Brandless’ failure has taught us just how much branding matters.

Brandless, the former DTC darling, has announced it is shutting its doors; a sad fate for its founder and team. We explore if Brandless was actually brand-less, or a poorly built one.

Brandless’ failure has taught us just how much branding matters
Brandless’ failure has taught us just how much branding matters

Who needs a brand, anyway?

Launched in July 2017, Brandless caught the attention of marketers worldwide, with a big f-you to all they held dear, challenging the notion that expensive brand and marketing activity wasn’t needed to be successful and that consumers shouldn’t pay an alleged “brand tax”. And for a while it worked. 

Brandless promised household goods at only $3 each. The company started with food and essentials and expanded into pet, baby products and even CBD—at a higher price point of $9

In July 2019, Brandless received $240 million in a Series C funding from Softbank Vision Fund—the same fund which took over control of WeWork, after its IPO.

In March 2019, after undergoing layoffs, Tina Sharkey, the company’s co-founder and CEO resigned but remained on the board. John Rittenhouse, former COO of Walmart, took on the CEO role in May 2019 but left in December.

Their downfall appears to be an all too common one: failing to scale quickly enough in a business where margins are small. For a marketer and brand builder like myself, this also poses the question: Had the company been built on more than trying to connect with consumers through their wallets, would Brandless still exist? 

Clearly, something about Brandless resonated with consumers. Their Instagram amassed over 500,000 followers in a few short years. At launch, their premise was to compete with Walmart on price, by forgoing brand. But once prices started to hike there was little left for a customer to cling to. Their newly appointed CEO John Rittenhouse ushered in the change, by dumping the brand’s $3 product mission and introducing a slew of more products and extended categories in an attempt to grow average basket size by 100% and enter profitability by 2021.

Our guess? The unit economics of the original business simply didn’t add up and a change was required. Although distinctive, Brandless’ bold decision highlights they failed to see their biggest business problem of all: a fundamental lack of meaningful connection with the customer without their low price point aiding conversions. This is where the bad-brand theory steps in. Brandless wasn’t brand-less, it was a poor judgement call. How can you ever stand out in a costume designed to blend in?

The direct to consumer businesses showing sustained growth are the ones building a meaningful brand from the ground up. They create a deep connection with consumers on multiple layers. They are not a product trend, a gimmick or fancy website. If you think product is enough to differentiate you in the competitive world of DTC, you’ll soon run out of low-hanging fruit and be left to forage the bare branches with a hundred others just like you. 

As the main marketing channels DTC brands use to acquire customers become increasingly expensive, it highlights the importance more than ever of a truly meaningful, long-lasting brand.

What do you think? Was Brandless actually brand-less or just a bad brand?

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