Will Influencers create the next big brands?

Updated: Jan 25

After 4 years of manufacturing, marketing and retailing sportswear, as well as being an avid social media user, I've come across quite a few influencers. They range from household names to being well in their own niche markets, but each hold strong relationships with their communities.

Looking at this as a product based entrepreneur, I believe that influencers have the potential to become far more involved in the ownership of product rather than just acting as a marketing tool for brands. Not only do they have the potential to, but I believe there is a very big gap in the market for Influencers to grow commercial brands and further their personal brands via this avenue.

Influencers engaging in brand collaborations and the retail of their own merchandise is commonplace, but I believe there will/ should be a very strong movement towards a more formalized company structure behind them.

This blog is going to look at this how influencers could end up being far more involved in the creation of brands and products, primarily because they are the entities that hold the power.

So what is the current relationship between influencers and brands?

Influencers aren’t a new concept, there have always been individuals that have been given a lot of attention. Influencer marketing also isn’t new either, in the 1700’s the famous potter and entrepreneur Josiah Wedgwood tapped into royalty, getting kings, queens and other nobles to endorse his pottery line. The concept is not new, there was just never a medium for the concept to scale.

The rise of social media democratised fame by offering a platform for individuals to grow followings and become modern day celebrities. Whilst celebrities offer more reach and are more notable, Influencers are more effective as they have built communities that trust them as well as offering segmentation of audiences that is the key to effective marketing.

Influencers also beat celebrities as they have grown through interaction with fans to build communities, the traditional form of celebrity typically does not engage with fans as they don’t need to. In a lot of cases celebrities have a strange relationship with fans, where they like them as long as they watch their films, listen to their music and don’t come too close!

The relationships that exist between brands and influencers can come in a few different packages, but most typically these are sponsored posts and affiliate marketing schemes. These are mutually beneficial, the brands gain awareness and credibility, the influencer gets paid.

However in my opinion the market is coming to a turning point.

Traditional influencer marketing is evolving and in my opinion will move towards Influencers creating their own brands. However it is important to note that other evolutions do exist such as longer term deals and micro influencers. At the end of the day it is up to the influencer to decide the route that they a want to take as each evolution has pro’s and con’s.

I am only looking down the avenue of brand creation as this is my field. As someone who has created numerous products and brands, the main challenges exist around growing audiences, something which influencers by their nature have already done, or can do easily.

So where does the power in demand creation lie?

A simplification of marketing in the world of retail is to have a product, to understand who the customer is, understand where they spend their time and then communicate the product to that customer with the goal of making a sale.

The great companies across all industries always know exactly who their customer is, where they spend their time and what they want.

Influencers are able to operate the other way around. They have already done the hard work by understanding exactly who their customer is through creating a community of followers around themselves that actively want to engage with them.

Looking at this from a sales funnel perspective, the top of their funnel is ridiculously full of leads they just have nothing to convert on. They could potentially monetize this following in a number of ways, as in most cases followers they feel as though they owe the individual as they have supplied so much engagement and enjoyment at no cost.

They have developed specific communities that are ready to buy.

The evolution of ‘merch’

So what products should they sell? As someone that actively uses social media and watches YouTube, there has clearly been a ‘merch’ revolution over the past few years where influencers have opted to create their clothing or ‘Merch’.

Initially use of a platform on social media to sell product was seen as ‘selling out’ and tacky, however over time there has been a shift in perception. It became tacky to the point where YouTube sensation Jake Paul made a Christmas song called ‘Buy that Merch’ which currently sits at 17.7million views.

However over the past few years this perception of monetizing followings changed quite drastically, with fans actively asking for merch to be sold, and instead of the Influencer being labelled a ‘sell out’ the title has changed to a businessperson and entrepreneur.

This change brought in the retail of standardised merch which saw a lot of influencers selling very similar products. Whilst they state in their content that their merch is great and they have waiting ages to find the right product to put their name to, these products usually come from the same factories and are almost identical. (This is not to say that these are bad products, I own a number of 'merch' items!)

Influencers collaborating with brands to create products

Some brands have realised that influencers can be much more than a bolt on marketing tool and have been able to use their audiences by creating ranges or new entities alongside them. These come in a variety of shapes and size.

Nikki Blakketer by Gymshark was a collection launched by Gymshark as a popup - the joint venture as very much within the Gymshark brand however has her name on the front. A far more in depth version was the creation of Ivy Park, which was the brainchild of Beyoncé and Philip Green, using her fame and his contacts and supply networks.

We have gotten to the stage where some influencers wield so much power that they themselves are able to enter into markets in a competitive manner and no longer need brands. (It’s important to note that success is relative, so even smaller influencers within the right niche would be able to create amazing companies within their specialism)

Influencers creating brands

I think that what we are going to see far more of in the future is brands that are fully created and owned by influencers. The barriers to entry for an individual with an identified and proven target market as well as a source of capital to fund the venture are very low in comparison to others.

Companies that are founded by influencers do exist, but there is great potential in the market for more. At the moment the majority of Influencer founded companies are fashion based, which is generally because they are a very visual product which lends itself to social media. A great example of this is Tala. Founded by Grace Beverly. Tala is a Sustainable Sportswear brand for her predominately female and fitness oriented audience. This brands has become very successful in its own right, but something that I would like to see more of and believe is the way the market will swing, is influencers/ celebrities moving away from clothing based products.

We are getting there and there are some brands that fit this criteria, however these are some of the more notable examples. These individuals have built up enough authority within a certain market and they have the following that if they were to create products then they would be received well.

  1. Mr Beast Burger founded by Mr Beast is a digital fast food chain.

  2. Candy Kittens founded by Jamie Laing is a British Gourmet Sweets brand.

  3. Maison 9 founded by Post Malone is a Wine Brand.

  4. Nikki reed founded Bayou with love is an earth conscious Jewellery brand.

  5. Tumeric Co Founded by Hal Robson Kanu is a supplement company.

Another example that is worth mentioning that has worked out fantastically for the individual is Ryan Reynolds’s partnerships with Aviation Gin and Mint Mobile. Whilst I’m not 100% sure on the specifics, it appears as though he finds existing companies he likes, buys a large stake and then puts his name and brand to work in raising their profile. He sold his stake in Aviation gin for $610m and Mint Mobile has seen a 50,000% increase in revenue since he got involved. Not bad!

The degree to which the influencer/ celebrity is involved in these ventures varies a great deal. Some operate as poster boys/girls for the brands and lend their image to them, and some actually act as the CEO. Influencers spend a great deal of time creating and curating content as well as managing their audience which makes them incredibly busy. They already have capital behind them through their following so building a team around them for day to day management is easy.

This leads me on to my next point.

What does the future look like and how can those who aren’t Influencers get involved?

Influencers know how much power they wield, but I believe they will start to realize how great that power is and that there’s a lot of options as to what they can do with it. Tech start ups were considered the cool thing to do in the 2010’s where execs would leave the corporate roles to join a young cool team. In the 2020’s we may see execs leaving their jobs to join these new influencer led start ups.

For agencies.

Should this emerge we will then most likely see existing influencer marketing agencies move towards this and new agencies pop up to take advantage of the new market.

For existing companies.

If you are a companies should keep an open mind to the above, whether its collaborating, creating a joint venture or taking a high profile individual on board there are numerous ways to maximise growth. All deals are up to negotiation so the outcome is what you make of it.

This type of business model is especially attractive if you own the full supply chain, for example if you were to run a high end shirt company, using the exact same supply chain you could reach out to a major celebrity offering to go half on a brand under their name and taking care of everything for them. Depending upon the business model of course this could be lucrative for everyone.

You will also need to be proactive and go out looking to increase chances.

For Influencers

Influencers on the other hand are in the luxurious position where they can create a business themselves quite easily however that is a hard route to go down. That’s not to say that it will be easy, in order to create a brand and then scale it is a complicated thing but the hard part of gaining the audience is already done. I’ve mentioned a few methods above, but the simplest would be to find a partner with experience in the industry or to build a board of advisors to tell you how to get it done.

I hope this shed some light and if you have any questions please do get in touch.

22 views0 comments
  • Twitter
  • LinkedIn