Every business and brand is unique. They all have their own processes, efficiencies, culture and values. The origins of many brands is traced back to providing a solution that didn’t exist to a problem or unlocking a mystery for people. The next phase of development takes place when they move from solving mysteries to a position where they are part of an ongoing mission. Here emotional connection between people and brand is built based on what mission and solutions the brand provides. Brands achieve this through scale and algorithmic precision. They use mass or targeted awareness to help drive word of mouth.
It’s this type of habitual behavior by brands that helps define who and what they are to customers. But it also gets brands into habits that become hard to break. It is this very type of behavior that leads to a fertile environment for disruption.
So how do brands recognize disruption? And why does disruption take place? Well, if a brand moves to solve mysteries through a heuristic phase to run an algorithm, the issue is they don’t check the landscape that is parallel to them to see what new mysteries they can solve. Brands get what we know as inattentional or perceptual blindness. They are so focused on what they are currently doing, they cannot see what they need to do or where they need to go based on the evolution of behavior. As a result, they simply get left behind and left behind quickly in relevance because another player replaces what they at one time provided. In other words, brand disruption happens because customers have new wants and needs that the dominant or legacy brand fails to address or create. This is usually because algorithmic business models lead to profits rather than innovation.
We have seen this countless times and maybe the best way to explain this is through a real tale in popular culture around the shapeshifts in technological hardware and our listening habits. It is important to note however that a number of factors are involved that cause change. These include but are not limited to:
- Customer Sentiment
- An evolving marketplace – what people need in 2017 is different from what they needed in 2012 but could be similar to what they needed in 1917 (past is always prologue in disruption)
- The inability to inspire new customers or retain current customers (a common tale when you are running an algorithm, any straying from the path is seen by the brand as an unnecessary diversion)
- Cheaper Solutions
- Entirely new lines of business
- New technology which changes how we live and work (Amazon didn’t rise to power because retail is dying, it rose to power because of how we live and work and the need for delivery within timeframes and convenience factors in a long tail economy)
All of these factors are why we’ve gone from quick service restaurants dominating the landscape to fast casual now being the norm. Why we’ve gone from a world where apps like Uber have superseded taxis and limousines and a world where unbranded mix and match Uniqlo has outrun The Gap and Abercrombie & Fitch in a world of fast fashion and declining income among younger people.
So, what tools do we use spot these disruptions? Here are a few questions you should always be asking.
- What is the social sentiment of your brand?
- What are people searching for on Google or Bing that is bubbling on the fringe?
- What things are you observing in the world around you in terms of how people live, communicate, dress and conduct themselves?
Many times, companies spot these shifts but are either too early or too late to solve that new mystery. The first smartphone wasn’t created by Apple but by Microsoft. The first search engine not by Google but Archie. The first solar cells were created by Bell Labs not Kyocera.
A True Tale Of Perpetual Brand Disruption
Hi-Fi stereos were all the rage in the 1930s due to vinyl records and a market dominated by the brand RCA Victor. Then in the 1960s the transistor portable radio was created and Sony, Sanyo and Texas Instruments were the main brands in this space pushed by the popularity of AM radio stations. Did that obliterate hi-fi stereos? No, but the brands that manufactured transistors were different from the brands that manufactured hi-fi stereos. Recognizing disruption many times is understanding brand disruption isn’t a winner take all scenario. So, while you may still be thriving as a brand, you may not be thriving within a specific timeframe. This is what catches many brands off guard and is key in the recognition process. People may still be purchasing their products but those purchase habits are changing and the legacy brand isn’t adapting to where things are headed next. The disrupting brand is solving those new mysteries. This is why relevance is a quality signal in identifying disruption more than revenue.
So, did transistors eclipse hi-fi stereo brands and become the dominant audio device in the 1960s and 1970s? Yes, but ultimately portable headphones and players eclipsed the transistor in the 1980s changing the market once again. This new player was known as the Sony Walkman. Thus at this point Sony had eclipsed RCA as the dominant audio brand. From this point portable and personal players were the crux of the market. Sony had solid profitability. Then in the late 1990s things pivoted again due to a change in audio formats. The MP3 eclipsed the CD and cassette tape and several companies rushed to issue a player. There were several created by upstart brands like SIS, Diamond Multimedia and Eiger Labs.
But digital rights management switched things up again opening the door for what ultimately disrupted the entire market in the form of Apple’s iPod and iTunes. But were we done yet? Ultimately while many of us may point to the iPod innovating into the iPhone, the way we listen to music has changed again and is now dominated by things beyond the hardware including Spotify, Pandora and iHeart Radio apps. If we actually look at data, streaming services have eclipsed mp3s. But what will eclipse streaming? If fringe data is any indication, we are headed back to our past (again, past is prologue). What do I mean by this?
Vinyl is making a comeback. That is if it ever really left us in the first place.
All of this happened in the last 90 years. That’s a lot of change in that period of time. A lot of juggling back and forth between dominant brands and disrupted brands that no longer exist.
The question to answer now isn’t will you be disrupted (you will) but will you survive to see another day?
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