The End Of Brands?

February 18, 2014

The End of Brands?

From Richard Press’ Twitter (yes, of J. Press fame), I found this article by James Surowiecki on the decline of brand loyalty. Surowiecki writes:

It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.

Today, consumers can read reams of research about whatever they want to buy. This started back with Consumer Reports, which did objective studies of products, and with J. D. Power’s quality rankings, which revealed what ordinary customers thought of the cars they’d bought. But what’s really weakened the power of brands is the Internet, which has given ordinary consumers easy access to expert reviews, user reviews, and detailed product data, in an array of categories. A recent PricewaterhouseCoopers study found that eighty per cent of consumers look at online reviews before making major purchases, and a host of studies have logged the strong influence those reviews have on the decisions people make. The rise of social media has accelerated the trend to an astonishing degree: a dud product can become a laughingstock in a matter of hours. In the old days, you might buy a Sony television set because you’d owned one before, or because you trusted the brand. Today, such considerations matter much less than reviews on Amazon and Engadget and CNET. As Simonson told me, “each product now has to prove itself on its own.”


And this has made customer loyalty pretty much a thing of the past. Only twenty-five per cent of American respondents in a recent Ernst & Young study said that brand loyalty affected how they shopped.

You can read the rest of the article here.

Some of this strikes me as too much like the techno-optimism found in politics, where people used to think (and some still do) that the internet will help spread democracy, “rationality,” and whatever else they think is good. A lot of that has proved to be very debatable. 

In menswear, I think it’s fair to say that an increasing number of men have become interested in buying well-made things, but exactly how many of us are able to accurately assess quality is an open question. For example, beyond looking for full canvassing, can anyone really determine the quality of a suit? We obviously know how a jacket fits us, and how it makes us feel, but these aren’t judgements that easily exist outside of branding.

In the last ten years or so, the “heritage movement” in menswear promised to bring quality back to clothing. Some of that promise has been fulfilled – the trend has encouraged more men to buy Goodyear welted shoes instead of glue jobs, for example. However, much of the movement has also been about the emotional appeal of anti-modernism – where modern, machine made things are “bad” and old-timey, handmade things are “good.” Of course, many of the things marketed today as “old timey,” “artisanal,” and “handmade” aren’t even so. The things we take to be indicators of quality are often just themes brands have come up with to help market their products – themes that aren’t any less superficial than the sex appeals used in the 1980s and ‘90s. 

To be sure, things such as online clothing forums and (hopefully) blogs such as this one have helped give men more information about clothes and how they’re made. But to say that this has led to a meaningful decline in brand loyalty seems to me like saying the internet has helped us choose better restaurants. Few us really do serious research when it comes to finding a place to eat, just as few of us will really do exhaustive research when it comes to shopping for a shirt. Most of the time, our selection is boiled down to three or four brands we believe in (a priori), and we do our “research” from there. And, in doing that research, we’re just as likely to find bad information online as we are to find good information. 

Of course, none of this touches on how clothing is a way for us to signal that we’re part of an “in crowd.” Whether that’s a selvedge stripe on a pair of jeans, a “properly” designed button down collar, or the tri-color stripe that we pretend isn’t a logo on Thom Browne’s accessories, a lot of clothing is inherently about branding simply because they’re a way for us to brand ourselves to others. The snobby “avoid logos” adage is … in itself … a way to signal that you’re just part of a “better brand." 

Like much techno-optimism, Surowiecki’s thesis seems to take one small good thing about the internet and overstate it’s effect. Many of us have become more discerning customers, it’s true, but whether that’s really led to a decline in brand loyalty – at least in clothing – is highly questionable. It’s possible that fluctuations in sales have nothing to do with a decline in brand power at all, but rather with a speeding up of trends.