Why this idea means business : We explore how challenger thinking works in e-Commerce. Learn key ideas for smarter online selling. Read this to learn how to be a challenger e-Commerce brand.
Challenger brand thinking was made famous by Adam Morgan’s Eating the Big Fish.
Its core idea was that you need to outthink the market leader to compete with them. It proposed 8 principles from reframing category assumptions to being a thought leader.
You can use these to craft more distinctive benefits and positioning in your marketing plan.
However, they also work well with e-Commerce plans, especially if you run your own online store. Direct-to-Consumer (D2C) stores often take on big brands in competitive markets.
A challenger e-Commerce approach helps you build a differentiated or niche competitive strategy. It helps you decide where to focus your efforts to give your brand more online oomph.
The challenger attitude
All brands that 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 attract 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.
Smaller challenger brands can act faster (especially in decision-making). They also have less category baggage, so they can be more experimental. They can take more calculated risks. This works especially well in D2C as you :-
- have more control over the customer journey.
- can easily test different activities.
- get immediate access to data and insights to see what works.
Challenge assumptions
Let’s start with Naive Intelligence. Here, you analyse a category as if you’re totally new to it. You challenge basic assumptions.
Categories often evolve into fixed 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? Is there a better way?”.
For example, it was long assumed mobile phones needed a physical keypad. Then along came the iPhone with its touchscreen which killed off 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 leverage 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.
However, the rules differ online. It’s a more level playing field. 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 can attract 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 do and so 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, we reviewed competitor bricks and clicks sites.
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 loyalty program sign-ups.
We challenged this by simplifying the purchase process. We only asked for the minimum order data needed and moved loyalty activity elsewhere. It took only 4 clicks to buy. This drove a better shopper experience and reduced the 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.
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.
However, this also means they sacrifice having a large range of products (as they can only carry best sellers in their vans). Plus, they don’t compete on price. They understand that some customers would rather pay more 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 actively 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.
The key 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 meeting 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 expensive celebrities in their advertising to build awareness. Of course, they have the budget to pay for this. You probably don’t.
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”.
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
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, the shared interest helps create a sense of connection.
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 :-
- intangible assets like your brand personality and tone of voice.
- tangible assets like your logo, brand photography and the stories you tell about your brand.
Challenger brands bake the assumptions they’ve challenged, the overcommitments and sacrifices they’ve made and their links to popular culture into their identity and their marketing communications. They play these out in symbols they use all through their customer experience.
Lighthouse identity and Symbols example - Amazon
Amazon is a good example of this.
In its early years, Amazon was 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. Many bookstores, record stores and department stores had to adapt their offer or go out of business.
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.
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 highlight these ideas through their communications. They share their challenging thoughts with confidence. They’re unafraid to experiment. To push boundaries.
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 you can spend your way to success if you have the scale and the budget,
And yes, many categories are dominated by big players. But the big guys don’t always survive.
Challenger brands can and often do outthink them.
They go faster and bolder doing what the big brands are too complacent and fearful to do.
This article 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 want to talk about challenger e-Commerce thinking for your brand.
- Note : Jimmy Brings was wound down and rolled into Milk Run at the end of 2024, a few months after this article was initially published.
Photo credits
Wolf Silhouette : Photo by Ray Hennessy 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
