#5 What is “Digital Brand”? (Part 2)

Three main elements of the “digital brand” platform.

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How you remember from the first article, there are three main criteria differentiating a “digital” brand from a “loyalty” brand in CPG (Recap of Part 1):

☝️ Criteria #1 - Social proof: famous brand name will get lower sales on the marketplace than a private label with better ratings and reviews.

☝️ Criteria #2 - “Virtual Client”: converting each product buyer into an online product follower, maintaining a mutual collaboration based on three value sources: time, content, money.  

☝️Criteria #3 - Talk to a consumer at a personal level: define, create, and deliver the unique value behind the physical product's properties. 

Want to learn more or refresh your mind with details? - follow the link and re-read Part 1. 

https://www.productdnalab.com/blog/what-is-digital-brand

Keep reading if you want to learn more on how digital eCommerce brands can improve communication with a client, creating a strongly connected platform of relevant tools.

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Part 2: Three main elements of the “digital brand” platform. 

❓ What are the essential elements of the digital brand platform? 

There are three main components responsible for contributing to “social proof,” converting buyers to “virtual clients,” generating extra “unique value” with each client online, and finally bringing a digital brand to success: Product, System, Infomercial. 

Let’s have a closer look at each element. Along the way, I will take a few examples from the real big marketplace to see how successful eCommerce brands already implement these elements. 

👉 Product.

This is the first element of the platform. Without an excellent and relevant product, all other efforts do not make sense. Right product means three things: 

➡️ profitable for the business - give money to invest in other elements. 

➡️ Desired by consumers - deliver all commitments to the target client to get high ratings on the marketplace. 

➡️ Competitive quality - deliver all basic expectations for the category to get a minimum % of negative reviews on the marketplace.

And later…

➡️ Flexible sourcing - ability to quickly satisfy growing sales volume for existing products and extensions. For many brands today, it means blending internal factory resources and contract facilities in the relevant proportion. 

➡️ Help brand converting buyers to “virtual clients” - use product as a link to internet platforms, enhancing clients’ transition from the physical world to virtual. 

Finally, product is a crucial element to enable “social proof”: consumers have to confirm the product is great. Let’s have a look at a few products in the most booming category on Amazon - food supplements: 

No doubt that two out of three products - Orgain and Vital Proteins - are good, buyers love them (based on BSR, ratings, and reviews).

Solimo (Amazon Private Label) may not be doing so great and have some improvement opportunities. But let’s keep it for the comparison. 

Let’s dig into details even further, and see demand, quality, and profitability criteria (based on Helium 10 data):

What about busines performance?

Vital Proteins and Orgain are category most selling products, with a very low amount of 1 & 2-Star Ratings. This is clear sign of a good qality. Solimo product seems to have some quality inconsistencies (over 10% of 1&2-Star Ratings). All products deliver a consistent margin over 40%.

The key learning here: Amazon is not a place for price competition. Lower price does not always win the quality and added value offered by more expensive competitors.

❗Amazon is a place of value competition.

Let’s see how successful brands realize their potential.

👉 System 

Good-quality data drives a strong digital brand. System solutions must support a great product to collect, analyze and manage product and client-related information. And finally - it enables added value. For the best performance, a minimum required system infrastructure has to address the following needs:

➡️ research trends in consumer demand and sales volume (keyword traffic, reviews, sales analytics, etc.)

➡️ communicate with clients in most relevant channels (marketplace, website, social media like FB or IG, podcasts, etc.)

➡️ collect and analyze client feedback from all sources (marketplace, social media)    

➡️ trigger business decisions on product change and launch extensions  

➡️ organize and manage client reactions and responses to deliver the most relevant sales pitches and content (CRM for emails, followers for social media).  

I do not have an access to evaluate the system infrastructure for the suggested brands. But let’s see what we can get from open sources: 

Based on Helium 10 assessment, Vital Proteins and Orgain have an excellent listings. High scores reflect quality of media content (pictures and videos), written descriptions and bullit-points. Interestingly, Solimo product (“powered“ by Amazon) doesn’t have the best listing in this group…

VP and Orgain built their Amazon stores dedicated to representing the range of protein products and communicating with clients.

Solimo is available in Amazon store as a part of the diverse Solimo products family along with soap, home care, and personal care goods. Solimo store doesn’t have any features for customer engagement.

Advanced omnichannel of Orgain and Vital Proteins include independent selling websites, while Solimo is only an Amazon product. Despite all the robust Amazon data available for Solimo, would it be a limiting factor for the product growth to be present only in one channel?..

The key learning here: detailed technical information from supply chain and sales platform is critical for successful competition, but not enough for building a massive digital brand.

❗Success on Amazon is more than a data competition.

Let’s see the last and the most crucial elements for success in eCommerce.

👉 Informercial

We can fairly say this is the most ambiguous, the most undervalued, but the most necessary element of the “digital brand“ concept. Only the most advanced brands utilize this opportunity in full today.

❓ What "infomercial" is

The name comes from the television era (do you remember these telemarketer TV shows?), but the meaning and content of "infomercial" have changed on the internet. 

Today, infomercial is the way to deliver meaningful and custom value to clients - for free! Here is what brand can do using social media channels (Facebook, Instagram, YouTube, chats, blogs, podcasts, etc.):  

➡️ provide instructions on product use 

➡️ share relevant information in the related area of interest

➡️ showcase best practices from other buyers 

➡️ create a space where clients can communicate on their experience

In most cases, “infomercial” is about education, bringing clarity and extra free value. It plays a vital role in building a community around the product, as another enabler for social proof. 

Orgain and Vital Proteins are doing a great job educating followers on using supplements and related lifestyle while building a mutual value-based connection. Both have created tones of valuable content. There are hundreds of thousands followers on Instagram and other social platforms getting value from collaborating with a brand without even purchasing a product. A community of people is taking value from this cooperation and telling a brand story.

Interestingly Amazon develops a Sulimo powder as an element of a bigger product portfolio, based on robust data and system capabilities. Amazon does not invest in the infomercial, which means they are growing a strong private label rather than a digital brand.

The primary learning is: private labels and digital brands can do an equally great job in product and data management. What makes a difference between them is the ability to engage with customers outside of the marketplace.

❗Digital brands compete providing value to customers outside of the marketplace.

Significant difference in sales sounds like an excellent argument to think of building a digital brand rather than a private label. 

…

But infomercial opens even a more significant opportunity (my favorite one as an agile product developer):

🔥 prototyping, and test & learn for new product concepts/ideas

This is awesome:

❗ Creating an MVP (minimum viable product) is so easy: 

render it, make a description and post it in the brand infomercial channel asking followers for their opinion! 

❗ Feedback will be so quick, relevant, and easy to collect. 

What a great substitution to the traditional consumer research, especially at the early stage of idea validation!   

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In conclusions. 

Building a digital brand is an opportunity available for any interpreter who wants to be successful online. This opportunity is based on the conceptually new way to engage with clients in digital channels: 

✅ DELIVERING REAL VALUE to showcase customer focus to let clients tell your story!

instead of

🚫 TELLING STORIES about a fantastic product to showcase the self-centricity of the brand :)

Success in eCommerce means growing a social proof of the brand, efficient collaboration with clients online, and generating an excessive amount of value. Consistent development of Product, System, and Infomercial creates a necessary business platform for sustainable growth. 

❓ What is the most efficient way of building the core capabilities of the digital brand? 

In my next article, I will share the clear step-by-step roadmap to growing business from product idea to digital brand. Do not forget to sign-up for the newsletter, and let’s stay in touch! 

Cheers! ❤️

Niko