What is a challenger brand?
We’re seeing a wave of new, exciting, disruptive innovation with brands and the way they operate, but what is a challenger brand?
Posted on July 18th, 2022 - By James Ewin
In an ever more visually overcrowded world, brands are having to reconsider how they position themselves, as well as how they engage with their customers. With major brands losing significant market share to disruptive challenger brands, we’re seeing a wave of new, exciting, disruptive innovation. So what is a challenger brand?
Being a challenger brand isn't just the way you look, the way you communicate, or even in what you are offering. In fact, it’s primarily a state of mind which affects all of these elements. Challenger brands are brave enough to think differently, challenge the status quo, and dream beyond their means, creating an alternative way of being, whether that's: socially, culturally, environmentally or ethically. Challenger brands are organisations highlighting negative user experiences and solving problems.
It's not all about challenging another brand or competitor. Challenger brands set out to solve cultural issues by innovating new ways to do things. As a result, they are closing the competitive gap, and winning huge sections of the market.
Many new, disruptive challenger brands competing for customer attention are ones with fewer resources, smaller marketing budgets and a smaller reach. These brands are forced to think outside the box with their messaging and marketing strategies. How can a smaller brand compete with some of these larger ones? These brands already have a significant market share, a loyal following and cheaper running costs? The answer is: by being a challenger and finding a problem within the current environment and solving it, or offering a damn attractive alternative!
Think Airbnb. In 2007, founders Brian Chesky and Joe Gebbia, who had recently moved to San Francisco, were unemployed and struggling to cover their rent. When they noticed most of the local hotels were struggling to cater for the influx of visitors due to an Industrial Design conference, they saw an opportunity. They decided to set up a website, buy some airbeds and rent out their floor space for $80 a night. The plan worked, and after hosting their first 3 happy guests, they decided to pursue the idea further. Fast forward a few years, some failed growth opportunities, a progressive, disruptive company rebrand and a refinement of its offering, and Airbnb were now listing property from all over the world.
The company is now valued at well over $25 Billion, making it the largest online marketplace and hospitality service brokerage company. Airbnb was built on a fervent belief that things could be done differently and that customers would welcome an alternative to expensive, inflexible hotel accommodation. Sure, they’ve encountered backlash and tonnes of legal battles along the way, but they have stayed true to what they believed in and have, as a result, ended up pretty much changing global cu
ltural opinion and cultural habits. This is a challenger brand through and through.
Only a few years ago, food delivery offered bland and limited options and was crying out for an alternative solution. Queue Deliveroo. When Deliveroo’s founder and CEO Will Shu moved to London in 2013 he discovered a city full of great restaurants, but he was amazed that so few of them delivered food. He made it his personal mission to bring the best local restaurants direct to people’s doors. By offering fast and reliable delivery that the customer can track on their phone, Deliveroo has seen revenue growth of over 650% year on year.
A huge catalyst to Deliveroo’s success was their disruptive rebrand in 2016, completed by DesignStudio. This new brand cemented Deliveroo as an industry game-changer, a bucker of trends and a brave crusader in changing society’s perception of food delivery.
With such a simplified, memorable mark, a bright, attention-grabbing colour palette, honest food photography, stylised illustrations and a colourful, hyper-reflective work uniform, Deliveroo took the industry by storm and emphasised its disruptive, challenger brand status. It’s a brand that truly reflects its ambitions and has amplified its attitude.
Mexican American spirits brand Casa Lumbre saw an issue with the way brands donate to charity. They didn’t approve of the industry-standard ‘10% with every purchase’ format most brands adopted. They wanted to do better and did so by creating ‘The Community Spirit’. A top-shelf vodka with an unparalleled commitment to serving the community. The brand stayed away from conventional branding, keeping the bottle plain and putting charitable causes at the forefront, focusing on inclusive hyper-local, community-based initiatives instead of the product itself.
The Community Spirit knows that they make a great product, so don’t feel the need to market their vodka. They would rather use their platform and messaging to bring awareness and aid to the social causes they and their community care about. They challenged the industry by flipping what mattered on its head. Instead of the industry standard of 10% social cause and 90% product; they reversed it, focusing on making a statement to the rest of the industry. Brands need to do more and can still be profitable by doing so.
The Community Spirit is a purpose-driven brand and will continue to support its community and their needs for as long as there’s help needed.
There is a common misconception that challenger brands are always start-ups or small underdog brands, or that they are led by young entrepreneurs. Although this is often true, it is simply not always the case. Many established brands have reinvented themselves with a new product, new offering or a new approach, due to adopting a new, challenger mindset. There are many leaders who still profess to adopt a ‘challenger mindset’, even after becoming market leaders, and this is in order to stay at the top in a fast-moving and highly adaptive market. Many markets are changing so rapidly that it is a necessity to continually challenge the status quo, even if it is your own, well-established practices and techniques, in order to stay relevant, engaging and disruptive.
So to sum up
Being a challenger is about disrupting the market, not just through your brand image, but through your approach and your frame of mind. Don’t expect to become a challenger brand unless you are willing to take risks and challenge the status quo. From a rebrand perspective, this means trusting your brand agency to push the boat out and test the limits of what’s achievable. This will in turn set you apart from the competition and reiterate your disruptive attitude to business. Be bold, be brave and be non-conformist.
Looking for a challenger brand specialist?
Here at ORCA, we’re always keen to work with brave, ambitious and disruptive organisations. With huge experience in challenger branding across various sectors, we’re ready for our next challenge. If you’re looking for help with your brand identity or digital strategy, feel free to get in touch!
Thanks for reading.