Anthony Choe believes aspirational brands just might be over.
According to the founder of Provenance, a growth-stage investment firm catering to omnichannel brands such as Knot Standard, brands of yesteryear took a much more aspirational tone in their marketing and advertising communications relative to how successful new companies talk to their audiences today.
Back in the day brands “stood for something that you weren’t but maybe one day—hopefully if you squinted hard enough in the mirror—you might become,” Choe explained at the Retail Influencer Network dinner in New York City Wednesday.
That strategy doesn’t jibe with today’s savvy, empowered and ultra-informed consumer.
“What people are looking for now is a reflection of themselves,” he said. “Don’t tell me what I should be. Do you represent what I am today?” That “people are voting with their pocketbooks as well” is forcing brands to sit up and pay attention to a consumer who’s in full control of the conversation.
Shoppers, Choe noted, are “self segmenting” into ever smaller tribes—“and that’s the challenge everybody’s dealing with,” more so than the advent of digital resources like Shopify spurring the continuing fragmentation of the brand landscape.
The world is getting narrower for every merchant, from multibrand retailers to monobrand sellers. “All of us depend at some level on capital,” Choe explained. “Capital likes scale, but scale doesn’t give you the growth today. That’s what we’re trying to solve with a little bit more precision.”
Provenance reviews troves of customer data and transaction files when deciding whether to move forward with an investment. “We try to quantitatively and qualitatively find the tribe that resonates most strongly with the brand,” said Choe, who will speak at the upcoming Sourcing Summit New York on Oct. 17.
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What he’s learned from all of this data is that out of the 71 household demographic types populating the U.S., just four compose the majority of the customer base for Marine Layer, the nine-year-old Bay Area brand that Provenance made a “significant minority investment” in a year ago. So-called “American royalty” and jetset urbanites are among the biggest brand devotees but “there’s a baby boomer group that’s significant and a huge millennial component as well,” Choe said. “It’s very similar to the Nordstrom customer but five to seven years younger.”
Marine Layer’s 37 stores are clustered in left-leaning urban centers from San Francisco and Seattle to Austin and Brooklyn, where well-heeled and highly educated shoppers appreciate the brand’s emphasis on ultra-soft pared-down basics, its tagline of “everyone’s favorite tee,” and a sustainability initiative in Re-Spun that takes back used items of clothing and recycles them into new, if somewhat less soft, pieces. Not surprising, Choe describes the classic Marine Layer customer as someone who “skews very progressive.”
“Avid Fox News watchers do not buy Marine Layer product,” he added.
Choe said he warned Marine Layer of the challenges and drawbacks to growing outside of its DNA, the brand ethos and core mission that attracted its customer base in the first place.
“When we invested in Marine Layer, we told them, ‘you’ll never be a 400 store chain. You shouldn’t try to be,’” explained Choe, noting that he held the same conversation with Andy Dunn and Bonobos. “If you do, you’re going to have a wildly different customer base than you do today.”