Brands find unexpected opportunities to reach next-gen customers
Photo: Ministry of Supply

Brands find unexpected opportunities to reach next-gen customers

Recent start-ups are connecting with Millennials and Gen Z in ways that might shock and impress traditional chain store owners. The ability to adapt to trends before one’s competitors is increasingly important. For some brands, this means catering to Gen Z and Millennials’ obsession with supersize eyelashes; for some others, it means collaborating with NASA on formal work attire that customers can also wear to run marathons.

Boise, Idaho-based family business, Red Aspen, focuses on selling faux mink and silk lashes. Their mantra encourages women to “Stand Up, Stand Out and Stand Together by Uniting Passion with Purpose” and each set of false lashes sold by Red Aspen is named after a woman that inspired the company’s founders. The lashes are sold through social selling techniques reminiscent of Avon or Mary Kay, with brand ambassadors earning 25 to 35 percent of each sale as take-home commission.

If you’re wondering whether such a niche business idea could make a decent profit, the answer is yes. Red Aspen made $1 million in sales within five months of opening and is now expanding into other types of cosmetics with the goal of launching one new beauty product a month in the coming year.

On the opposite end of the innovation spectrum, Ministry of Supply collaborated with scientists from MIT and NASA to give its next generation customers the wearable technology they demand. The company started with a “radically engineered” performance dress shirt, which they have since expanded to an entire capsule wardrobe, including a tailored work coat, a blazer and dress pants.

What’s so special about the 4-piece workwear set that Ministry of Supply is calling the “Kinetic Collection”? The pieces are cut from breathable stretch knit fabric that wicks away moisture to prevent customers from getting sweaty throughout the day. Additionally, the coat is completely water-resistant and will hold up to the elements, such as light rain or a spilled drink. To bring the point home about the durability of his products, the company’s cofounder once ran a half-marathon in one of the suits.

These two companies are prime examples of the fact that retailers can find success in today’s competitive market, but that to do so they must do the necessary research to gain an detailed understanding of their target market.

BrainTrust

"I think in retail, large brands don’t play the role of finding new trends. I think they take micro or niche trends and bring them mainstream."

Phil Chang

Podcast Host, Retail Influencer, Fractional CMO


"Although these niche brands have addressed generational trends, they still need to scale their concept to make it sustainable."

Joy Chen

Chairman & CEO, H2O+Beauty


"Millennials/Gen Z have clearly shown they’re less about the features of the product itself than the story."

Christopher Jordan

Chief Business Officer, Hubba


Discussion Questions

DISCUSSION QUESTIONS: How prepared are large brands and retailers to identify generational trends? What do you take from the experiences of Red Aspen and Ministry of Supply? Are there other niche brands you can point to that have made an impact by cornering an unspoken generational trend?

Poll

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Max Goldberg
5 years ago

The question should be how quickly large brands can capitalize on generational trends. Large companies are typically slow to adapt to market trends. It’s easier for them to buy small, entrepreneurial competitors than to develop products in-house. Red Aspen and Ministry of Supply are hot now, but will they last? Large companies can buy, use and then grow with or discard smaller competitors. In turn, they can offer smaller companies instant distribution and bankroll marketing efforts.

Phil Chang
Member
5 years ago

I think in retail, large brands don’t play the role of finding new trends. I think they take micro or niche trends and bring them mainstream. The truth is, finding a trend, creating, sourcing and building a product for big brands involves a lot of people, moving pieces and structure. Big brands need to work on identifying micro trends that they can turn into a mainstream trend.

Two brands that have done this — Limecrime (now moved to mainstream) started their business on Instagram, and Allbirds is the other one.

Ricardo Belmar
Active Member
5 years ago

This exemplifies the notion of finding a niche with pent-up demand for something unique and catering to it! These startups are mastering the art of intrigue and desire with younger audiences in a way that large brands simply can’t move quickly enough to satisfy.

The risk, of course, is that those large brands wake up and decide to compete with similar merchandise. This practice sometimes works for them, but doesn’t take into account the new type of loyalty expressed by younger generations — which don’t always hold any loyalty to larger brands. With today’s social selling capabilities, there will continue to be many ways for startup brands like these to succeed, right under the noses of larger brands!

Lyle Bunn (Ph.D. Hon)
Lyle Bunn (Ph.D. Hon)
5 years ago

Brands and retail have the opportunity to bring new products and consuming experiences not just to new generations of consumers, but those for whom retail has become stale. This generational trend could mark a move into better levels of retail appeal. Work wear, sporting goods, housewares and entertaining (food/beverage) offer opportunities for curated bundles of coordinate goods that make shopping easy and improve usage outcomes.

Bob Amster
Trusted Member
5 years ago

This points to a generational gap. The new brands, launched by a younger set of entrepreneurs than existing, larger, more traditional retailers and brands are more in tune with the Millennials and Gen-X members and more likely to understand (feel) how to reach them.

Joy Chen
Joy Chen
5 years ago

Although these niche brands have addressed generational trends, they still need to scale their concept to make it sustainable. Large brands and retailers definitely have the resources to identify the trends, their issue will be how to cultivate a niche idea in an entrepreneurial way. The best alternative for these big brands is for them to acquire or collaborate with niche brands that have scaled successfully.

Michael La Kier
Member
5 years ago

This reminds me of one of my favorite quotes, “There Are Riches in Niches.” Brands who want to be all things to everyone are destined to fail. It’s like that old SNL skit where Dan Ackroyd is selling a product as a floor cleaner and a dessert topping … totally unappealing (except, perhaps, to the company selling the product).

David Weinand
Active Member
5 years ago

Large brands are really not well structured to identify generational trends but what is happening is that they are realizing it and setting in motion processes to better react to them. Lowe’s realized that they could not stay on top of the explosive growth in connected home devices so what did they do? They partnered with b8ta and let them do the curation of product. Walmart’s acquisitions of Bonobos, MooseJaw, etc. provide the same types of insight. These are smart moves that enable large companies to gain insights into key trends shaping the industry.

Ralph Jacobson
Member
5 years ago

Knowing that more than 100,000 new products are introduced every year with far less than 5% of those surviving beyond two years, I believe that there is a huge gap in true innovation around the world. Those really insightful products and services that do survive come from both large and small brands.

The examples in this article are great and I can think of others that find those gaps in innovation and capitalized upon them. These gaps can be filled by new low-cost entrants, simplification of the product solution, better quality entrants, etc. These is still huge opportunity for brands to take advantage.

Christopher Jordan
Christopher Jordan
5 years ago

I don’t see the success of brands like Red Aspen being as much about market trends as it is about having a genuine story and shared values with the consumer.

The difference between being on-trend vs. having true shared values is nuanced, but it’s something that Millennials and Gen Z have a radar for. Jumping into the fray hasn’t typically been successful for (particularly) big brands, as short of making an acquisition, they simply can’t manufacture a back story. As a result, the sell becomes about the widget — Millennials/Gen Z have clearly shown they’re less about the features of the product itself than the story.

Lee Kent
Lee Kent
Member
5 years ago

There will always be new trends coming and going; the question is where do large brands stand? We are seeing a lot of store-within-store in large brands these days and I think that is a good thing. This is a great way for small small to hit mainstream faster and easier, not to mention with a lot less cost. This seems like a win win for my 2 cents.

Dave Nixon
5 years ago

Our experience has been large brands CAN find generalized trends (we work with 5 of the top 6 retailers in the world for data and analytics), but they are not nimble enough to capitalize on them as startups are with a fast response, because they have to do this at scale. If they tried to invest and deploy solutions for every trend, they would be years and millions behind maintaining their current inventory that pays the bills. Large brands have a piece of their strategy for partnering with these types of niche players more often as a way of bringing new shoppers and diversity to their product portfolio.

Andrew Blatherwick
Member
5 years ago

The retail world is moving ever faster with innovations coming from both online and new niche brands. Large retailers are finding it tough to keep up with the speed of change. Why? Because they have too much invested in running efficient operations with no vision and because the risk is too high if they get it wrong.

The cost of retail space is falling as more space is empty. Unfortunately, that has not yet translated into the cost of space in malls and high streets. Once it does there will be more and more innovative startups.

Millennials do not like corporate business and large retail to them is just that dumb fat and happy. They want their own generation of how to shop and what to buy that was not dictated by their parents and past generations. That generation also has a belief of entitlement, they can research and communicate far easier than ever before which increases their expectation and demand for fulfillment. Today’s retailers are going to have work very hard if they wish to stay relevant. If not, then we could see smaller faster more agile business start to take the shine off their business.

Georganne Bender
Noble Member
5 years ago

Cool things always come from indies first, and sadly many of them grow up to be big brands that try and stay connected to customers with varied results. How prepared are large brands and retailers to identify generational trends? I’d say it’s hit or miss. Mostly miss. In traditional stores older generations feel invisible, and ironically, younger customers feel the same.

My daughter is a Millennial who always looks first to independent businesses for her family needs. It’s important for her to connect with a company’s values, and it’s even better if they are part of her community. Friends in her circle seem to as well. They find unique items generally through word of mouth and by the time similar items hit the mall stores they’re already off to whatever is next.

It’s a challenge to keep up with changing consumers of any age. Traditional retailers seem to find their grooves and stay there.