Fast Brand Culture
International groups like L'Oréal or LVMH own great portfolios of brands, very different from one another. This enables them to have a wide footprint, from casual to luxury, from traditional to innovative, they can make sure they reach every end of the market.
Groups are financial entities, they guarantee abundant resources, efficient logistics, and great distribution opportunities. Becoming part of a group is an incredible boost for brands. Conglomerates such as Shiseido or Kering are great tools for brand development, they can pressure manufacturers, retailers, and competitors, they can literally change a brand's destiny.
As production, retail and marketing became more competitive in the 1990s, independent brands became part of big groups to continue existing and pursue their development.
Today there is a return of independent brands. For almost any industry, technology makes it easier, cheaper and faster to create and develop brands. Thanks to crowdfunding, social media, local manufacturing, e-commerce platforms, start-up incubators... Brands don't need to rely on the group’s capacities anymore because these tools and technologies are accessible. From financing an idea to selling the actual products, it all became faster, cheaper, and easier.
Therefore innovation becomes cheaper too. New and disruptive companies like Uber or Foreo are created everywhere on earth, they spread quickly and they become very serious threats to established companies and even industries.
Paradoxically, it seems there is very little innovation in groups. They have the luxury of time, human and financial resources but they are highly averse to risk. For them, innovation is "outsourced", they snatch innovative independent brands when they grow, but it often costs them dearly. Once acquired they face some challenges, like maintaining the culture of these disruptive start-ups, which might be quite difficult once part of a big group.
Innovation stems from necessity, but conglomerates seem to be too far from the ground to read the needs of the everyday consumers. This is an agile market now, a new era and while independent brands must innovate to exist, groups can look outdated with their efforts to stay relevant. Only time will tell if innovation is relevant or not, but not moving (or moving too slow) is like moving backward.
