Is the craft brand trend healthy for big retailers and manufacturers?
Ben Zifkin, founder of Hubba.com, a portal for retail and brand execs to connect and exchange product information, said in an interview with RetailWire that as technology has gotten cheaper, better, and easier, the future for craft brands has never been better. (Mr. Zifkin is also author of “The Rise of the Craft Brand.”) And, he said, with the rise of craft brands, retailers are better able to differentiate their experience and value instead of just selling the same SKU’s as everyone else.
Mr. Zifkin says that many large retailers are trying out more experimental brands and categories in order to distinguish themselves, which is contributing to the exponential growth of craft brands. Mass marketers no longer worry just about price and value, but also product attributes, experience, ingredients, uniqueness, an authentic product story, etc. Millennials, in particular, care more about these things, and those even younger do too, so the consumer base for products with unique stories and/or unusual features is growing rapidly.
It is easier for craft brands to develop in some categories than others, says Mr. Zifkin, such as categories that require lots of capital to enter and those that are heavily regulated. He points to Airbnb, Uber, Hampton Creek (makers of Just Mayo), GoPro, and craft soda companies as examples of one-time startups that have grown rapidly and even become leaders in their categories.
For retailers, he says the power has shifted to brands, but that many brand manufacturers have not been able to keep pace as they are not nimble enough. So, while they are still innovating and creating innovation centers, a major path to growth is the acquisition of craft brands so that they in essence become holding companies.
Hubba.com serves as kind of a LinkedIn for retailers and brands, where retailers can search for recommendations on nearly a million products based on their profiles and interests, while brands can connect with retailers and pay to have their brands get more exposure. This enables retailers to carry unique brands and items that they might otherwise have never heard of.
Finally, Mr. Zifkin notes that many large retailers are shifting from craft brands occupying about 10 percent of their physical space to as much as 30 percent going forward. And of course with Amazon and Walmart’s marketplaces and others, there truly is an “endless aisle” of availability for consumers.
- The Rise of the Craft Brand: Why Small is Going to Be huge – Amazon.com
- From philosophy student to tech entrepreneur: Lessons from Ben Zifkin – IT World Canada
- We Are Entering a Renaissance Period For Brands – Huffington Post Canada
DISCUSSION QUESTIONS: Do you see the rise of craft brands as a positive for mainstream retailers? How do you see the craft brand trend affecting the future of large consumer products companies?