Why brand-building is essential for digital-first brands

In an ever-competitive selling landscape, brands are always looking for new ways to break through and connect with consumers. The sustained expansion of the Indian economy, growing at three times the pace of the EU and US, according to an report by IMP, coupled with a surge in discretionary spending, has created immense opportunities for new consumer categories and brands to emerge and to thrive.

A key driver of this phenomenon has been the rise of digital adoption across India. This has enabled a new class of nimble, cost-effective brands to quickly reach and engage with consumers, leveraging online channels as a launchpad. However, as these digital-first brands (DFBs) seek to sustain their growth trajectories and transition into mainstream brands, a critical element comes into focus: brand-building.

While there is no standard process for brand-building, there are two key stages to it–Define and Engage. DFBs need to Define their reason to exist (brand purpose) and what customers hear about them (brand story). It is critical to establish the brand’s purpose early on and stay true to it, while adapting with the evolution of brand and customers’ needs. The second stage, Engage, is built on consistency of experience and communication. There are two distinct approaches when it comes to Engage–‘brand build sales’ or ‘sales build brand’.

Brand build sales

Some DFBs opt for the ‘brand builds sales’ path that uses brand-building to drive long-term success. Thousands of products can exist within a single product category. As customers contemplate what to purchase, the brand is a powerful factor in their choice, even more so, if competing products appear to offer similar features or benefits. A brand with a strong reputation can sway consumers, simply by being the most recognizable and trusted name. This can be achieved by following a balanced approach towards brand-building and performance marketing early on.

Take jewelry brand Giva as an example. From its inception in 2019, Giva focused on its website and online stores. It invested in brand-building through digital video ads and celebrity endorsement. Later, in 2022, Giva expanded to offline stores and used out-of-home (OOH) advertising to reach regional audiences to drive significant footfall to physical stores. The strategic choice of building an online brand first, enabled Giva to expand sales which made it into an Rs 200 crore company.

Sales build brand

In contrast, some brands have also scaled up by increasing their sales rapidly first and later investing in in brand-building. This strategy works well when a brand has a strong product, which when combined with performance marketing enables it to achieve near to mid-term sales objectives. Here, winning each sale touchpoint is important to help build a brand over time. This approach allows brands to increase sales fast and then invest in brand-building at a later stage to build brand pull and stickiness. However, providing a smooth experience and clear communication to customers across all touchpoints remains important.

For instance, premium mattress brand, The Sleep Company, established a successful company on back of strong and consistent strategic choices, and single-minded focus on growth. Started in 2019, the brand started with a parallel launch across online stores and Direct-to-Consumers (D2C), and eventually expanded to offline stores in 2022. Strong focus on performance marketing combined with sporadic brand-building activities (with a focus on yielding sales), along with a concentrated effort on product differentiation, helped the brand achieve significant scale.

Four-stage approach to successful brand-building

No two DFBs are the same, and neither is their path to growth. However, our own study of DFBs show that at each stage, brands can connect and engage with audiences using different ad solutions and scale up further.

Product-market fit: In the beginning, the brand has to focus on building and iterating products to meet customer needs. At this stage, DFBs have to establish efficient online sales channels via online stores and engage in-category audiences. Sponsored Products is an efficient way to reach wide online store audiences by improving brand visibility and directly taking shoppers to the product details page.

Sustainable niche: As DFBs scale up, they aim to build a strong connection with their loyal customer base. At this stage, they find their “hero product” and look to establish a successful niche. Using Sponsored Display, Sponsored Brands and Brand Store/Follow, DFBs are able to build a direct-to-consumer channel along with online stores by remarketing.

Product innovator: This is when DFBs expand their addressable audience by understanding the customer needs and behavior. They ensure presence across digital sales touchpoints including Display Ads. Brands can reach relevant audiences with video advertising and brand ambassadors or influencers via Amazon Live.

Mainstream brand: As a DFB becomes a mainstream brand and category leader, it focuses on consistency and leadership across the product portfolio. Brands can make use of an omnichannel campaign. For instance, using device ads, product placements and brand integrations on miniTV, brands can build an emotional connection with online audiences. Similarly, innovative On-Package Ads can help connect with offline audiences. The brand can then explore global expansion as well.

Embracing the future of digital-first brands

Successful integration of brand-building strategies into growth plans of DFBs will be a critical factor in their long-term success. By embracing the power of brand-building, digitally-native companies can not only drive immediate sales but also build a strong, sustainable competitive advantage in the ever-evolving Indian consumer landscape.

The rise of DFBs represents an exciting chapter in this era of Indian business. By following a structured approach and learning from the successes of trailblazers who have embraced digital opportunity, DFBs can position themselves for long-term growth and cement their place as leading players in their respective industries. And Amazon Ads can act as a partner for DFBs aiming to build a brand among digital-savvy consumers.

(Kapil Sharma is the Director, Growth, Customer Sales for Amazon Ads in India.)