Just a few weeks ago, Diageo acquired Aviation Gin for $610M.
Aviation Gin was founded in 2006, and had already achieved some level of success, having sold to distributor Davos Brands in 2016.
Then actor Ryan Reynolds bought a stake in the company in 2018, and became a co-founder.
In the subsequent two years, the product has grown to become the second-largest product in the super premium gin category.
Reynolds helped growth the brand by leveraging his platform, and sharing timely and humorous spots like this (poking fun at the ridiculed Peloton holiday ad of 2019)
Reynolds leveraged his fame as a distribution channel to build awareness for the brand. He spent his career building attention, and an audience, as a Hollywood star. By channeling that attention towards Aviation Gin, he helped catapult the brand to be the second-largest product in the super premium gin category.
This underscores a shift in ecommerce (and retail in general): brands are becoming media companies, and vice versa.
The convergence of brands and media companies is noted as one of the significant shifts in retail, noted by Web Smith:
It’s that last line that’s the money line: “And top brands are skilled publishers; publishers will be top brands.”
But we all can’t be Deadpool…
Sure, the Hollywood fame of Reynolds is not realistic for all of us.
But building an audience is accessible to all–both brands and individuals.
In the ecommerce world, Glossier is the prime example: build an audience, attract attention, and then a build a business around the audience.
Originating from a fashion blog in 2010, Glossier founder Emily Weiss wrote about the beauty routines of influencers and celebrities. She parlayed the success of the blog, Into The Gloss, and its readership into selling products.
Glossier is now valued at $1.2BN.
Nathan Barry writes a great piece that analyzes how brands are built from audiences in a similar way to Glossier.
He breaks down the process into four rules, two of which are:
- Build More Than A Personal Brand – Building personal brands are an ideal launching pad, but in order to achieve massive scale, the personal brand and the product brand must have separation. For example, Jessica Alba was a household name when she started The Honest Company, but used her platform to grow the product, and not her personal brand.
- Sell Products, Not Attention – Attention has value, one that can be quantified in dollars. Instead of getting paid to promote someone else’s product, why not sell your own product and capture all produce revenue and brand value?“Compound interest is the most powerful force on earth. Build a product and brand that can experience compound growth. Then work on it for a really long time,“ Barry writes.
The main takeaway is this: get good at building (and scaling) an audience.
It is the audience, and the community that comes of it, that will differentiate the ecommerce brands in the future. Audiences are built on the content that the brand creates.
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BuiltIn | THE DTC PARTY’S OVER. WHAT HAPPENS NEXT?
This article highlights some of the larger dynamics at play in ecommerce, and reinforces why building audiences and attention are critical.
TL;DR: the historical DTC go-to-market strategy (heavy reliance on paid social channels like Facebook and Instagram while acquiring market share profitable) are no longer viable. The market has become overly competitive (easier to launch products and companies), increased acquisition costs, and reduced profits. This lead to over-spending on marketing to acquire an unprofitable customer. Not sustainable. “One way brands are determined to make up for this is, naturally, by lowering their paid advertising budgets and looking for free or low-cost ways to get their names out there.”
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Speaking of finding ways to profitably grow ecommerce brands….
An (un)Common Holiday: Free Access to The Paid-Membership Community
I have learned a ton about ecommerce marketing from the team at Common Thread Co, and they are opening their doors to their paid community through 9/24. I have no affiliation, but appreciate any opportunities to learn from experienced practitioners, so this can be a game-changer in preparation for Black Friday/Cyber Monday. You can sign up here.