The term microbrand refers to small-scale brands with a geographical or market-specific focus. These brands are only familiar to consumers in particular regions or market niches.
Microbrands typically arise when a company is founded, so they have the character of startups or small companies. Quite often, the driving force behind them is enthusiastic fans of a product/service category or disappointed consumers who want to offer solutions to problems they have experienced firsthand. More and more frequently, this dynamic brand form is also used successfully by large enterprises.
What are the advantages of microbrands?
Although microbrands are generally found in all industries, they are most frequently found in the watch market; they also play a part in the beauty, luggage, and fashion industries. Examples of brands that can until now — or at least during their starting phases — be called microbrands are: Code41, Tommy John, Allbirds, Glossier, Horizn Studios, Gogoro or On Running.
Microbrands as unknown players face the challenge of persevering against large, established brands in the market and gaining the as yet non-existent trust of consumers.
Their success factors are, for instance, digital business models and a consistent "direct to consumer approach". This can create a new kind of customer relationship. In addition, the specialization on a few central peak performances helps to build the necessary credibility in the market. Thanks to their small size and clear focus, microbrands are able to consistently manage all brand touchpoints and compel customers with a uniform customer experience.
Current market developments are creating an attractive environment for microbrands: In a world where more and more people look for the unique and individual, microbrands offer a refreshing alternative to global megabrands you can get on every street corner. Also, small brands can communicate an attitude of authenticity, serious social added benefit, or an honest passion for the product to their customers much more credibly.
The slim cost structure of microbrands is another advantage. Performances can be offered at attractive conditions. This gives consumers the feeling that they are being treated fairly. However, from a brand-strategic viewpoint, microbrands should take great care to differentiate themselves not only through their pricing and thereby become interchangeable. Only unique performances will remain attractive in the long term.