Category disruption involves breaking traditional rules and innovating to alter the status quo. The disruption of established product or service categories is often driven by so-called ‘challenger’ brands that focus on human-centric innovation. Being agile is key - in order to create category disruption brands cannot afford to be slow or siloed in nature. Disruption is most commonly driven by the emergence of digital technologies, and the opportunities they bring to distribute products or rethink services.
Category disruption occurs when a disruptive innovation creates a new market and value network within a category and eventually disrupts an existing market and value network, displacing established market leaders and alliances.
1. Big brands are facing disruption from smaller insurgents and e-commerce platforms
Insurgent brands play by different rules to big established brand leaders, as shown by our research with marketing directors. First, smaller brands are more agile (64%), with simpler structures allowing faster response to emerging trends. Second, smart use of social media (56%) helps them at launch, although many later move into traditional media to get reach. Secondary success factors include easier access to out-sourced production and retail channels, both online (direct to consumer or via online retailers) and also in physical stores looking for new, premium, distinctive brands. There are also many more sources of funding today via venture capital, crowdfunding, accelerator programs and private investors. However, there is much that brand leaders can do to respond to the threat.