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Disruptive Innovation

Creating Brand Categories For Growth

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Creating Brand New Categories For Growth

Market disruptions happen when a brand refuses to play by the category rules. Netflix destroyed the video rental business. Uber threatens to do the same to the taxi industry. Books that are available in online form redefine how we acquire knowledge.

Sometimes this insubordination works against a product: A high-end dog food that had to be sold in the grocery’s refrigerated section failed, because shoppers just didn’t think of finding pet supplies there. An epilator for men failed for a different reason: Males couldn’t swallow the idea of hair removal that didn’t involve the testosterone-laden act of shaving. The new solution was more efficient. It just didn’t fit conveniently into the customer’s expectations about male versus female products.

But wait – under the right circumstances going against the grain actually creates wonderful opportunities. What if a marketer creates a new category, possibly by merging two existing ones? Chrysler fused a station wagon with a sedan to invent the minivan. This new category then spawned yet another, with the advent of the modern SUV in the 1990s. Wearable technology fuses fashion accessories with computers, so a stylish woman can wear a piece of Swarovski jewelry that also happens to monitor her heart rate.

Today, we see a great example of this fusion strategy in the apparel business. The industry is showing anemic growth with one exception: Athleisure. This stepchild of leisure clothing and athletic clothing (formerly two distinct categories) has created an entirely new market, and a cultural phenomenon as well. The term athleisure recently entered the Merriam-Webster Dictionary. And, Morgan Stanley projects global sales of this new entity will exceed $350 billion by 2020.

A Chinese curse decrees, “May you live in interesting times.”

Now comes the “interesting” part of that Chinese curse: As we see in the case of the athleisure hybrid, today’s consumers no longer yearn for conventional categories. They’re climbing out over the walls we put them in. Like leisurewear versus athletic wear, the basic assumptions we use to make sense of the market have collapsed.

What’s also “interesting” is that these dichotomies are embedded so deeply that managers don’t even think about them – until they disappear. Fundamental categories that form the bedrock of marketing strategy and customer insights no longer exist. It’s a management cliché to exhort employees to “think outside the box,” but when it comes to customer insights perhaps we need to take this expression a bit more literally. Don’t just think outside the box – throw the whole box away.

Carefully identify the categories your industry uses to define offerings. Then demolish them. Maybe you can fuse a fashion product with a functional one. For example, some pioneers in the emerging “smart garment” domain look at a pair of panty hose, but they see something other than silky legs: A “delivery system” that can literally apply vitamins, medications and caffeine (that reduces the appearance of cellulite) to the body. Just add some microencapsulation to the fibers, and you’re playing in a whole new space.

Hybrid products and services that combine features of two or more existing verticals get to define the rules for a brand new category – at least until someone else tears down that wall as well.

Contributed to Branding Strategy Insider by: Michael Solomon. Excerpted and adapted from his book “Marketers, Tear Down These Walls!.” iBooks.

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