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Disruption Insights

Disruption Insights

Insight | Scale

Scale brings challenges to disruptors

It is easy to be disruptive when you’re early in the market because you’re building off a low base and scaling fast. Nobody, other than a few investors, is looking closely at your financials. You may face problems when you reach a certain size, however. Tesla has disrupted the car category and forced other brands to enter the electric car space, for example. But Tesla hasn’t produced much profit. You could argue that Tesla is proceeding somewhat chaotically.

Alex Creed

VP, Client Development

Kantar

Alex.Creed@kantar.com

Insight | Irrelevance

Ignoring change will lead brands to irrelevance

Given the level of disruption we’re seeing, our clients cannot conduct business as usual. The message to clients is best summed up by a quote from four-star US general Eric Shinseki that I’m going to paraphrase: If you don’t like change, you’re going to hate irrelevance. We have enough data points—media impressions, technology’s acceleration of change—to assert that if you’re not sitting uncomfortably, you should be. I’m sure leaders like Jeff Bezos and Elon Musk don’t sit comfortably. They are constantly disrupting themselves. The answer is clear. Our own massive, evidence-based database—BrandZ, shows that the drivers of brand value are purpose, innovation, customer experience, and love.

Erik Overby

VP, Innovation Growth and Strategy

Kantar

Erik.Overby@kantar.com

Insight | Vision

Short-term focus clouds future growth

Companies may start out with a long-term vision. The founders have an original idea and they can see how their business will compete effectively within the current market context. But as they go along that path, they increasingly get drawn into short-term performance and management. Incremental thinking replaces innovation as they worry about making the next quarter’s numbers. Companies become more risk adverse. By the time the company matures—if it gets there—the company doesn’t have the vision for something completely different that will drive it forward to the next 10 years. That’s why it’s the ‘’small company’’ mentality you need in any business or brand to give you a vision of future growth.

Graham Staplehurst

Global Strategy Director

Kantar

Graham.Staplehurst@kantar.com

Insight | Needs

Disruptors can identify shifting needs

Technology firms lead much of the disruption we see across categories. But brands that aren’t heavily digitized can be disruptors, too. They just need to tap into a consumer need. For example, Fever-Tree, the UK producer of drink mixers, has grown because it picked up on the growth in premium gin and supplied a premium mixer. In addition, consumers have changed. They want to embrace innovation.

Helen Rowe

Brand Consultant

Kantar

Helen.Rowe@kantar.com

Insight | Needs

Radical shifts in behavior drive disruption

Disruption, these days, is constant, a product of fundamental shifts in consumer needs. The explosion of alternative proteins in CPG, for example, is being driven by a growing understanding of the impact of producing meat on the environment and the desire to eat more healthily; in fact, 83 percent of Americans say they want to add more plants to their diet. Because of the seismic size of changes like these, companies need to take steps to protect against a future where they don’t exist. The paradox is that when we talk about disruption, we think about small challenger brands, whereas the big fish—the Unilevers and P&Gs, the Krafts and Con Agras—are the ones with the distribution and operating models to be disruptive at scale. But too often that doesn’t happen, invariably because the short-term financials aren’t there. Businesses need to rethink that; to institutionalize disruption and make responsibility for breakthrough innovation part of their core operations, not the underfunded, neglected silo it often seems to be.

James Hidden

Managing Director

Ogilvy

James.Hidden@ogilvy.com

Insight | Technology

Tech enables us to fill needs in new ways

Regardless of the type of disruption, it is important to note that the core needs of the end-users do not change. Technology allows companies to accelerate their ability to provide something that allows us to disrupt within those needs. We need to keep our eyes on technology because new developments can be applied in different ways at a moment’s notice. For example, if you think about the core convenience or accessibility needs—whether it’s avatars for doctors or home delivery for consumers—disruption for those needs are enabled by technology.

Jen Hanson

SVP, Client Leadership

Kantar

Jen.Hanson@kantar.com

Insight | Scale

Big-company disruption is less apparent

Multi-brand companies with a clear purpose, like Unilever, struggle to be seen as disruptors. It’s not that consumers don’t associate the disruption with Unilever, but that they are more likely to associate it primarily with the product brand. It’s the combined perception of all the Unilever brands they come in contact with that forms their perception of Unilever, so the parent brand suffers from dilution due to clutter.

Kristanne Roberts

Global Development Director

Kantar

Kristanne.Roberts@kantar.com

Insight | Needs

Human insights yield effective sales strategies

Best Buy is a good example of a traditional brick and mortar retailer responding to the disruptive power of tech companies, a challenge that brands across categories face. While Best Buy faced and addressed a number of issues and strategically addressed those issues in its rebounding strategy, one of the fundamental issues they needed to address was related to the customer journey. One of the problems for Best Buy was “showrooming.” Consumers came into its stores to see, touch, and smell the products, and then they’d leave to purchase from online retailers because they could find cheaper prices online. Best Buy found a way to keep customers in the store and also match the online prices. Best Buy looked for the human insight—what truth existed about what the customer wanted or needed before the purchase; combined that insight with solutions to address it; and found ways to close the sale in-store. Essentially, Best Buy added more consultation, customer and other services to shift the customer journey and capture the sale.

Kristin Hooper

SVP, Branding and Insights

BCW

Kristin.Hooper@bcw-global.com

Insight | Behavior

Behavioral insights key to disruption

Many leading tech companies, like Google, Microsoft, and Intel are increasing the number of anthropologists on their teams. Anthropologists help shape the future of these companies by uncovering how culture impacts habits, behaviors, and interactions with technology. Currently, we are working with an anthropologist at a global tech company to study how people in different countries interact with money and how they make payments.

Lydia Avramenko

Senior Research Associate

Kantar

Lydia.Avramenko@kantar.com

Insight | Impact

True disruption benefits all consumers

True “disruption” to me is where a new brand or proposition enters a market and impacts or re-defines a particular category in a way that benefits all consumers, whether they are a customer of that particular brand, or not. Jio, the Indian telecom provider, is a good example. At launch, Jio provided free data for the first six months and only then introduced comparatively very modest pricing. Jio immediately built a lot of volume. Customers of market leaders Airtel and Vodafone also felt the benefit of the “Jio effect” as they were forced to drop their data prices to compete and retain customers.

Martin Guerrieria

Global BrandZ Research Director

Kantar

Martin.Guerrieria@kantar.com

Insight | Leadership

Leadership, vision drive real disruption

A lot of disruption depends on who the CEO is and that person’s vision. Disruption depends on someone who sees things differently and has a passion about taking their company down that path. These CEOs are different than most people. This is a commonality across disruptor brands, at least in technology. But how many people like Steve Jobs and Jeff Bezos exist in the world?

Michael Cohen

VP, Client Services

Kantar

Michael.Cohen@kantartns.com

Insight | Scale

Big companies find niche ideas difficult to fund

There’s a huge issue that established companies grapple with, which is that a disruptive idea is never going to seem that profitable to them. With a disruptor brand like Halo Top ice cream, it is very likely that a major multi-brand company had a similar recipe tucked away in an archive someplace. After doing the financials, the company probably decided it wasn’t worth developing the product because, in comparison to all their established brands, it wasn’t. A disruptive idea will never seem like a great opportunity to multi-brand companies because they’re judging it by a far higher standard. Whereas the entrepreneur coming up with the idea sees only upside potential.

Nigel Hollis

Chief Vice President, Chief Global Analyst

Kantar

Nigel.Hollis@kantarmillwardbrown.com

Insight | Spectrum

All categories are susceptible to disruption

Five of the BrandZ Global Top10 brands—Apple, Google, Amazon, Microsoft, and Facebook—are technology giants based on the West Coast. In the past 10 years, they’ve changed how we transact, how we commute, how we buy things, and how we communicate with each other. Every facet of our life has been disrupted. Disruption has become the norm. Every category is susceptible. Look at Ancestry.com, for example, which seems like an entirely new category of DNA testing, although it’s been in existence for a decade. But it’s being disrupted by 23andMe, which adds genetic health and wellness reports. Suddenly, people want to know not only about their ancestry, but also about their health markers. It’s important to look at a category with spectrum to understand what disruption means.

Priti Mehra

Managing Director, San Francisco

Kantar

Priti.Mehra@kantar.com

Insight | Scale

Big companies are capable of disruption