This post originally appeared in Campaign US.
In a new era driven by digitalization, conventional business practices and household brand names in traditional industries such as retail, entertainment and travel are being upended by nimble startups. These disrupter brands are giving consumers experiences that are instantaneous, gratifying and intuitive. Above all, these experiences are simple.
As the on-demand economy continues to grow, fulfilling consumer demand via immediate access to goods and services, established brands must adapt or risk being left behind. The value proposition from disrupter brands puts the consumer’s experience first, driving brand loyalty and increasing conversation. From their inception, these startups have brought innovation, enhanced experiences and new pricing, among a host of new features and functions, which lead to commercial success and high priced acquisitions.
To examine the impact of simplicity on brands, we conduct an annual study based on a survey of more than 14,000 people worldwide—the Global Brand Simplicity Index. For the third year running we ranked disrupter brands that delivered simple, meaningful customer experiences and found that their deliberate focus on simplifying customers’ lives and delivering a simple brand experience that is both remarkably clear and unexpectedly fresh is paying off.
Two brands that ranked in the top five of our US disrupters index were purchased by established industry leaders for billions of dollars. In July 2016, Unilever acquired the No. 1 ranked US disrupter, Dollar Shave Club, for a value of $1 billion in an effort to improve technology and expertise around its direct-to-consumer offering. Additionally, the No. 5 US disrupter, web retailer Jet.com was purchased for $3.3 billion by Walmart to jump-start e-commerce operations for the retail giant. These acquisitions illustrate how simplicity pays off for emerging companies.
For example, Dollar Shave Club is reimagining the way consumers purchase razors. Its mail-order business model allows customers to sign up and select the number and frequency of razors they need for an affordable price. By creating simple, customized experiences, Dollar Shave Club has transformed the process of buying and using razors. The direct to consumer offering provides further utility beyond its core services by delivering a skin care line and other grooming products, providing additional convenience to users.
Disrupters also shift power to consumers. From 24/7 customer service to revealing hidden costs in e-commerce, Jet.com is empowering the customer to make more informed shopping decisions. The internet retailer’s technology rewards shoppers in real-time with savings on products that are bought and shipped together, reducing the logistics costs often concealed in the price of goods. The service also saves time— a valuable resource for shoppers— as its real-time pricing algorithm determines which sellers are the most cost effective in value and shipping. Furthermore, customers stand to save more by opting out of free returns for household items that they’re more likely to keep.
The disrupters that topped this year’s Index are optimized for a mobile world and focused on the platforms consumers most frequently use. From retail to ride share to payments, the spectrum of services is vast, but there is one commonality among all of these brands—simplicity. The experiences are unique to each user and customized based on preference. Even more, disrupters are creating opportunities for strategic partnerships. For example, some established brands are embracing disrupters to stay relevant in the shift to mobile. National Geographic is using Snapchat to disseminate photographs and content outside of their traditional print magazine, and Motorola, Intel and Dunkin’ Donuts have sponsored content on Buzzfeed in an effort to appeal to a younger demographic. These partnerships are helping legacy brands target and approach audiences from a different perspective to stay top-of-mind.
Based on consumers’ preferences for intuitive, easy-to-use services that are on-demand, disrupters like Dollar Shave Club, Jet.com, Uber and Spotify continue to impact the status quo. By offering experiences that are fresh, clear and overall simple, these brands are enjoying increased customer loyalty and revenue.
Read more about disrupter brands in our Global Brand Simplicity Index.
Brian Rafferty is global director of insights at Siegel+Gale. Follow him on Twitter:@btrafferty