Many lifestyle brands give the impression of a heavily made-up girl or coiffured boy, desperate for attention and seeking validation in the one thing that will perpetuate their insecurity, a one-night stand.
The brand hires the photographer, model and stylist, does the shoot, selects the best shots and calls it advertising. The advertising gets sent out to agencies, a few blogs entries are written and it is called a campaign.
This chain of events happens twice a year and follows the Spring/Summer and Fall/Winter seasons. The objective is to connect with consumers with as little effort or investment as possible. It is the brand equivalent of getting up, getting made-up, getting dressed, going out, getting wasted and getting laid. It is a superficial cycle and is symptomatic of a brand with little meaning and zero confidence. Today's consumers are savvy enough to see through the skin-deep brands. These are analog brands advertising in digital world and we are about to step into an algorithmic tomorrow.
What this reveals is that brands need to generate meaning. Companies like FreshBritain have stepped in to help brands undergo this often difficult transition from lifestyle to substance and develop a meaning in this algorithmic tomorrow. At Sebago a "New England Heritage" was invested with an ownership of "American Craftsmanship." Dr. Martens augmented "Music-Driven Lifestyle" with an expertise in "Industrial Design and Manufacture" and Franklin and Marshal's "American College Lifestyle" was imbued with an expertise in "Vintage Varsity Classics." These are only a few examples, but the lesson is the same: a brand needs substance and depth to compete in today's digital universe and it is substance and depth that will unleash the potential of an algorithmic tomorrow.
The answer is simpler than it appears and is based on an outdated wholesale model. In this model, brands sell-in to third-party retailers who then sell to consumers. The brand makes minimal margin and suffers a loss of control, but in return they get the certainty of big orders and wide exposure.
Retailers buy two to four times a year meaning brands have to support the deliveries with advertising two to four times a year. As a result the brand abdicates its relationship with the consumer in favor of a relationship with the retailer and then hopes that their one-night stand advertising inspires enough consumers to buy the product when the big orders are delivered.
The issue is that as we continue to consume and interact with brands online, we don't want one-night stands any more, we want meaningful relationships. The developments brought on by the world of the algorithmic tomorrow are changing our relationship with brands. Today, we can access all of our favorite brands online. We can order, receive, exchange and re-order all within the time span of 48 hours.
How many lifestyle and fashion brands have their inventories organized and logistics set up to fulfill this present day reality? How many have established a brand meaning of sufficient depth to sustain a long-term online consumer relationship?
As an example, try to buy the Fendi Monogram belt through Fendi's website. It cant be done. Instead, you have to leave your home, go down to Selfridges, wait in line, buy the belt and then return home. The net result is that Fendi shares half the margin with Selfridges while the consumer is grossly inconvenienced. This is the transaction of yesterday.
New brand start-ups have aimed to solve this problem by using a vertical model, allowing them to sell their products directly to the consumer from both their own physical and online stores. UVU, Rapha and Lululemon are just three new start-ups whose vertical models are enabled by the digital revolution. Existing brands, on the other hand, shy away from transitioning to this model because they are concerned that their existing retail relationships will suffer.
This has led to a race to vertical because at the heart of the race to vertical is a race to margin, and the vertical margin is twice that of the traditional wholesale margin. Basic economics dictates that companies who make twice as much profit with the same level of effort will thrive. Those that don't adapt and stick to the traditional wholesale and one-night stand model will fizzle out and die.
In order for the vertical model to be successful, however, it needs substance. It requires that consumers get addicted to the brand and keep coming back to feed their addiction. This is not simply about e-commerce it is about creating relationships. Consumers need to develop a meaningful relationship that is both fulfilling and reciprocal with their brands.
The bane of this connection is a temptation driven by social media to feed the beast and publish endless content and opinion to the point where a brand's communication, by virtue of quantity, becomes meaningless. Those in relationships will understand that sustaining a meaningful relationship is not about continuous, meaningless conversation; instead, it is about meaningful conversation, some of the time.
For a brand to create powerful relationships it needs to cultivate a point of view; it needs to have a platform from which to pivot and it needs a truth. This is especially the case for lifestyle brands that rely on one-night stand communication. To stretch the metaphor a little, they have gained a reputation, a reputation for hard-earned superficiality.
Algorithms will change the nature of brands. They already shape our lives, dominate the way our markets trade and calculate which medicines we prescribe. Simply put, an Algorithm processes decisions and accelerates outcomes. They will make it possible for brands to evolve from simply connecting people to products to connecting people to people. Targeting micro-trends and shifts in behavior, brands will be able to unleash the power that resides in the consumer/brand relationship.
Those brands we trust will be able to deepen our relationship with them. Lifestyle brands will be able to offer us more than just clothing and footwear. While the digital revolution has broken down the barriers, the algorithmic revolution will unleash brand equity beyond our imagination.
In much the same way computer-generated imagery changed what was possible in filmmaking, algorithms will change what is possible with brands, and most importantly, make these changes able to be implemented. For brand owners this will create incremental income, for consumers it will create new products and services.