A challenger brand is typically defined as a company that’s neither the market leader or a particularly niche brand, but one that sets itself apart with a driven mindset.

According to The Challenger Project, these brands are “less about business enmity, and more about an often mission-driven desire to progress the category in some way in the customer’s favour.”

Challenger brands should not be confused with disruptor brands, which are more focused on overtaking or becoming the market leader through a new or unique product offering.

There are many examples of successful challenger brands out there – but what characteristics do they share? Here’s a look at just four important traits.

The ability to tell a story

A recent study by AdWeek – which surveyed more than 200 brand marketers – found that 49% of respondents believe the ability to craft a brand narrative is the most important characteristic of a challenger brand. This, combined with an entrepreneurial mindset – whereby brands strive to continuously innovate – is what gives many the edge.

One reason storytelling is so important for challenger brands is that it helps to build trust, which can be a factor that draws consumers away from leading brands. Challenger narratives are often based around value, and what they can offer consumers that other brands can’t. Take Rebel Kitchen, for example, which is a brand in the growing dairy-free drinks category. Its brand narrative is based on its bold and ‘rebellious’ nature, which aims to convince consumers that they shouldn’t settle for poor alternatives in the same category.

It is not just storytelling itself that is important, of course, but how challenger brands utilise various channels in order to get their message heard. In recent years, Instagram has been a huge vehicle for brand storytelling, with many utilising the platform to drive both awareness and engagement.

AdWeek’s study suggests that challenger brands tend to rely more heavily on formats that tap into their storytelling ability, such as Facebook, and influencer campaigns.

Authenticity

It’s important for all brands to be honest – transparency is a basic expectation – however there is a difference between honesty and authenticity. So while large and established brands typically focus on promoting a glossy and idealised version of themselves, there’s been a growing trend of challenger brands doing the opposite.

This is particularly the case in the beauty industry, where challenger brands like Fenty are combatting norms and stereotypes, and instead creating a brand narrative that promotes real and natural beauty. This does not mean natural as in the ‘no make-up’ look, but rather, what make-up actually looks like on real people. 

The reason why Fenty’s marketing has been so successful (and so strongly resonates with consumers) is because of the product’s inclusivity. Fenty designs for all skin types, with its foundation in particular winning praise for its inclusive 40 different shades.

The impact that Fenty has had on the wider industry is also a good indication of its challenger status. Shortly after its foundation range was launched, a slew of other brands including L’Oreal followed suit with their own.

Caring about community 

Another characteristic of challenger brands tends to be the ability to create and foster communities. This is enhanced by the ‘underdog’ nature of these companies going up against leading brands, which tends to create a devoted and cult-like following online. Glossier is another beauty example that springs to mind here, due to the brand actively speaking to and seeking out involvement from online fans.

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"At our core, Glossier Inc. is about celebrating freedom of choice when it comes to how we all look, act, and feel. Each and every one of you is your own expert, with the ability to tell a story about what beauty means to you. Today I’m thrilled to introduce @GlossierPlay, a new approach to makeup that’s inspired by sound, motion, and fun. Glossier Play’s first four products are tools for expression: Colorslide technogel eye pencil, Vinylic Lip high shine lacquer, Glitter Gelée multigrade paillettes, and Niteshine highlighter concentrate. Each one creates endless possibilities to get ready, let loose, and most of all, play. There will be more—more colors, more textures, more ways to dial up your look. The one thing that won’t change is Glossier’s simple and intuitive approach to design that’s consistent across everything that we do. With this new brand, we’re inviting you to continue to choose your own beauty adventure…only now with even more places to go. The world is your Playground! Thank you for joining us."—@emilywweiss, founder + CEO

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Offline, these brands are also finding new ways to connect and interact with consumers on a more meaningful level. This is often done through experiential marketing or events, which allow them to create a face-to-face connection with the fans that offer their support or custom online.

Gymshark, which positions itself as a challenger to large sports brands like Nike and Adidas, has relied heavily on ‘expos’ and meet-ups to foster its own community. These events enable fans to meet their favourite influencers and sports personalities, and helps Gymshark to continue to create relationships with consumers in a way that goes beyond standard marketing.

Purpose

Consumers tend to be drawn towards companies that demonstrate similar values to their own. This means that taking a stance on important issues can be beneficial for all brands – regardless of size or market position. However, instead of merely promoting an issue or belief, challenger brands tend to use these values as the basis of everything they do. 

For example, energy brand, Bulb – a challenger to the big six energy companies in the UK – differentiates itself with a promise of 100% renewable electricity, using its ‘greener’ values to inform its brand marketing.

Allbirds is another challenger brand that focuses on sustainability, this time creating a range of footwear that is made from, and inspired by, natural materials.

Again, this environmental championing informs a lot of Allbirds brand marketing. However, the fact that these values have been core to the company from the very beginning, means that it always feels natural and authentic to consumers, and not just another company jumping on the ‘brand purpose’ bandwagon.

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