Research shows that typically, the more information consumers have, the better they are at ignoring corporate iconography. One 2014 study, for instance, found that pharmacists and physicians are three times less likely than the typical customer to buy national brands of headache medicine when cheaper store brands are available. If all consumers became as informed as medical experts, the study concluded, national headache-remedy brands would see their sales cut in half.
An economy filled with product experts would wreck certain brands, according to Itamar Simonson, a marketing professor at Stanford. Advertising thrives in markets where consumers are essentially clueless, often because quality is hard to assess before you buy the product (medicine, mattresses, wine). But on sites like Amazon or eBay, and across social media, information from other sources—ratings, reviews, comments from friends—is abundant. We’re more likely to trust these signals precisely because they aren’t beamed from corporate headquarters.
The market for high-definition TVs shows how too much access to information can destroy the brand premium. A TV’s two most salient features—its screen size and resolution—are easy to look up, which makes it difficult for companies to charge extra for a logo. Making televisions is a notoriously low-margin business, and the price of TVs has declined 95 percent since 1994. Sony’s TV unit had been in the red for 10 years when the company spun it off in July.
And yet Apple, among many other brands, still means a great deal to a great many people. There are at least two reasons to question the notion that we’re evolving into a race of Homo economicus super-shoppers, or ever will. First, even with perfect information, consumers often make imperfect decisions. Sites like Amazon provide an exhaustive array of choices, but having too many options can make us feel both overwhelmed as we shop (the “paradox of choice”) and less satisfied with the choices we make (buyer’s remorse). Returning to an old brand is a mental shortcut that is not only simple but also, in its own way, blissful.
More important, in categories like cars or clothes, brands aren’t just signals of quality; they also help us communicate our identities. When somebody totes a Fendi bag or drives a Harley-Davidson chopper, she is sending a message (particularly when doing both at the same time). “People are meaning-seeking creatures,” says Susan Fournier, a professor of management at Boston University. “The brands we buy and wear and use are symbols to express our identities. I don’t think any of that is diluted by the Internet.”
As branding loses some of its influence as a marker of quality, savvy companies are shifting their marketing efforts ever more strongly to this other source of brand advantage—identity and community. Recently, many of the most successful new brands have been looking to an unusual but powerful source of inspiration: religious cults.
In 1984, the British sociologist Eileen Barker published The Making of a Moonie, a seven-year investigation of the Unification Church, based on interviews with members of one of America’s most popular cults. While many cults are portrayed as preying on the poor and uneducated, and particularly people from broken homes, Barker discovered that Moonies tended to be middle-class, with college degrees and stable families. The cult inculcated new members through simple techniques: weekend retreats, deep conversations, shared meals, and, most seductive, an environment of love and support.