Challenger Brands: Definition, Characteristics, Examples, & More

Challenger brands are brands that seek to break conventions and disrupt the market

Looking to launch a brand that will challenge an entire industry?

There are many examples of challenger brands that did just that.

With advanced technologies and emerging business models, these brands use innovation to their advantage.

In this article, we discuss challenger brands, key characteristics they share and examples of some of the hottest challenger brands of today.

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What Is A Challenger Brand?

A challenger brand is one that seeks to disrupt the market by going against the conventions.

Also referred to as a market challenger, the term denotes a business with ambitions that are bigger than its resources but prepared to do what it takes to make a breakthrough. In other words, a challenger brand adopts practices that help it differ from its competitors and seek to challenge certain perceptions specific to its industry or category.

A challenger brand does not follow the established set of practices on the way to success. Instead, it seeks to do things differently, uses innovative ways to capture the audience’s attention and gain traction. Ultimately, it strives to change the status quo and outperform the market leaders.

Three Criteria For A Challenger Brand

There are three criteria that help identify a challenger brand:

1. Market Position

A challenger brand is not a market leader or a niche. It is a brand that is far from being number one, but possesses the ambition and determination to challenge the established ways.

2. Mindset

The second and most crucial criterion that defines a challenger brand is the mindset. A challenger brand is ambitious but also aware that ambition alone is not enough to disrupt an industry.

It is a brand that adopts a specific mindset, that believes in its particular idea and is prepared to take action and be bold and different in order to gain exposure and get where they want to be.

3. Rate of Success

A challenger brand that develops and implements a challenger brand strategy will experience growth and success through its branding and marketing efforts.

This doesn’t mean that challenger brands experience constant growth and development but they do see significant results from their marketing actions.

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Key Characteristics of A Challenger Brand Strategy

While challenger brands typically differ from their competitors and go against established ways, there are certain characteristics that they all share:

Authenticity

Challenger brands don’t tend to present themselves as the polished versions that strive towards perfectionism. Instead, they go against the norm and favor authenticity and honesty.

For example, instead of airbrushed images of models with perfect skin, challenger brands in the beauty industry ensure their products are inclusive and made for everyone by emphasizing real skin with all its ordinary “flaws.”

Community Awareness

Unlike established brands that tend to focus on growing their devoted following, challenger brands tend to create and nourish a sense of community by actively engaging with followers and seeking their opinion.

These brands seek ways to connect with their target audience through a range of events, both virtual and in-person. Challenger brands prioritize meaningful conversations to discover the real problems their audience is facing. They are also open to criticism and strive to learn from it.

Purpose

Challenger brands proudly take a stance on issues that matter to them. But instead of simply talking about and promoting their values, they strive to act according to these beliefs as well.

For these brands, business isn’t only about making a profit but also about doing good and helping to make a change that will benefit everyone.

Storytelling

Challenger brands must be great at storytelling and establishing trust with their target audiences.

In a study by AdWeek which surveyed marketers, 49% of participants agreed that brand narrative is the focal characteristic of every challenger brand.

Market challengers understand that storytelling helps engage, educate and inspire consumers to turn to them instead of established brands and industry leaders.

They strive to educate and empower consumers while also emphasizing the value of their offering compared to their competitors.

Boldness

Challenger brands aren’t afraid to be bold and emotional. They speak up about things they find to be wrong and they won’t shy away from controversial topics, even though it may spark criticism.

These brands know that not everyone will like their approach and they are willing to accept the consequences that come with speaking up.

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5 Examples Of Market Challengers

Challenger brands today are challenging entire categories, not just the big names and industry leader brands. Here are five examples of challenger brands that have disrupted their respective categories:

1. Fenty

Fenty, a skincare brand, has disrupted an industry typically geared towards a select few rather than a broad audience. Fenty revolutionized the market by introducing products for all skin tones and shades, and filled a gap that existed in the beauty market.

Besides skincare, Fenty, founded by the singer and actress Rihanna, also disrupted the fashion industry by introducing inclusive lingerie, loungewear and sleepwear for all genders and body sizes. High-end fashion products used to be typically geared towards slim, conventionally attractive women, but Fenty challenged that perception by embracing all body types.

2. Oatly

Oatly has garnered a reputation as a fearless food brand and rightly so. The Swedish brand went from a small plant-based milk brand to a giant that disrupted the global dairy industry and secured a $200 million investment and a market value of $2 billion in 2020.

At the focus of its brand vision, Oatly places an emphasis on reducing greenhouse gas emissions and prioritizing nutrition. The brand sought to change the food system and achieve what was thought unimaginable – as the first non-dairy brand to disrupt the dairy industry. While the dairy industry is in decline, the oat milk market is booming.

3. Tru Earth

Tru Earth became a challenger brand by revolutionizing the laundry business. The eco-friendly brand launched in 2019 advertising a better way to do laundry with its vegan, hypoallergenic, ultra-concentrated strips free of paraben, chlorine bleach and any other harmful ingredients.

Who would’ve thought that strips of paper could clean the laundry?

Tru Earth had a bold idea to find an eco-friendly alternative to traditional laundry detergents and it worked.

But Tru Earth does even more than offer laundry strips that are gentle on the skin and on the environment. Using a subscription-based model, for every subscription, Tru Earth donates a 32-load laundry package to front-line workers and those in need across the globe.

The Canadian-based business began as a startup at the beginning of the Covid pandemic, but quickly grew to disrupt the laundry industry and become one of the fastest-growing businesses in Canada.

4. Sway

Sway tackled waste, one of the biggest environmental problems of today, by introducing a compostable alternative to single-use plastics. Taking a regenerative approach to packaging, Sway uses the power of seaweed to design a compostable replacement for plastic solutions.

The innovative brand combines science, design and technology to reimagine plastic and help reduce the harm it causes to all life on Earth.

As a true challenger brand, Sway wants to make its solution accessible to everyone rather than just a privileged few, which is often the case with climate solutions. It seeks to replace everyday plastic packaging and make regeneration a worldwide practice.

5. Allbirds

Allbirds reimagined the fashion industry, which is currently the second-largest consumer of the world’s water supply and one of the biggest polluters, given that about 85% of textiles end up in a landfill.

Allbirds designed footwear using renewable materials such as merino wool, trees and sugar cane in an effort to reduce the carbon footprint. Committed to sustainability, the brand plans on cutting its carbon footprint in half by 2025 and bringing it down to zero by 2030.

The brand is also committed to only working with suppliers that adhere to their Code of Conduct, meaning that workers are treated fairly and with high regard for their safety. Proof of how Allbirds has disrupted the industry is the fact that Adidas, one of the biggest apparel brands in the world, teamed up with Allbirds to design a running shoe with the lowest carbon footprint to date.

Wrapping Up On Challenger Brands

A challenger brand is a brand that challenges certain perceptions of an industry or by going against the conventional ways to set itself apart from its competitors.

There are three key criteria that help define a challenger brand: Market position, state of mind and rate of success.

Challenger brands share some common characteristics, including:

  • Authenticity
  • Community awareness
  • Purpose
  • Storytelling
  • Boldness

Fenty, Oatly, Tru Earth, Sway and Allbirds are just some of the brands that revolutionized their respective industries by introducing innovative, inclusive, and eco-friendly solutions.

These brands are proof that creativity, technology and ambition can go a long way in replacing the established norms, challenging even the biggest industry leaders and contributing to the community.

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