Millennial loyalty isn’t enough: Brands want love

Bloomberg

Gone are the days when the only goal of a company was to persuade you to buy its product. Now, making you feel kinship with a brand—even love—takes precedence.
At least, that’s what a group of influential startups believe. Eyewear maker Warby Parker, makeup seller Glossier, mattress retailer Casper—all of these companies are “direct-to-consumer” brands largely born on the internet. Sure, advertising has been about identity since before there was a Marlboro man. But these “digital native” retailers, known for indulgent niche products at accessible prices, have given an entirely new meaning to the phrase “brand affinity.”
From luggage-seller Away inviting customers to walk through a pretend airport security line to Seamless using its own data for a cute subway ad campaign, digital native brands have created a new algorithm. The traditional buy-sell model doesn’t fly anymore, said Americus Reed, a marketing professor at the University of Pennsylvania’s Wharton School. Younger generations weaned on the web demand a new kind of interaction—and much more attention.
This is forcing legacy companies to play catch up on yet another front. “Retailers in the physical space are going to have to provide something that is more experiential, that is going to draw people in to hang out and do stuff,” Reed said.
But they’ll have to move fast. Close to 7,000 physical stores were shut down by the end of 2017, according to research and advisory firm FGRT. In the same period, e-commerce builder Shopify Inc. powered over 600,000 online businesses, with 73 percent of purchasing traffic coming from mobile devices. The ability to instantly feed customer data back into a business model is perhaps the most critical change. ”While these disrupter companies are obviously much smaller, they are advantaged in their ability to obtain and to use that first party
data much, much more rapidly,” said Randall Rothenberg, chief executive of the Interactive
Advertising Bureau.
The growth of direct-to-consumer retailers is most appar-ent when it comes personal products for men.
IAB notes that Gillette’s share of the US men’s razors business, for example, dropped to 54 percent in 2016, from 70 percent in 2010, while the combined US share of shaving upstarts Harry’s and Dollar Shave Club rose to 12.2 percent, from 7.2 percent, in 2015 alone.
“It’s so easy to build a brand—get it live and throw up Instagram ads—that I think building a serious depth of trust with your consumers involves so much more than that,” said Dudum. ”When they need something, we’re here to help them.”
It may sound a bit precious, but responsiveness with a veneer of loyalty can make a startup stand out in a world where anyone with a phone can call themselves an entrepreneur. A company’s brand—the feeling, image or story consumers immediately recognise when they see it—is now everything.
“The industry had trained people that, in order to choose a mattress, you had to lie on it,” said Emily Heyward, co-founder of Red Antler, a Brooklyn, New York-based agency that was brought in to help create Casper’s brand. They decided that the only way to get people to buy mattresses online was to build a brand they connected with—and ultimately fell in love with.”