Challenger to Watch: Welly
A staple of the challenger playbook is to introduce a new dynamic or energy to a category stuck in its ways.
Method changed how we thought about cleaning products - making them a thing of beauty. Hello has been challenging the culture of "Oral Scare" in Oral Care by instead using friendly and encouraging language. Lemonade insurance has brought humanity to the world of insurance.
In a similar vein, Welly, a new brand launched last year in the world of First Aid (exclusive to Target), is bringing some joy to the world of plasters. The brand is all about turning the conventions of the sterile personal care category on its head. Instead of multi-packs, Welly offers "Bravery Badges", "Oops Equipment" and "Human Repair Kits".
It's enabled them to distance themselves from the humdrum world of plasters that we're all familiar with.
But, why is this a challenger to watch? Well, not for Welly on its own, but for an interesting trend it represents.
Increasingly, large companies and VCs are recognising the incredible potential of smaller challenger brands to take on incumbents. Our latest book, Overthrow II (available now from all good bookstores, and a big bad one too) highlights this.
Both Verlinvest and The Craftory, with over a billion dollars in investments each, are dedicated to finding and developing the next wave of challengers, both believing that the time of "bigger means better" is over and that consumers are turning more and more to brands trying to overturn the status quo.
This belief appears shared by the leaders at Target. In the last few years, we have seen the large US retailer develop somewhat of a challenger strategy of its own. Where its aisles were once stocked with the giants of various categories, Target has now partnered with a number of smaller challenger brands to offer valuable shelf space amongst the big boys. In many cases, these challengers are getting the prime positions that their incumbent rivals used to enjoy.
Many Target stores now have what appears to be a challenger aisle - with elaborate in-store displays for brands that are new to the high street, many of whom were solely distributed direct-to-consumer up until now.
Serial challenger Eric Ryan (co-founder of both Method and Welly)
On top of that, Target is intentionally branching into private label challenger brands, instead of own-brand products. Brands like Welly are helping Target to intentionally buck the trend for large retailers to offer cut-price discounted brands that look and feel like the bigger brands you know (in stores like CVS, own brands use the same packaging and color palettes as the brands you know). Target is instead building challengers from the inside.
Why is this? Well, speaking to Quartz in 2018, then Chief Merchandising Officer said: "We differentiate Target by developing and curating new, innovative products and exciting new owned brands, which deliver an unbeatable combination of quality and price".
In a retail environment that is increasingly defined by e-retail and the dominance of Amazon and Walmart.com, Target is betting that it can curate a range of products and in house brands that can become customer favorites. If these brands take off, they can insulate them from the price pressure e-retail creates.
It's exciting to see Target put such a premium on creative brand building, instead of mimicking category conventions. Long may it last. Have a Bravery Badge.