Challenger brands are not industry leaders, but their ambition is so huge that they can easily become it. They break conventions and disrupt the market using innovation to their advantage.
This article discusses challenger brands and their key characteristics. Also, we’ll introduce you to some of the hottest challenger brands of today.
Table of Contents
What Is A Challenger Brand?
A challenger brand, also known as a market challenger, is a brand that aims to disrupt the market by breaking away from conventional practices. Although not the market leader in its category, it possesses the potential to challenge dominant players. It may have limited resources as a smaller and newer brand, but it compensates with immense ambition, innovative approaches, disruptive strategies, and unique value propositions.
A challenger brand distinguishes itself from competitors using practices that challenge industry or category norms. Rather than conforming to established rules, it seeks to stand out by adopting innovative ways to capture its audience's attention and gain momentum. Ultimately, the goal of a challenger brand is to transform 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.
The most crucial criterion that defines a challenger brand is mindset. A challenger brand is ambitious but aware that ambition alone is not enough to disrupt an industry. It adopts a specific attitude, believes in its ideas, and is prepared to take action and be bold and different to gain brand exposure and get where it wants to be.
3. Success Rate
A challenger brand that develops and implements a challenger brand strategy will experience growth and success through its business branding and marketing efforts. This doesn’t mean that challenger brands experience constant growth and development, but they see significant results from their small business branding and marketing strategies.
Key Characteristics of A Challenger Brand Strategy
While challenger brands typically differ from their competitors and go against established ways, there are specific characteristics that they all share:
Challenger brands don’t present themselves as polished and perfect. Instead, they go against the norm and favor authenticity and honesty. For example, challenger brands offer inclusive products by emphasizing natural “imperfect” beauty instead of airbrushed images of models with flawless skin.
Challenger brands create and nourish a sense of community by actively engaging with followers and seeking their opinion. They 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.
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. 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.
Challenger brands are great at storytelling and establishing trust with their target audiences. They understand that storytelling helps engage, educate, and win over consumers. They strive to educate and empower consumers while emphasizing the value of their offering compared to their competitors.
Challenger brands aren’t afraid to be bold and emotional. They speak up about things they find wrong and won’t shy away from controversial topics, even though it may spark criticism. These brands know that not everyone will like their approach and are willing to accept the consequences of speaking up.
Top 8 Challenger Brands of 2023
Challenger brands today are challenging entire categories, not just the big names and industry-leading brands. Here are the top challenger brands examples:
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.
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.
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.
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.
6. Under Armour
Under Armour became a challenger brand by disrupting the sports apparel industry, offering a revolutionary approach to sports clothing. Kevin Plank, a former football player who saw a need for moisture-wicking, performance-enhancing sporting clothes, launched the firm in 1996.
Under Armour distinguished itself from other sports clothing companies by emphasizing sophisticated fabrics and technologies that might boost athletic performance. The brand's moisture-wicking fabric was revolutionary, and athletes rapidly realized the advantages of wearing Under Armour gear.
The company's dedication to innovation and performance challenged more established sportswear brands such as Nike, Adidas, and Puma.
Casper Mattresses became a challenger in the industry, disrupting the traditional way of purchasing mattresses. The company recognized that consumers were tired of the high prices and commission-based purchases when buying a mattress from an established brand. To address this issue, they offered an alternative option. Their memory foam-based mattresses could be purchased exclusively online.
Casper's 100-day money-back guarantee reassured skeptical consumers, allowing them to try the mattresses risk-free. By offering this guarantee, Casper differentiated itself from established brands and built trust with potential customers.
Although it is a marketing leader today, Airbnb used to be a challenger brand. By providing a platform for individuals to rent out their spare rooms, the company allowed people to travel and stay in unique places at a lower cost.
This simple solution caught on with many people and challenged the established norms of the hospitality industry. Despite becoming a household name, Airbnb is still a prime example of a challenger brand that used innovation to differentiate itself from its competitors.
Challenger Brands: Bottom Line
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:
- Community awareness
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. Businesses can achieve this success with the support of top brand agencies that help create and communicate their unique value proposition.
Challenger Brands FAQ
What is the opposite of a challenger brand?
The opposite of a challenger brand is a market leader, an established brand with a significant market share and a dominant position in the industry. Well-known, successful brands usually follow established rules and are less likely to take risks or introduce innovations that disrupt the market. The reason for this is pretty obvious — they rely on their existing brand equity and reputation to maintain their position as the market leader.
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