It has long been known that the hyper-fragmentation of consumer
brands -- especially rapidly emerging challenger brands enabled by digital commerce platforms -- have been eating the lunch of long-established brands in many categories, but now a new, empirical
study from IPG's Agentic Systems in Commerce unit provides concrete evidence that legacy CPG brands need to take notice of.
The just-released report, "The Hidden Economy Taking Share from Big Brands," is derived from the unit's proprietary
analysis of data from Amazon's marketplace, showing shocking deltas -- as much as 86 percentage points in the health care category -- in terms of the sales win rates between legacy and emerging
challenger brands.
In fact, the report finds the challenger brands are winning in 16 of the 18 categories analyzed and are already dominant in 15 of them (with category win rates greater
than 15%).
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The report makes it clear that there no longer is a barrier to entry in many traditional CPG categories, and advises that legacy brands take a cue from the emerging ones by
"operating at machine speed."
"Major CPG brands face an unavoidable handicap," the report notes, adding: "Unlike insurgent brands, they must compete across dozens of retailers, with thousands
of SKUs per retailer and millions of digital shelf placements, each governed by different algorithms."
The result? Up to 90% of legacy brand product pages go untouched for many months, or even
years.
As large language models (LLMs) like ChatGPT and answer engines "become a primary way consumers discover products, the brands that update content continuously will shape the information
these systems rely on," the report advises.