On the Brand Horizon: Building Brand Equity in 2016’s Fast Evolving Landscape

It has been said innumerable times before: we live in an era of experimentation and transition. With an increasing amount of information instantly available by the simple click of a button, brands must be smarter about how they stay current in the minds of consumers. Brand extension, through licensing or other models, is a low-cost and low-risk strategy for innovation incubation and disruptive growth, enabling companies to engage with new customer groups while offering existing fans additional opportunities to experience and enjoy a brand. Nevertheless, extension into new categories is by no means a simple task and in my opinion, far too many brand owners make the mistake of thinking a high level of brand awareness is enough for a new proposition to succeed. Easily put, an extension has every chance of doing well if it brings value to consumers, if it offers a unique selling point which meets a so far unmet need in the market. In 2016’s faster-than-ever evolving landscape, companies need to evolve or risk becoming irrelevant.

In the consumer packaged goods (CPG) world, strategic brand extension is a tried and tested method for building brand equity, reaching new consumers and generating additional revenue.  There are myriad success stories, most notably The Coca-Cola Company’s venture into fashion apparel and accessories, home décor, and more recently, sustainable products under its Ekocycle label. What seems to be on the horizon in the coming year, however, is the translation of household CPG products into related consumer services, building on key equities of the core offer and offering consumers solutions that in one way or another enhance the overall brand experience. For example, laundry detergent brand, Tide, recently launched a branded home laundry pickup and delivery service in Chicago, building on the previous success of its dry cleaning service which opened in 2008. And elsewhere in the CPG sector, diaper brand Huggies is set to extend their reach into the child-care business, working in close collaboration with its long-standing licensing partner, Disney.[1] In fact, translating product based brands into services has proven an increasingly popular strategy in recent years, with yogurt brand Chobani opening a New York café, pasta maker Barilla a fast casual restaurant, and food and beverage corporation, Nestle, rolling out its ‘Toll House Café’ concept to 45 locations across North America and the Middle East — serving cookies, smoothies, and ice cream, the majority of which are made using the brand’s core products[2].strategic brand extension is a tried and tested method for building brand equity, reaching new consumers and generating additional revenue.  There are myriad success stories, most notably The Coca-Cola Company’s venture into fashion apparel and accessories, home décor, and more recently, sustainable products under its Ekocycle label. What seems to be on the horizon in the coming year, however, is the translation of household CPG products into related consumer services, building on key equities of the core offer and offering consumers solutions that in one way or another enhance the overall brand experience. For example, laundry detergent brand, Tide, recently launched a branded home laundry pickup and delivery service in Chicago, building on the previous success of its dry cleaning service which opened in 2008. And elsewhere in the CPG sector, diaper brand Huggies is set to extend their reach into the child-care business, working in close collaboration with its long-standing licensing partner, Disney.[1] In fact, translating product based brands into services has proven an increasingly popular strategy in recent years, with yogurt brand Chobani opening a New York café, pasta maker Barilla a fast casual restaurant, and food and beverage corporation, Nestle, rolling out its ‘Toll House Café’ concept to 45 locations across North America and the Middle East — serving cookies, smoothies, and ice cream, the majority of which are made using the brand’s core products[2].

On the opposite side of the spectrum, an increasing number of experience-driven brands, such as restaurants, hotels and fitness studios, seem to have realized the potential in extending their trademarks to physical products. Spinning sensation, SoulCycle – a definite frontrunner in recent years’ upscale fitness craze – has partnered with leading retailer, Target, for a co-branded, limited edition clothing collection as well as a pop-up spinning tour which will see the companies offer complementary cycling classes in ten different cities across the US[3]. Is the new project, revealed a mere six months after SoulCycle filed for its IPO, an indicator that the company is ready to extend into an even wider range of products? After all, Gold’s Gym, the American chain of international co-ed fitness centres, has successfully expanded into an array of categories under license, including training equipment and accessories as well as drinkware and food storage such as sports bottles and snack containers. A SoulCycle branded protein shake? Remember where you heard it first.

2015 saw a lot of interesting brand extensions, co-branded partnerships as well as other types of brand collaborations. Crayon brand Crayola teamed with Zelemark for a collection of adult jewelry. Yoga pant phenomenon, Lululemon, released a limited edition beer, partnering with a local independent brewery. Swarovski teamed up with Misfit, and Martian with Guess, creating two of many wearable technology offers in what unarguably became one of the most talked about categories of the year.

In 2016, I hope to see an even greater level of innovation in strategic brand extension. And if the first month of this year is anything to go by (Pizza Hut’s ‘Hut Swag’ clothing line certainly sounds interesting), I think that we will have more service brands extending into products and vice versa. A nail polish branded nail salon, perhaps? I can’t see why not.

Nicole Desir is the Executive Director of Blueprint – the dedicated consulting division of 20+ years established brand extension agency, Beanstalk.

 

[1] Brandchannel

[2] Eater

[3] Well and Good