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Realising the power of a sustainable brand

Sustainable brand

The discussion about e-commerce aggregators, roll-up companies and brand builders, over the past year has veered widely from the billions being raised by the sector and invested to buy out lucky online sellers, to more cautionary tales about acquisitions being put on hold or the inability to grow these newly acquired brands.  

Let’s put this down to market immaturity. Any company working in this sector and worth its salt knows that this is a long game and we’re still in the early stages. It’s also important to differentiate between a roll up strategy, which relies on scale to bring efficiencies and profit arbitrage, and a brand building strategy through which additional value is realised not just from the acquired profit from purchasing a small seller, but by adding extra channels and investing in the creation of brand equity. 

For all of us, however, the main purpose of acquiring an online seller is to absorb the goodwill they have built up, the customers they have nurtured, and their great product, and turn it into a brand for the future. That requires commitment, hard work, expertise in consumer acquisition and retention and a good pinch of marketing know-how. It doesn’t happen overnight.

It also helps if you can differentiate yourself from the competition in what is an incredibly crowded online market. Amazon alone sells over 12 million products, and if those sold by third-party sellers are also considered, that rises to a massive 353 million products. Meanwhile, Facebook Shops, which allows small businesses to present catalogues of their products as an online store has an average of one million monthly global users and around 250 million active stores. 

For smaller brands, which are typically the kind being bought out, a unique selling point is important, but to build a new consumer brand that will have longevity requires it to be well differentiated in the market. This is why we, as a brand builder, look for lovable brands, products that can form a deeper emotional connection with the customer and it’s something few have. 

Consumers favour ethical brands

One route to differentiation is by focusing only on products that have sustainability at their core. Research indicates that more than two-thirds of consumers consider sustainability when they are making a purchase and they are willing to pay more for sustainable products. Our view is that consumers are increasingly dismissing products that they consider to be harmful to the environment in favour of brands that are known to take an ethical stance and can back up their claims.

There are multiple reasons why this approach works over and above the core environmental issue. Long term customer relationships stand or fall on the consumer’s loyalty to the brand. This is so often nurtured through the sharing of important values, where both parties feel they are engaged in a common endeavour. 

Attitudes to profit have also changed as Millennials have moved into the workplace. Money is no longer the most important factor and as the climate crisis deepens, so organisations are expected to step up and play a key role in transforming the world we live in. The more sustainable a brand is and the more disruptive its actions to bring about change, the more it will find favour with consumers. 

This has been a guiding light for us when considering which e-commerce sellers we should purchase, and it should also inform other brand builders for the greater good. A successful brand that is already sustainable or has the potential to be sustainable, or delivers ways to minimise or offset its environmental impact is powerful and future-proof. We recently acquired case4life and Vetwell, two brands that have great potential be deliver a sustainable product in the long term.

Don’t get me wrong, we are committed to the long-term profitability and growth of the brands we buy, but our path is delivering all the benefits of economic expansion and consumption such as wealth creation and lifting people out of poverty, without impacting negatively on the planet. 

A sustainable lifestyle brand

What constitutes a sustainable brand? NothingFishy is a great example. A new acquisition for us, NothingFishy bypasses fish and sources Omega 3 directly from algae allowing vegan or eco-conscious consumers to benefit from the purest form of Omega 3 without harming any fish or oceanic ecosystems. The supplements arrive in a recycled glass vial and 100% of the packaging is reusable, recyclable or compostable including the refill service which fits through the letterbox. 

The brand combines a lifestyle component with sustainable values and before we got involved it sold very successfully online through word of mouth and social media marketing. However, it will do even better boosted by multichannel marketing and product development expertise and this will benefit potentially thousands of new customers across the world. 

While it is certainly a strong differentiator, committing to sustainable brands is not the easy option. It is a considerable responsibility to ensure that the products meet ethical and environmental guidelines and that the brand cannot be found wanting in any way. But the process of setting a high bar and being transparent and accountable means that there is nowhere to hide. 

For all the buzz in the e-commerce sector about the role being played by rollups and brand builders, there is no doubt that they have the power to elevate brands through a digital-first approach and many of these brands will have a positive environmental impact. We foresee an era of more loveable brands that are both sustainable and profitable, and while right now we consider sustainability to be an important differentiator, before too long it will be table stakes for most brands, and that is something we should all welcome. 

By Ben Fletcher, CEO and co-founder, The Mothership

Scurri