Skip to content

Use challenger e-Commerce thinking to hunt for new ideas

Silhouette of a wolf standing on a hillside at night

Share This Post

Why read this? : We explore how challenger thinking works in e-Commerce. Learn how to make your brand stand out online and give yourself a more competitive edge. Read this to learn how to be a challenger e-Commerce brand.

Challenger brand thinking was originally championed by Adam Morgan’s Eating the Big Fish.

Its core idea is that if you can’t outspend the market leader, you need to outthink them. It suggests 8 different principles for doing that, from challenging category assumptions to being a thought leader. 

These principles are often used in marketing planning to refine customer benefits and sharpen brand positioning

However, they’re also a great fit for e-Commerce planning, especially if you run your own online store. Direct-to-Consumer (D2C) stores have to take on bigger brands in competitively challenging markets. A challenger e-Commerce approach helps you build a differentiated or niche competitive strategy. It helps smaller brands identify where to focus their efforts to give their brands more oomph online. 

The challenger mindset

All brands who aren’t the market leader can be challengers. Market leaders usually focus on price and a cost leadership competitive strategy. They use their scale and advertise heavily to pull in and retain customers. 

However, spending more doesn’t guarantee success. And going big often means moving more slowly. Taking fewer risks.

This is where the challenger e-Commerce opportunity comes in. 

challenger boxer making his way through a crowd towards a boxing ring

Smaller challenger brands can act faster (especially in decision-making). They also have less historical baggage in the category, so they can be more experimental. They can take more calculated risks. This approach works especially well in D2C as you :- 

Challenge assumptions

The first principle we’ll explore is Naive Intelligence. Here, you analyse a category as if you’re completely new to it. You challenge basic assumptions. 

Categories often evolve into certain ways of working. Existing players do things a certain way because “that’s how they’re done”. Challenger thinking challenges this. 

It’s about looking at “what’s done” and thinking, “What if we did it differently? What if we did it better?”.

Lots of mobile phones from the end of the 1990s and early 2000s

For example, the assumption in mobile phones used to be that they needed a physical keypad. Then along came the iPhone with its touchscreen and pretty soon, it was bye-bye to the keypad-driven likes of Nokia and Blackberry.

Challenge bricks and clicks

In many online categories, bricks and clicks retailers set the assumptions about how things are done. They use the fame and scale of their physical stores’ presence to establish their online presence. For example, Coles and Woolworths in grocery. Dan Murphy’s and Liquorland in alcohol. Myer in fashion.

If you’re a small business, you’d never think to take these players on in the physical world. They’re too big and it would cost you too much to challenge them.

Screengrab of Coles online bottled water page showing 12 different bottled waters to choose from

However, the rules are different online. The playing field is more level. Yes, they’ll have bigger digital media budgets to drive traffic to their stores. However, they can only have one website and one customer experience.  If you can position your website and D2C experience differently, you’re in with a good shout of attracting customers that they can’t go after.

Don’t be an e-Commerce sheep

You also find that many big retailers follow a very specific formula and style online. They research what other retailers offer and end up mimicking each other’s experiences.

As a challenger e-Commerce thinker, you have an opportunity to do something different. To be less of a “sheep” and more of a “wolf”, doing your own thing. 

For example, when planning our first online store (see our case study profit and loss article for more on this), we reviewed competitor bricks and clicks sites.

Four sheep in a field staring directly at the camera

They made order processing difficult, with 16 clicks needed to make a purchase. They were trying to grab more data (not directly related to the purchase) and drive sign-ups to their loyalty programs. 

Our store challenged these assumptions by simplifying the purchase process. We only asked for the minimum order data needed and moved loyalty activity elsewhere. This meant only 4 clicks to buy. This delivered a better shopper experience and an exceptionally low abandoned cart rate.

Overcommit / Sacrifice

This brings us neatly to the next 2 challenger e-Commerce planning ideas. Overcommit and Sacrifice are the yin and yang of strategy-building. 

As Michael Porter, competitive strategy guru put it, “Strategy is about making choices; it’s about deliberately choosing to be different”.

Rather than do everything, the overcommit pillar forces you to choose only a few key elements on which to focus your offer.

Small metal statue of lady of justice holding scales

You decide which parts of the D2C experience matter most to your target audience and work on doing those better than anyone else. That means you sacrifice other activities which don’t support your priorities.

Overcommit and Sacrifice example - Jimmy Brings

A good example is Jimmy Brings, the online alcohol delivery service. 

They overcommit to fast delivery by storing their products in delivery vans around the city.

This challenges the assumption that you store products centrally to then be picked up for delivery. It means they can deliver within 30 minutes of receiving an order, far faster than a bigger player like Dan Murphy’s.

Home page of JimmyBrings showing they can deliver wine, beer and spirits in 30 minutes

However, this also means they sacrifice having a large range of products (as they can only carry best sellers in their vans) and they don’t compete on price. They understand that some customers would rather pay a small premium for fast delivery than wait a few days for more choice or to save a few bucks.

When you overcommit and sacrifice

This part of challenger thinking is most useful as you build your e-Commerce positioning.

Choosing a differentiated or niche position forces you to go tighter on your target audience and benefit. You consciously choose NOT to go after some customers and offer some services.

In Jimmy Brings’ case, they chose not to go after customers looking for a wide range of products or low prices, for example.  

Hand holding old fashioned looking compass

The key idea here is to look at what online shoppers want and review what competitors already offer.

If you find a poorly-served customer need, you overcommit to delivering a service that meets that need better than anyone else. Or if you find a part of the experience not adding much value, you sacrifice it to focus your resources on something else that does.

Popular culture

The next challenger thinking principle suggests that successful challenger brands find ways to connect to popular culture. This is about brand building and creatively building your brand identity.

Challenger brands create a stronger mental presence in customers’ minds by linking to or being part of culturally relevant activities. 

Paid endorsements

You can do this overtly by referencing cultural icons in your communications.

For example, Uber Eats use a lot of celebrities in their advertising to create more awareness for their brand and offer. Of course, they have the budget to pay for expensive celebrities. You may not. But there are other options for those with less budget.

For example, many Print on Demand channels license brand rights so that you can design T-shirts and merchandise as “fan art”.

Mobile phone on a table wth Netflix logo showing

Redbubble, for example, allows fan art based on such varied popular culture icons as Star Trek, Kiss and Borderlands. They even have a whole section devoted to all things Netflix.

Pop culture comments and references

Even if you don’t have the budget to directly use pop culture icons and designs, you can still indirectly comment on and reference them. 

You should take care you don’t break copyright laws or imply an official endorsement when you do this.

Generally, that means you can’t take someone else’s work and pass it off as your own. And you can’t make money by selling someone else’s creative work without their permission.

Lego figures of Two Face and Joker with a background of an explosion

What you can do though is join the conversation about any popular culture work that’s in the public domain. Generally, as long as you’re not making money from it, there’s not much risk of getting into copyright trouble. (However, always check with an expert if you’re unsure). The copyright owner wants you to talk about their property (as it’s free publicity for them). They just don’t want you to make money from it. 

For example, our recent business villains article shared examples of story “villains” people would recognise. So, we referenced the Penguin and Two-Face from Batman as those names are in the public domain. But we didn’t use them in a story or imply that we had any connection to DC Comics. We didn’t make any money from talking about them. They were just examples to highlight our point.

This is also common on social media where you can talk about or comment on cultural stories relevant to your audience. For example, when you comment on new movies, books or games, you’re telling customers that your brand is “in” to those. If your customers feel the same way, it creates more of a connection via your shared interest. 

Lighthouse identity / Symbols

The next two challenger brand principles deal with how you show customers your challenger offer. First, you create a lighthouse identity for your brand which shines out so customers can find you. Then you create symbols to bring that identity to life. 

This starts as you build your brand identity and comes out in :- 

The word HOW written out images of a lighthouse for each letter

Challenger brands take the assumptions they’ve challenged, the overcommitments and sacrifices they’ve made and their links to popular culture and bake those into their identity and their marketing communications. They play these out in symbols they use at every step of their customer experience

Lighthouse identity and Symbols  example - Amazon

Amazon are a good example of this.

In its early years, Amazon was probably the key challenger e-Commerce brand to follow. They used many of the principles we’ve already covered. 

For example, they challenged the traditional retail model in many categories. This caused many bookstores, record stores and department stores to adapt their offer or go out of business. 

Two amazon boxes made to look like people with arms legs and faces holding two large heart symbols

They overcommitted to the breadth and depth of their product range and the simplicity of the buying experience. But this meant they sacrificed having a stylish, design-led website or offering anything other than functional packaging.

This focus on simple functionality over stylish design has become part of their lighthouse identity. It reinforces to customers that ordering from Amazon just “works”. It’s simple. They don’t complicate the process and they don’t spend on unnecessary frills. 

For example, their website isn’t pretty. But it’s easy to navigate and reliable to order from. Their packaging won’t win design awards. But you know where it’s from and it reliably gets products to your doorstep in one piece. These are good examples of brand symbols that reinforce Amazon’s overall lighthouse identity.

Ideas-centred / Thought-leading

The final challenger brand principles of being ideas-centred and thought-leading are more internally focused. They’re about creating a culture where your team can feel confident about challenging.

Being a challenger isn’t for everyone. It suits more creative types. Conversely, critics and coasters don’t fare so well on challenger brands. 

You want to hire people who like to challenge. Create an environment where challenging ideas are positively encouraged. All sorts of ideas.

Diagram with culture written in the centre and eight spokes - people, organisation, values, reward, leadership, environment, standards and policies, systems and resources

Creativity is key to challenger brands. You need leaders who recognise and encourage this behaviour. They need to set up the right values, rewards and systems to allow creative thinking to thrive.

As we said earlier, challengers win by outthinking the big players. That outthinking comes from having more and better ideas and then having the courage to see them through.

Successful challenger e-Commerce stores review every step of their D2C experience and creatively make each step better.

They make it more engaging for customers. They add new experiences, cut ones which don’t work and try out different ideas. 

Successful challenger e-Commerce stores then highlight these ideas in their outbound communications. They share their challenging thoughts with confidence. They’re unafraid to experiment and push boundaries. 

e-commerce planning process - 5 key steps in e-commerce experience

Challenger e-Commerce thought leaders hunt for new ideas. Like a wolf on the prowl, they follow their instincts and set their own path. The sheep who stick with the flock had better look out.

Conclusion - Use challenger e-Commerce thinking to hunt for new ideas

Many people believe that “big is better” in business. They say, if you have the scale and the budget, you can spend your way to success. 

And while it’s true many categories are dominated by big players, big companies don’t always last forever. Challenger brands  can and often do outthink them.

They go faster and bolder doing the activities the big brands are too complacent and fearful to do. 

Silhouette of a wolf standing on a hillside at night

This article took the 8 challenger brand principles outlined in Adam Morgan’s Eating the Big Fish and applied them to e-Commerce.

We showed how strong challenger e-Commerce brands can challenge assumptions and overcommit and sacrifice in terms of their strategy and positioning. How they can link to popular culture, and bring their brands to life creating a lighthouse identity and symbols. And how these are all driven by the internal culture of the business, which makes the challenger brand idea-centric and thought-leading.  

Check out our challenger brand article for more on this. Or get in touch if you feel you need more challenger thinking on your brand. We’re always up for a good challenge.

Photo credits

Wolf Silhouette : Photo by Ray Hennessy on Unsplash 

Entering the ring : Photo by Attentie Attentie on Unsplash

Mobile phones : Photo by Eirik Solheim on Unsplash

Sheep : Photo by Judith Prins on Unsplash

Legal scales : Photo by Tingey Injury Law Firm on Unsplash

Person holding compass : Photo by Aron Visuals on Unsplash

Two-Face and Joker Lego : Photo by Mehdi MeSSrro on Unsplash

Netflix : Photo by Kon Karampelas on Unsplash

Amazon boxes with hearts : Photo by Alexas_Fotos on Unsplash

Share this content

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest blog posts

Subscribe to get Three-Brains updates