How to defy commoditization
(A three-minute read)
Commoditization; it’s a force as ever-present as gravity, pulling everyone down to lowest common denominator – price. It happens when the market perceives little discernible difference among the products offered by brands within a given category. Except for monopolies, every business will feel the pull of commoditization. E-commerce and mobile technology are increasing that pull as they create more options and make it easier than ever to comparison shop. To a business, commoditization is like running with a baby hippo on your back. Over time, it is only going to get heavier and heavier – weighing down margins, investment and growth. It doesn’t have to be like this. There is one simple thing that can be done to throw off the hippo.
Being special is the opposite of being a commodity. I’m not talking a “we use the best ingredients” or “we’re rated #1” kind of special. That is a surface kind of specialness. I’m talking about a deep-down kind of special, an Apple under Steve Jobs kind of special. Commodity brands focus on making a transaction; special brands focus on making the world better. Apple’s purpose was to improve the world by ever challenging the status quo, by “thinking different”. This purpose embedded meaning into the Apple brand, and meaning is what connects humans together.
Meaning makes a brand special.
Special brands are the ones that consistently live out a bigger purpose across their entire enterprise. These are the kind of brands that invest to instill meaning into encounters and experiences – not just with prospects and customers, but also with their own employees, strategic partners and even their suppliers. For the consumer, a meaningful experience connects them to the brand on a deeper level and price becomes less of a factor. The meteoric rise of TOMS is a good case in point. In very short order, TOMS stole serious share in a very mature space despite having higher price points than comparable quality shoes. The secret of this success was having a vision beyond the transaction.
However, a brand’s meaning doesn’t need to be as lofty as addressing global poverty to be special. Take Stutterheim Raincoats. They believe in melancholy. They see the blues and the discontentment it brings as a powerful source of creativity. Melancholy drips throughout everything Stutterheim does. Their stated vision is to “change people’s relationship to the rain”. How special is that! Stutterheim has a vision for bettering life by encouraging others to be more creative by embracing the rain. This vision has made for meaningful experiences online and in some of the world’s most prestigious stores and boutiques. And it’s connecting. In just over six short years, Stutterheim Raincoats has become a fashion force attracting top artists like Kanye, Jay Z and Lorde – living examples of Stutterheim’s brand belief of melancholy and creativity. Attracting such a clientele allows them to demand as much as over $500 for what is essentially a rubberized cotton raincoat.
Both TOMS and Stutterheim make quality products in their respective categories. But, in my opinion, it’s not the product that is earning them their higher price points – it’s the meaning they carry. They’re not alone. Whether through intuition or intention, there is a new generation of meaningful brands rising in the marketplace and are making themselves very special in very commoditized spaces. And special is going to win every time.
Is your business a special brand?
Perhaps you should start by looking at its vision or mission statement. Does it include anyone outside of the transaction – does it address society at large versus just the business and/or its customer? Does it aspire to change things like people’s relationship to the rain or the notion that everyday purchases can help someone on the other side of the world, or even inspire us all to challenge the status quo? If it doesn’t, it’s time to begin reflecting on a vision that can aspire to something greater. It’s a challenging exercise. Get help if you need it, because it feels so good to get the hippo off your back.
By Glenn Deering
Lead Brand Strategist
Latitude is an independent, multi-disciplinary strategic brand and experience design agency. We build brands and invest 50% of profits into elevating humanity. Let's work together.