distribution models
2. Erosion of trust in global brands observed in class action lawsuits related to claims, ingredients, and labeling issues
3. Shifting consumer preferences with the increasing importance of ESG (Environmental, Social, Governance) topics
4. Improvements in private label innovation, packaging, and marketing strategies
5. Media fragmentation leading to lower frequency of brand messaging reaching target audiences to deliver brand messages
These five challenges are major issues each on their own. Combined, they are making many global consumer brands less relevant to the consumer.
The Opportunity
While media and brand fragmentation are posing major risks to existing brands, they’re also presenting those brands and newer, younger brands with massive opportunities to connect with consumers in new ways with fresh messages.
Emerging brands have opportunities to target specific segments, geographies, and customer needs by developing offerings with relevant messaging. Traditional brand owners must develop new strategies to stay relevant. Finally, retailers have a massive opportunity to leverage their geographic and value chain positions to develop products and brand messages that are well-targeted and matter to their customers.
Existing Brands: What are you doing to address the new media landscape? How are you keeping your brand relevant?
New Brands: What gaps, empty spaces, and opportunities can you identify and what are your strategies to offer the right products with the right value equations to new customers?
Store Brands: What are you doing to leverage your position of trust, geographic location, and value chain proximity to the consumer to offer the right value equation to your customer base? How are you communicating this?
Summary
Dramatic shifts in the media landscape are accelerating the loss of brand relevance, especially to new generations of consumers. Shifting consumer demands and increasing transparency in sourcing and economics have also made it increasingly difficult for major global and national brands to fulfill consumer needs and wants.
While these major challenges present huge risks to the major brands, they also represent major opportunities for new brands, be they private labels or new players, to enter the market with the right value equation and brand messaging.
While branding as we’ve known it over the past 100+ years is dying, there are huge opportunities to develop brands in a meaningful way with new tools and new messages.
Long live the consumer brands that find relevance and the right marketing strategies.
