In our series of articles for indie brands, we have explored everything from the sourcing challenges facing start-ups and the financial opportunities presented by crowdfunding to building an authentic, connected brand strategy. So, for indie brands that have successfully taken these steps, and established a loyal customer base – how do you scale up your business for mass-market appeal?
In this article, we investigate the indie brands that have successfully made the leap from niche to mainstream and share insights on how brand owners can transition without damaging brand equity.
A quick look at store shelves reveals the growing power and appeal of indie brands. The days of legacy brands dominating counter space have quickly moved on as drugstores and retailers make room for niche lines. And, while established consumer favourites continue to hold their place in the market, with many looking to acquire the companies that are edging up the popularity ranks, the indies continue to drive the pace for innovation and gain the support of consumers looking for fresh new products, natural formulations and compelling back stories.
And as acquisitions in the market reveal, indie brands are big business. Unilever is among the corporate giants to be keeping a close eye on developments in the sector having acquired Dollar Shave Club in 2016 , popular color cosmetics brand Hourglass in 2017 , and more recently Tatcha in 2019 for an estimated $500 million . The brands join its ever-growing indie beauty label line-up, which includes Dermalogica, Kate Somerville and Ren .
And, Unilever is not alone. Estée Lauder, L’Oréal and Shiseido have all made significant company acquisitions – with Estée Lauder purchasing Becca Cosmetics for $200 million , Too Faced for $1.45 billion , and fragrance brand Kilian for an undisclosed amount. L’Oréal is also getting in on the act, acquiring NYX Cosmetics in 2016 and investing in IT Cosmetics for $1.2 billion , while Shiseido announced the purchase of popular skincare brand, Drunk Elephant in October 2019 for a reported $845 million .
While acquisitions by major market players offer indie brands the resources and support to continue their strategic growth – by category, region and distribution – what if selling your brand is not on the cards?
For independent brands, initial success can sometimes result in a plateau and taking that next step to scale up and grow your business can often be a daunting prospect. So, where do you start?
Staying true to your brand
Indie brands have succeeded in their ability to resonate with consumers – they can offer highly personable services and often deliver an authentic experience that for the most part, legacy brands struggle to achieve. For any indie brand looking to scale up their business, the first step is to reassess your brand objectives. If you’ve met the goals you set prior to your launch, what does success look like now? By carefully evolving your business objectives for the next phase of your brand journey, you can maintain the trust and confidence you’ve gained from consumers while safeguarding your values. This will help you protect your company while focusing on what you want your brand to be as it continues to grow.
Is your brand ready?
And, it’s not just your brand objectives that will need a closer look – reassessing your wider business plan is critical to ensure your brand is ready. Businesses that enjoy rapid success, may not be prepared for the ‘growing pains’ that emerge on the path to success. An honest look at your brand’s strengths, weaknesses, as well as opportunities and threats are a good place to redefine your market position and understand the possible barriers ahead of you. By taking a genuinely pragmatic approach, you can approach the next step knowing the obstacles ahead and preparing for them.
You will also need to consider the resources available to you, from your team and the skills and knowledge needed to achieve your newly defined goals, to your manufacturing, sales and distribution capacity. What about your capital and funding? Are you reinvesting profits back into the business? Are you working with partners who will inject more capital? How will you afford the growing expenses that will go hand-in-hand with your increasing reach?
Learn from those who have gone before
By looking outside of your own business, you can gain important advice from fellow entrepreneurs, while gaining insights from those who are enjoying mass-market success. For example, both Tatcha and Glossier have carved a tenacious path that offers much inspiration for fellow indie entrepreneurs. Glossier’s founder, Emily Weiss, secured more than $10 million to launch the brand, with an additional $76 million raised for brand expansions . While Tatcha, saw founder, Victoria Tsai, sell her car and engagement ring at the same time as working four jobs to get the brand off the ground . The commonalities shared by these brands are a vision, passion and tenacious attitude to drive their businesses to the next level. By looking to the wider market, you can learn from the examples of success, and gain an understanding of the challenges they’ve faced along the way.
Unfortunately, the path for any business cannot be predicted and with all the preparation, reaching that next step in your five-year plan doesn’t always go smoothly. However, by planning and regularly monitoring your business, you can anticipate the things that could go wrong, and be in a better place to take action.
What we do know is that indie brands continue to capture the hearts and purses of consumers around the world, with a multitude of new and niche start-up companies emerging every year. In the US alone, independent brands have recorded high double-digit to triple-digit growth over the past few years – outpacing total market growth . With all eyes on the sector, there is no time like the present to expand your presence and ensure your brand is on the path to long-term success.