If your business includes more than one brand, there are many considerations when building your sales and marketing strategy. But equally important is understanding the pillars of digital commerce in a multi-brand strategy. The best structure for your company depends on many factors: your target audience and your offering, for example. The main brand architectures are Branded House and House of Brands. Let’s begin by distinguishing these two types of multi-brand strategies.
What is a Branded House?
A Branded House is a strategy where more than one company’s products are sold under one name/branding umbrella. This approach is optimal if the master brand/company wants more control over the end product’s production, distribution, and cost. With a Branded House, it’s often beneficial to house all the brands within the same customer experience and potentially on one unified ecommerce platform. A great example of a company doing this is Google, with Google Maps, Google Play and Google Drive.
This approach can drive value creation and increased sales in the right situation. Specifically, the master brand can create added consumer value by distilling the many brand promises down to one, thus allowing the sun-brands to “draft” off the parent or master brand.
What is a House of Brands?
A House of Brands is the opposite of a Branded House in many ways. It’s a strategy where each brand has its own brand identity, often representing a separate demographic, need, or occasion. A House of Brands can include numerous brands, where each brand is independent of the others, often with different target audiences. The GAP is one good example where the name is associated with the parent brand, but sub-brands such as Old Navy, Banana Republic, and Athleta stand on their own.
With a house of brands, there is little emphasis on sharing across different products except for data because each product has its own image that needs to be maintained.
One main benefit of the house of brands approach is the ability to build distinct brand voices to serve and appeal to diverse audiences and capitalize on economies of scale, cross-selling, and association with other brands in the portfolio.
Why brand architecture matters
The success of your multi-brand strategy hinges on a solid brand architecture. Your brand architecture organizes your brands and defines their role in your broader organizational structure. It also serves as a guide for your expansion efforts. Today, multi-brand strategies have evolved to cover the modern consumer’s expectations. Some recent trends in brand architecture include personalization, purpose-driven brands and omnichannel experiences.1
The three pillars of digital commerce in a multi-brand strategy
Whether you opt for a Branded House or a House of Brands approach, it is important to understand the pillars of digital commerce in a multi-brand strategy, as it informs many downstream decisions. The three pillars of commerce, content, and community can be challenging to maintain with just one brand, and multiple brands certainly add complexity. On the other hand, there are also synergies to be had if proper alignment exists. If done right, your brand architecture builds customer trust, fosters stronger emotional connections, and enhances your brand messaging.2 With the rise of increasingly powerful and agile ecommerce platforms, a multi-brand strategy has become an interesting option.
Let’s break down each of these three pillars individually.
Commerce
Align your brand strategy to the appropriate commerce model
Several commerce models are well suited for a multi-brand strategy. For instance, some commerce models work better for mature multi-brand businesses or simply in a later stage of development. These companies can leverage the brand equity (value) that has been built over time and introduce new commerce models such as marketplaces.
Other brand models are better for companies that embrace the notion that once their brand reaches a certain point, becoming a part of a bigger portfolio is necessary to compete. For example, the branded house strategy is more commonly used in professional services. This is partly because brands in this particular vertical tend to have high visibility and a strong reputation. In this case, a simple B2B commerce approach may work best.
Enable your brand strategy with the appropriate platform
As an increasing number of multi-brand businesses explore the various commerce models referenced above, they will no doubt be intrigued by marketplaces and perhaps even explore launching one of their own. This commerce model requires a platform solution that can integrate commerce and marketplace capabilities. Not surprisingly, these platforms are among the fastest-growing ecommerce platforms in the world right now.
Create a customer experience that aligns with your strategy
Deciding to present one single-branded house or opting for “sibling brands” under that house is an important crossroad for multi-brand commerce. This decision will impact every part of your journey moving forward. And as with most significant business decisions, it is essential to do thorough research before launching:
- Do you need to separate your brands?
- Do some of your brands “play better” in specific markets?
- Do you have similar/different customer types?
- What is the role of the brand/sibling brands in the consumer’s life?
- What are the competitive dynamics?
Data answers these questions, allowing you to align the commerce strategy to the customer experience and consider capabilities such as linear commerce, social commerce, livestream commerce, and mobile commerce, to name a few.
Content
Yes, content is still king!
Whether you are building a multi-brand store or a branded house storefront, content is one of the most important factors. A well-designed content strategy will help you establish and maintain a relationship with your audience.
What your content strategy looks like will differ based on the brand strategy you choose. A company that markets as a Branded House is expressing its value proposition in a single, unified voice. In most cases, the corporate name and brand identity is one and the same. While a house of brands’ content strategy requires that each brand have its own identity and “backstory.” Each sub-brand or sibling brand must anchor a place in the portfolio and in the customer’s mind.
No matter the approach, content performance monitoring should be a crucial element of your content strategy. Data and analysis are essential to know what content works best for each of your brands and how your brands differ in that aspect.
Content is critical in ecommerce, where your customers interact with your brand via multiple touchpoints. A solid content strategy requires consistent messaging in all channels for an optimized customer journey that reinforces brand values. Maintaining this consistency throughout the entire digital customer experience is essential.
Strengthen your content strategy with the right platform
Traditional content management systems (CMS) were designed to create web pages. Today, it is important to search out those that are built from the ground up – specifically designed to create omnichannel digital experiences and drive multiple commerce business models in parallel. These agile approaches and more modern tech stacks allow your digital teams to innovate, iterate, and go to market faster. Vaimo’s partner, Contentful, does this by:
- Unifying content so you can edit from a single hub
- Structuring it so you can use it in any digital channel
- Integrating with hundreds of leading-edge tools for translation, segmentation, and ecommerce, amongst other things
Hone your messaging and leverage strong storytelling
Storytelling and ultra-targeted, clear messaging are critical when building a multi-brand strategy. A House of Brands should work as a “front door” of sorts for the sub-brands. Producing custom content to support new product launches and accentuate the differentiators of each brand is vital.
Community
Multi-brand loyalty programs can be challenging to create
Did you know that 59% of consumers tend to be loyal to their brands for their entire lives?3 It goes without saying that customer loyalty should be high on your priority list. However, don’t underestimate the challenge of juggling multiple brands, multiple customer experiences, and portfolio management. This is where data can give a deeper insight. By analyzing your customers’ behavior, preferences and purchases, and therefore understanding them better, it’s easier to spot patterns and identify what makes each of your brands unique.
Virgin Group attempted to develop an umbrella program for its various brand properties some years ago. But the attempt was abandoned because of the complexity of figuring out the value for customers across its multiple airlines, holiday packages, and cruise lines. Their latest attempt, introduced in 2020, is called Virgin Red, a unified loyalty program extending across all Virgin businesses.
Enable customer loyalty with the appropriate platform
Many loyalty platforms can help you run loyalty programs. But when it comes to an experience platform, you should look for one that has both excellent loyalty program management capabilities and powerful engagement modules to allow you seamlessly connect, engage and grow your customer relationships at scale.
Understand your audience to drive growth
All marketing and sales programs begin by understanding your target audience, including your ideal customer persona, their pains, aspirations, and how you can add value to their lives. For a Branded House, understanding each of your audiences is crucial to driving the uniqueness of each brand. This is also important for spotting opportunities for cross-selling. In a House of Brands, this issue of knowing your audience is even more important. You can have many different brands in the portfolio, but if they fail to deliver on their intended targets’ needs, you will not realize the value of this strategy.
Final thoughts
Many factors drive the decision between a Branded House or House of Brands strategy. Yet, regardless of which is chosen, understanding the trifecta of Commerce, Content, and Community is critical to a successful multi-brand business. At Vaimo, we’re presently helping more than 65 multi-brand, multi-currency, multi-language clients optimize their operations. Get in touch with our team of experts to learn how we can help you take your ecommerce business to the next level.
At Vaimo we help brands, retailers, and manufacturers all over the world to drive success in digital commerce. Reach out to us if you want to hear more about how we can improve your customer experience strategy, go to market plan or explore how technology can enable success.
Sources
1 – takechargesolutions.org
2 – mailchimp.com
3 – techreport.com
