by Matt Weik
I’m torn on this topic, as I feel there will always be a place for retail brands to live. Consumers still enjoy going to stores, touching and feeling products, and speaking with the workers to find out more about a product. On the flipside, there’s a growing number of consumers who only shop online and refuse to step foot in a retailer to purchase anything. With this being said, can online-only brands slowly take over the market by creating their own community?
Build a community to build a brand
With many brands out there building a following based on their community and culture, I believe that such brands can put a dent in the market. Based on sales alone, the model works. Rather than spending money on retail promotions, paying for a regional sales team to visit retailers, and working with distributors, the money spent by these brands is on creating an internet following. They primarily use things like social media and their website to engage their customers.
Many of these online-only brands are creating a “lifestyle” brand where even though they are a supplement company, they are creating a buzz around a “cool factor.” Their community engages on social media. They take part in giveaways. They build momentum through an ambassador program in order to build a fanbase. And then they allow their fans to snap photos and be featured on their social media platforms. Overall, it seems like a win-win.
The brand’s community is ultimately who sells the products and brand. The brand sells swag such as hats, shirts, shaker bottles, towels hoodies, and just about anything they can throw their logo on. Then their loyal consumers buy into their vision (and swag) and help spread the word. They tell all their friends about new products they are using or how they are making money or getting free supplements by getting the brand sales through their dedicated affiliate/ambassador link. In essence, they are a free walking, talking billboard for the brand.
Having such a community makes consumers feel like they are part of something. Part of the brand – without being officially employed by the company. Many of these brands don’t even associate with bodybuilding or even competing in general. They try and push the idea that your worth isn’t how you place on stage, but rather what you do in life to leave your own legacy. Which in my opinion is pretty cool.
I don’t think I really even need to say this, but YouTube and Instagram right now are HUGE. Everyone is creating content and using these media outlets to get their story and brand out there. Many of these online-only brands bring on and pay influencers and personalities who have massive followings. Some of these ambassadors and influencers have their own personal brands too which allow their own personal fanbase and followers to engage with the brand they’re representing. Depending on the influencer (or celebrity), brands are willing to cough up thousands of dollars per post to be featured. Not that Kim Kardashian is a good example, but some brands have paid her upwards of over a million dollars to take a picture holding their product and post it on her Instagram page. Starting to think you’re in the wrong business? Me too.
You can find product placement all over an influencers channel. Whether it’s talking about the supplements in their videos or snapping a photo for IG with the product strategically placed in the background of the pic, brands are willing to invest heavily in this type of marketing.
Big brand beat-down
Now, let’s not solely focus on all the positives that online-only brands have when compared to larger brands that are in national chains and retailers. There are several brands who through the help of big-box locations like Walmart, Bed Bath and Beyond, Whole Foods, GNC, Vitamin Shoppe, Vitamin World, and similar, are making millions just from “one” retail chain.
While their margins are much lower than the online-only brands, they bank on the sheer volume that these retailers move through. Is the juice worth the squeeze? Absolutely. Rather than only being available online (which they also sell through online retailers and their own website), they are in all of the places that consumers shop anyway. Through in-store marketing and promotions, it helps build trial and hopefully brand loyalty if the consumer likes the product. Does this mean the consumer will only continue to purchase from that retail location? No. In fact, many will then shop online to find the best deal, but ultimately the brand is still making a sale regardless.
Will online-only brands ever replace brands in retailers? I don’t think so. The online-only brands are fairly niche and cater to a certain demographic (generally younger). When you have large legacy brands that have been around for 20 plus years, it’s hard to pierce their armor. So, while the industry and market might be changing, retailers are still king of the playground and aren’t going to be bullied around by online-only brands.