Despite seemingly having it all, there is one key ingredient missing.
The Thrasio model is indeed an excellent option for founders who are keen on an exit. And Thrasio and other companies that follow a similar model indeed have awesome competencies that can be leveraged across multiple brands. From aspects like marketing prowess and product photography to fundamental aspects like supply chain and logistics, companies like Thrasio have built comprehensive capabilities that they deploy across multiple brands as shared services.
It is a great model. Brands get the benefit of the muscle of a larger umbrella, and the company gets the cost-advantage of leveraging resources and relationships across brands. They are able to bring in expertise that would otherwise not be possible for individual brands to access.
Think of the Thrasio model as building a FMCG behemoth like P&G or Unilever via acquisitions, and optimised for the current business circumstances and digital platforms.
However, in my view, despite all the apparent benefits of shared resources and the power of a larger entity, the key ingredient missing is the emotions and passion of the founders of the brands. A brand is a set of intangibles. It is not about the nice-looking visuals and catchy content. It is a set of attributes that consumers associate with the name. Consumers begin to associate specific attributes with a brand because that brand consistently reinforces these aspects in their communication.
Building a brand is as much an art as it is a science. Even the science of brand building has to be applied as relevant to each brand. E.g. Soaps like Dove, Lux and Pears have very distinct value propositions and, more importantly, very distinct emotional personalities that are captured by the nuances of the brand’s communication. Subtle things like colors, age & personality of the model, the nature of the background music in a tv commercial, the tone of voice, etc. etc. have to be nuanced for each brand so that it is consistent in how consumers see the brand. Consistency in the communication reinforces the brand’s proposition and personality, and it becomes the brand’s identity and equity.
Brand identity, which over time becomes brand equity, needs to be nurtured with the commitment and passion that is difficult to replicate without a ‘keeper of the flame’ — someone who gets the fundamental aspects of a brand and who is passionate about protecting the brands from straying outside of the key aspects which make that brand what it is. In companies like P&G and Unilever, it is the brand manager who is the keeper of the flame. In brands that were created by individual founders, the founder(s) are the brand managers.
In the Thrasio model, I am not sure how this abstract aspect of ‘passion & emotion for a brand’ is being handled. While I love the Thrasio model for the operational efficiencies and inherent scalability it brings to brands, I am skeptical whether the model, without the involvement of an emotionally connected brand manager, will be able to create brands that consumers develop an emotional connection with.
According to eminent branding & marketing veteran Sai Nagesh, “Scaling a brand requires tangible and intangible inputs. While the Thrasio model has been great at identifying the tangibles, I hope they have planned well for the intangibles that need to be customised for each brand! I do wonder if a PaperBoat or a Mamaearth would have emerged from this model.”
Often marketers confuse brand recognition and brand equity to be the same thing. It is not. Brand familiarity can be achieved with media spending. But that alone does not ensure that it establishes a preference for your brand over other options that the consumer has or may have in the future. Emotional connect with the consumer is a defensible moat that the brand has against the competition, and in many cases it also allows the brand to command a premium over other options.
An eternal optimist, I am hopeful that the promising model will evolve to engage the art of brand building along with the operational efficiencies, financial muscle, and shared resources.