The importance of brand building is a consistently popular topic for entrepreneurs. But when we take a closer look at what gives company marks their value, it becomes clear that online brands will ...
Josh Leichtung's insight:
Josh Leichtung's Response:
First, there is no such thing as a miracle website! Expectation that a website can create a brand without unique products, excellent customer service, and superior branding/marketing is absurd. The luxury brands you mentioned didn't create their brand without customer service. No business can without customer service, online or off. There goes your Zappos argument.
The way you speak about brands, you'd think that if it isn't upscale, it isn't a brand. I also disagree with that concept, and disagree that online brands can't have lasting value. Certainly Amazon has created a trust amongst its customers so that many people merely go to Amazon to find the best at the lowest price.
However, we DO agree on some things. The VAST MAJORITY (98%) of online brands are ephemeral. I have been saying for 20 years that the biggest issue with ecommerce is that the lack of merchandising and branding differentiation leads to commoditization, and therefore reduces loyalty and customer lifetime value. This is just plain fact.
Interestingly, over the past few years we've seen a surge of businesses that are actually branding and selling their merchandise selection as a differentiating factor. These are true brands that scour the world and web for truly unique products. These companies must maintain this differentiating competitive advantage if they are to survive.
Unfortunately, many of these online businesses do not make enough margin to sustain themselves. Hybrid catalog/ecommerce companies have a more reliable formula for the long term and profitability.