The Entrepreneur - Age

& Why established brands are starting to fear for their existence..  

It is an indisputable fact that the Internet revolution and with that the rise of social media changed not just in general the way people live, but brought change to the entire consumption field and put pressure on existing brands...

There are many shifts taking place in our economy right now. One that has taken place already is the speed at which what’s cool is changing, so called to „viral trends“. As we are living through a time of information overload, where every time you refresh your page, new information and ADS get thrown at you and as a result, the speed at which we consume has increased drastically.

For big brands it is difficult to react as spontaneously, create and distribute content around a hot trend, before it’s done. A trend usually lasts for no longer than a few weeks, sometimes a couple of days.

 In the traditional ways of advertising it was only possible for the big players to place ADS, because the spots for radio and television ADS are limited, there are only so many channels and time of the day where you could reach the appropriate audience. 

Now with the digital revolution, the Internet has arbitraged out the traditional media channels and replaced them with everyday people like you and I, who have realized they could simply create their own show, build and audience and become more influential than the most well-established brands.

Meanwhile the famous longtime-established brand Gucci has 15,8 Million Follower 

The youngest sister of the Kardashian Clan has an audience of 95,5 Million People (updated). 

Is it fair that a 19 year old girl has a larger audience? Well that's the decision of the market in 2017 an we have no other choice but to accept that. This girl started like most social media Influencers with affiliate marketing, earning commissions for referring her followers to an Insta-boutique..

Insta-boutiques like prettylittlething are owned by Millenials who recognize such trends and are quick to respond. Instead of spending and time and money on Ads, they produce what's working in 2017.. commission-based brand ambassador who can relate to their target audience and the followers trust. 

She continued building a personal brand:

And finally launched her own make-up company that in a matter of seconds turned into a successful sold-out global brand:

Prada’s biggest competition isn’t Gucci, but an army of 

Insta Boutiques!

Another interesting shift is in digital e-commerce and well-established brands affected by it.
One affected sector I find especially interesting:  Luxury Labels 

Every time I’ve worked with an owner of a luxury brand the decision for them to move digital has always been a significantly more difficult one. Their audience often look for more than just a product, they want the experience, the feeling of exclusiveness and need a more personalized intimate service, which is harder to provide online. When you shop online you don’t necessarily feel special. Another issue luxury brands are facing is the issue of security and shipping with products worth thousands. Subsequently, as much as 40% of high-end brands do not sell products online. And that again subsequently has opened up a new market and turned small social media brands into million dollar businesses almost overnight.

Examples:

Fashion Nova

(a brand that focuses on Instagram only and is known for its large portfolio of popular brand ambassadors)

House Of CB   

Mistress Rocks

Founder & CEO of the two previous mentioned brands, 23 year old Conna:

The Effect On American Apparel

The famous clothing retailer American Apparel — one of the fastest growing U.S. companies only a decade ago with 130 stores in the United States — filed for Chapter 11 bankruptcy protection in 2016. In the last quarter reported before American Apparel filed for bankruptcy protection, revenue dropped to $134 million from $162 million in the same quarter the year before. My conclusion as to what must have played a big role in such a dramatic fall.. the company and its major competitors are getting stabbed, one by one, by the army of social media boutiques that offer similar styles, more options for better prices.

(This is a picture I took in Hamburg, Germany of the famous American Apparel Store that's been there forever, but isn't any longer)

We’re currently witnessing small online boutiques who have built an entire brand on social media platforms like Instagram take over. The traffic and conversion rates of these sites are truly astonishing. The owners often themselves are part of the new generation and understand that television stats tell can be positive whatsoever, but that doesn't change the fact that most people have become blind to them. Think about it.. how many commercials do you watch and respond to them as the company would hope for? Most of the time, if I don't skip an AD I make fun of the counter-productive psychology they try to apply.

Or BANNER & POP-UP ADS! I could write an entire blogpost about how they are, in almost every case harming a brand rather than doing any good.

There are many different reasons as to why small business owner have a huge advantage right now and Insta-boutiques run by Millenials are becoming serious competition for huge brands. 

The following visualization portrays even further indicators as to why we are moving towards digital when it comes to  spending money and trusting brands.

To keep up with the pace, brands must have a clear grasp on what’s trending, what’s resonating with their customers, and current colors, patterns and designs. Just must in a way track the runways on Instagram, and forecast trends on Instagram. 

There is plenty more to learn and understand regarding this topic, like how the media revolution and social media shift has an effect on politics, but that is a different story and will be shared in a future episode! 

So stay tuned for that. What are your thoughts on Social Media Boutiques taking over the Retail Industry?

Much love,

- Mrs.Steemit