After a promising start, Brandless, the 3-year-old San Francisco startup ceased operations. They are reducing their 70-person staff to just 10, and the 10 remaining employees are simply to field acquisition offers and complete previously placed orders.
Brandless received some major buzz over the last couple of years, due to their simple, unbranded, cheap but still sustainable products. They provided a variety of products from food to housewares to personal products. It was a refreshing break from the ultra-branded, high-cost products that flood the market. Their stuff wasn’t too in your face, they were just simple products made with good quality materials.
The success they enjoyed was more than just praise and sales from their customers. They also won the 2018 Startup of the Year award from Ad Age’s Creativity Awards, and SoftBank Vision Fund gave them $240 million of funding in their series 3 round.
There are a few reasons that people are speculating that the brand has crashed so quickly after its rise to fame.
The first being that they went a little too fast. They probably should not have taken on the $240 million investment in their infancy and allowed their growth to happen at a more natural rate. No matter how much you flood something with money, if it’s not ready, it’s not ready, and too much push too soon can actually harm you.
Another feasible explanation is that being “brandless” may not be the best idea. There is a reason that brand identification is a thing, and maybe that was the missing piece. Since the prices are so low and there is no innate trust/relationship with the brand, it makes people skeptical of how “clean” the ingredients truly are. A company with really strong branding is transparent about their low pricing, so people trust that they really are getting good products despite the low price. Or on the flip side, sometimes people would rather pay more for something just to be sure of its quality. That’s why these huge, expensive brands see success because the branding makes it seem worth it to pay that astronomical price.
Realistically, it’s somewhat of a combination of the two. Brandless CEO, however, doesn’t think that the failure of their company at this time signals a failure of their ideals. He believes that they “set a new standard in the wellness and sustainable products industry, and while we weren’t able to compete competitively in today’s DTC market, I’m confident that next brand brands of tomorrow will be built from this experience.”
We’ll be keeping tabs to see if more “brandless” companies start to pop up.
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Hannah Michelle Lambert is the Digital Marketer at Worthix, as well as the host of the monthly CX News Recap segment. She is a graduate of the University of Michigan.