What is brand architecture: design a business, not a house
Over the years, we’ve helped all kinds of world-leading brands to reimagine their portfolios. From high growth companies like Enel and Uber, through to established global players like Google, Target, McKinsey and Tesco, we’ve helped people through the emotionally and commercially complex business of expanding, elevating and redesigning brands. In this piece, we shed light on how we do it - and why it shouldn't be a case of choosing between a ‘house of brands’ or a ‘branded house’.
Brand architecture is one of those topics that’s necessarily complex, as it involves lots of diverse stakeholders, brands and commercial decisions. But complex doesn’t have to mean complicated.
In the spirit of keeping things simple, let’s start by reminding ourselves what brand architecture is fundamentally about.
Good architecture builds business value
Good architecture is a tool that helps you both internally and externally.
Internally, it ensures that all current and future products help to build your brand and business strategy (rather than diluting equity and value). For example, it helps you to decide how to integrate a new acquisition or innovation into a brand portfolio.
Externally, you can use it to shape how customers, investors and your employees understand and easily navigate your offer.
Poor architecture exposes internal confusion to the outside world
Bad architecture is a reflection of the way your business has grown organically or how it’s structured internally. All too often, it looks like an incomprehensible org chart.
This means that architecture projects frequently turn into ‘tidying up’ exercises - where a tangle of products and sub-brands are lumped into arbitrary buckets. This approach creates fixed units that don’t always make sense of the status quo internally or externally, nor do they allow for future flexibility and change.
Knowing this, our approach to architecture projects is one that relies on three driving principles:
1. Make it bespoke to your business
A lot of companies frame brand architecture as a choice between a ‘house of brands’ or a ‘branded house’ (or just a hybrid of the two). We believe this approach ignores business context - for example whether you’re consolidating, shrinking or growing - and therefore precisely what kinds of value can be unlocked with a new architecture.
We go beyond ‘cookie cutter’ houses to take a bespoke approach to every business. We see this as fundamental, because the whole point of architecture should be to support your business aims and audience needs (which are unique) and not to contort itself to simply fit an archetype. Beware the real estate agents.
2. Take it for a test drive
Even the sharpest of human minds struggle to believe in change until they can tangibly see what it looks like.
That’s why we use design to visualise and ‘test drive’ what your architecture could look like. This helps to make strategic conversations more tangible and accelerates progress - as stakeholders more rapidly engage with the reality of a new architecture and the value it will bring, rather than endlessly debate the theory.
3. Respect the culture as much as the commerce
Organisations are emotional places. People see their own company cultures and their departments as places they want to belong and take pride in. We understand that and we make sure when reorganising and rationalising a portfolio, we blend analysis with empathy.
We use analysis to:
- Define appropriate benchmarks, so we can quantify what a realistic/ambitious business transformation might look like
- Model potential gains and risks, so we know what the potential up and downsides of different scenarios might be - culturally and commercially
And we use empathy to:
- Understand the decision-making culture of your board, your business and its key units
- Understand the appetite and readiness for change based on a brand’s political, financial and cultural context
This final point around empathy is especially important at the start of a project, as often architecture problems are a complex mix of issues. So it’s important to kick off by aligning all stakeholders around what issues they're really trying to solve and what the real centre of gravity of the problem is.
Indeed, we find that most brand architecture problems have one of the following four centres of gravity:
- A business problem - How do we arrange our portfolio to unlock future revenue and profit?
- A culture problem - How do we give people clarity and pride in where they belong in our organisation?
- A user experience problem - How can customers better understand and navigate our offer?
- A decision making problem - How do we provide the evidence and reassurance needed to align a complex set of stakeholders - and actually embed a new model?
Tesco case study: a business problem
For Tesco it was a business problem - all about rejuvenating growth. After decades of strong commercial performance,Tesco faced tough new competition from discounters as well as serious reputation problems. When new CEO Dave Lewis joined in 2014, he wanted to re-establish Tesco’s central role in the nation’s life. He knew that the brand was fundamentally strong, but that Tesco’s complex branding needed first to be radically simplified, and then to be amplified, bringing back meaning to the old slogan ‘every little helps’.
Brand architecture was key to helping Tesco:
- Focus the business: by building equity back into the Tesco masterbrand, which had become neglected and diluted over time - and simplifying their overall offer
- Engage people on a change journey: equipping teams to leverage the Tesco brand
- Drive innovation: creating a framework that allowed separation when it was necessary to protect the core brand from pilots, for example with its experimental challenger value brand ‘Jack’s’ - which borrowed from Tesco’s equity rather than being an overt Tesco brand
As Dave Lewis, Tesco Group CEO - “The Tesco brand is stronger and customer satisfaction is the highest it has been for many years.”
Target case study: a user experience problem
When we started working with Target, the retail giant had some 240 in-house brands, leading to a fractured customer experience that didn’t reflect Target’s positioning as a place for democratised design - an elevation of everyday products. By analysing purchase data to understand how customers grouped products in their own minds, we defined Target’s true value and a way to go to market that was intuitive and customer-led. From there, we were able to organise and drastically reduce the number of private labels - and along the way create the up&up brand, which is now ubiquitous across Target shelves.
Brand architecture was pivotal to helping Target:
- Stay closer to core equity: The proliferation of private labels allowed Target to compete on shelf against national competitors, but didn’t collect the equity
- Elevate everyday experiences: up&up created a more intuitive way for Target customers to shop their products and gain access to Target’s smart take on basics. Target claims Up&Up products consistently test better than national brands in performance and value
- Drive sales: in year one up&up drove a 21% uptick in sales in two years
A final note: It’s all academic unless you plan to deliver it
Whatever the shape of your architecture solution, it’s useless unless you plan to deliver it properly. That means creating a transition plan that clarifies whether you’re going to phase in a new model over time (a bit like a series of software updates), or whether you’re accelerating towards a ‘big bang’ launch moment.
It should go without saying that internal governance and stakeholder engagement is paramount to this transition planning process.
But there’s also the external dimension to consider too: it’s no good making sweeping changes without a clear rationale and narrative to take to shareholders and customers. Otherwise, the whole endeavour can be counter-productive.
So in summary, it’s not just the approach to the brand architecture solution that needs to be bespoke - the plan to make it real does, too.