Are we witnessing the end of category definitions? The week, we look at how brands are redefining their roles to suit today's ever-changing environment

1. GET STRATEGY
SMART
The Blurring Lines of
Industry

2. GET STRATEGY SMART
The Blurring Lines of Industry
In the recent past, if you wanted a loan, you went to the bank; if you wanted a TV
subscription, you went to a Pay TV provider. Today, any number of providers from a
range of categories could fulfill your need. The obvious example in demonstrating the
potential end to category definitions is Amazon; a company that has become one of the
overriding challenges in pretty much any article written about any category in recent
years. From its starting point as (superficially at least, although Amazon may debate this)
a retailer, Amazon today is an entertainment service, an electronics manufacturer, a tech
developer, a publisher, a fashion house, a personal assistant to the masses, and many
other things besides.
But while Amazon is the most talked about example, it is by no means alone in its strategy
to challenge the traditional lines of industry. Almost every brand today is having to
rethink the role it fulfills, both in society and in consumers lives, if it wants to succeed in
the future. For instance, let’s think about banking; for centuries banks’ role has been to
house savings and lend out available capital. But today, according the Wall Street Journal:
“a big bank also doubles as an enterprise software company and a mobile-apps
developer. It is a customer-service organization to big companies and individuals alike. It
is a tool of government-mandated social policy. A shareholder-return engine. An
international intermediary. A seller and trader of securities. A policeman of criminals. A
policeman of itself.”1
It’s role in society has changed, driven by forces outside of its
control. At the same time, many bankers are reconsidering the role that they want to play
in their customers lives - 61% of banking executives would like to offer non-banking
services to their customers.2
Very few brands today can get away with just providing their primary product, and doing
it well; today, brands are striving to be more than the basic, to embed themselves more
widely in consumers’ lives.
BLURRING FROM PETROL TO ENTERTAINMENT DESTINATION
At a recent talk, James Johnstone, Head of Global Consumer Insights at Shell, discussed
how the brand would have to adapt as we head towards a future of electric vehicles. He
didn’t see that the role of petrol stations would be diminished, far from it – “you have to
think of them as a piece of real estate” 3
. As we move towards electric future, there is
actually a huge opportunity for refueling stations to move towards entertainment, as
electric recharging takes around 20 minutes. There’s every possibility that in the near
1
http://graphics.wsj.com/what-is-a-bank/
2
http://uk.businessinsider.com/heres-how-open-apis-could-work-against-fintechs-2017-2
3
James Johnstone at FF Trending 2017

3. GET STRATEGY SMART
The Blurring Lines of Industry
future, we will not choose where we refill our car based on who can offer us the best price
per mile, but on who offers the most entertaining 20 minutes. For petrol companies, there
is a clear mandate - “We need to broaden the appeal of what we’re offering.” 4
BLURRING FROM TELECOMS TO FINANCE
The telecoms industry has a legacy in providing reliable experiences at scale; telecoms
providers have a huge amount of data, and the subsequent ability to understand their
customers preferences; they also hold a close financial link with their customers due to a
long-standing billing relationship. For several telcos, the opportunity to expand their
services to find additional revenue in financial services was an obvious step.
For instance, Orange in France purchased Grupama Banque in 2016, re-launching as
Orange Bank in November 2017. Orange spotted an opportunity to create a 100% digital
bank, with simplicity and immediacy at its heart, designed for the smartphone. The Group
clearly sees potential in its foray outside of its traditional industry, announcing its
objective to reach 400 million euros in revenues in 2018 in the mobile financial services
sector.5
WHAT THIS MEANS FOR BRANDS
From banking, to telecoms, to oil and gas suppliers;
companies across industries are rethinking what products
and services they can – and should - provide to customers.
This ability to shift outside of your category opens a world of new possibilities. However,
as is often the case, a new world of possibilities comes with consequences. As companies
redefine and broaden their remits, they meet a competitive set that are likely already
edging into the space that has traditionally been theirs. Companies therefore need to be
very sure that their new services are strong enough to compete with other brands that
may have been offering the service for years, while protecting their heartland.
In order to survive this shift, the role of brand is more important than ever. It’s the
cohesive element that can help consumers to understand what they will get from a
company as it transitions into wider services.
4
James Johnstone at FF Trending 2017
5
https://www.orange.com/en/Press-Room/press-releases/press-releases-2017/Orange-is-now-also-a-bank

4. GET STRATEGY SMART
The Blurring Lines of Industry
Traditionally, the definition of industries has added structure, to make it easier for
consumers to understand where to purchase certain products; if this structure continues
to decline at this pace, we are fast heading towards a world where the role of brands in
defining consumer expectations will only grow.
If you are interested in learning more about the subject of this article, please contact
Sarah Emmerson, Insights Planner, emmersons@bbdoknows.com,
ABOUT BBDO KNOWS
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BBDO KNOWS offers thinking, strategy, insights and inspiration on key categories, key
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Norris, Global Planning Director, norrism@bbdoknows.com.
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