Innovation is tough at the best of times. With the cost-of-living crisis adding extra pressure and driving many consumers to trade down to supermarket own labels, it’s never been more important to get product development right. And there is a new threat for established brands in the form of disruptive innovation from an unlikely source.
The creator economy refers to personality-led, digitally-enabled value creation that arises from an individual monetising their relationship with their audience across diverse media. Or ‘famous people selling stuff to their fans’. But unlike more traditional celebrity endorsement of big-brand products, the creator economy is driven by influencers and content creators who have built audiences independently on social media.
Why is this a threat?
Influencers and content creators who have successfully monetised their audiences via content and merchandising, are now moving into FMCG spaces, with enviable returns. For example, Mr Beast’s Feastables chocolate bars reportedly made over $10 million in revenues in the first few months and YouTubers Logan Paul and KSI made $1.2 billion in sales in year two with their Prime Hydration drinks.
How can brands compete?
This sort of market disruption could be seen as alarming, or dismissed as niche, but I believe that established brands can learn from the creator economy and adopt some of their methods to power up their own innovation in three key ways.
There are three key ways that the creator economy influences the uptake of FMCG products:
1. Intense relationships
Influencers and creators build insane levels of brand desirability through the depth and intensity of their relationships with their audiences. These relationships involve continual two-way communication and interaction, and they know their audiences intimately. In many cases, the audience and the creator have grown up together and followers are deeply invested in the success of the creator, having watched them grow from just a few followers to being a global star. The individual creator or creator team may be talking to millions of people but to the teenage boy in his bedroom, it feels personal.
What can brands do?
This feels fundamentally different from how FMCG brands currently communicate with their audiences. There is an opportunity here for brands to be more creative and focus on comms that create a dialogue, feel personal and bring audiences into a relationship that is fun to be part of. This also requires a razor-sharp focus on exactly who that audience is. Again, there is an opportunity to deep dive into more niche cohorts within the mainstream and really understand what makes them tick.
2. Reimagined product universe
Although there are influencers for all age groups, it’s Gen Z consumers and upcoming Gen Alphas who are spending most time watching online content creators. A recent Gallup poll found that US teens spend an average of almost five hours a day on social media. This means that their opinions and preferences are less likely to be formed from a trip to the supermarket or from mainstream broadcast media but from a curated set of influences that is unique to each of them and relates to their passions and the algorithms. This is again intimate and personal and makes it impossible to figure out a competitor set in the traditional ways by through looking at media consumption.
What can brands do?
Although the media landscape is profoundly different, there are still those moments of truth that are formative in people’s relationships with brands –moments such as leaving home, becoming a parent, entering into a relationship. Think new dad at 4am on a nappy run to the 24-hour supermarket. Brands that understand how those trigger points work can ensure they are visible and building dialogue in a variety of media at those points. Brands should also aspire to build, lifetime relationships by getting into those new product universes early on.
3. Experimentation Culture
Influencers and creators have an inherently disruptive experimental culture, and they make stuff that is fun for them personally, so it automatically resonates with their followers. They act on instinct, testing and learning to see what works and they fail fast. For example, Mr Beast took Beast Burgers from zero to 100M sales and back down to nothing in less than two years. This agility is enabled by the speed and quality of their feedback loops. Because they are in such intense two-way conversations with their audiences, they have a finger on the pulse of what they want, making them incredibly agile.
What can brands do?
Brands need to look at innovation culture in their own organisations and try to emulate some of this agility by, for example, looking to devolve decision making, empowering innovators to be more entrepreneurial and considering more flexible routes to market and smaller scale launch models. It may be that the future of FMCG will be asset light, outsourcing distribution and production in the name of more agile innovation.
Can we all be Mr Beast?
We can’t all be Mr Beast, but established brands can thrive in the creator economy by learning from the best and most successful.
