Brand differentiation means distinguishing your business and products from the competition by highlighting a unique aesthetic, personality, story, or exceptional customer service. Gloria Hwang, CEO of the bicycle helmet company Thousand, learned the value of differentiation when bigger brands started launching competing products.
Instead of pursuing different customer segments to compete on scale, she doubled down on Thousand’s core audience of urban travelers and families. “The only way to outdo competitors who are bigger than you and have more resources is to just keep getting more differentiated,” Gloria says on an episode of the Shopify Masters podcast. Serving everyone, in her experience, makes a brand less distinctive and compelling to their core customers.
Here’s why brand differentiation matters for small business owners, four effective approaches, and three tips for developing a strategy of your own.
What is brand differentiation?
Brand differentiation distinguishes your brand from your competitors. It involves identifying what makes you different, developing a unique brand identity, and designing marketing campaigns that convey what sets you apart to your target audience.
A robust brand differentiation strategy can provide a significant competitive advantage. The goal of effective differentiation is to attract the right potential customers, encourage brand loyalty, and boost customer satisfaction by aligning brand perception with the value you offer.
4 brand differentiation strategies
- Build something different
- Develop a unique brand story
- Look like yourself
- Break the rules
Here are four strategies that can help you stand out in today’s competitive market:
Build something different
An effective differentiation strategy isn’t just about perceived value; it starts with offering something tangibly unique. This differentiator can be in your core product features, sourcing, or approach to shipping and customer service—as long as it’s noticeably distinctive rather than a minor improvement.
Thomas Hal Robson-Kanu, founder of beverage company The Turmeric Co., identified his brand’s competitive edge when he realized that the majority of brands in his category relied on just a few third-party manufacturing facilities, a situation resulting in products that were virtually indistinguishable. To protect the homemade recipe and functional ingredient formats that make it unique, Thomas’s company took production in-house.
“A lot of the beverages on the market weren’t actually that functional,” Thomas says on Shopify Masters. “We very quickly realized if we wanted to bring our homemade blend to market, we’d actually have to build manufacturing capability ourselves.”
Develop a unique brand story
No two origin stories are the same, yet too many brand stories are. Ellen Bennett is the founder of kitchen retailer Hedley & Bennett and ran into this problem when forming her brand. “Do not, for the love of God, say, ‘I saw a white space in the market,” Ellen says on Shopify Masters. “Whatever people can do to build something with some soul and some actual story is critical.”
These kinds of brand stories—the ones with soul—can help you build a loyal customer base by encouraging customers to form a stronger emotional connection with your company.
Craft a brand story that highlights what sets your company apart. The Turmeric Co., for example, was born from the founder’s teenage struggle with chronic pain and inflammation, which his father successfully treated with the precursor to the company’s recipe. This origin story works because it reinforces what makes the brand unique: functional ingredients with real-world benefits.
A strong brand story can also ground future branding and marketing efforts. “When you have a really compelling brand story, it can last throughout the entire journey of a company,” Dave Carlson, president of Wildflower Cases, says on Shopify Masters. The brand has the good fortune of an origin story featuring a chance encounter with Miley Cyrus.
“Our story is just so unique that sometimes I feel like there’s no one like Wildflower,” he says. “We tend to not really look at competitors or see what they’re doing. We’re almost in our own universe.”
Look like yourself
A strong visual brand reflects what makes you different. Alex Matthews’ rebrand of De La Calle soda focused on differentiation through design. The company repositioned its product as a “modern Mexican soda,” a fresher take on the more familiar “fermented beverage” niche the brand previously occupied. Its updated visual identity reinforces the new positioning with simplified design and bright, bold colors.
To help your company stand out, Alex suggests studying competitor branding and intentionally doing something different. “A lot of brands get kind of dragged into the same colors as the category,” he says on a Shopify Masters episode. “Protein drinks are a great example. Everyone’s using this pale blue color, and it waters down what makes that brand special because everyone just ends up looking the same.”
A different look can help you stand out in a crowded marketplace and boost brand recognition. Conduct a competitive analysis to see what’s working in your market, but instead of imitating the competition, take those strategies and make them your own. You might use a monochromatic palette like your competitors but opt for hot pink in a sea of navy. “Not getting too dragged into what everyone else is doing and trying to do your own thing helps you differentiate,” Alex says.
Developing a distinctive brand image is also a chance to celebrate what makes your company different. A unique cultural lens or a diverse internal team can generate perspectives that authentically distinguish your brand. “It helps to have these young, female, fashion-centric leaders within the company,” says Dave Carlson of Wildflower Cases. “They just went to Paris Fashion Week and Milan Fashion Week and said, ‘Let’s design a case like this.’”
Break the rules
Breaking category conventions is one of the best ways to stand out. Consider the protein snack company Elavi’s approach to packaging. The company placed its product type front and center, featuring “protein brownie” in the spot traditionally occupied by a company logo. Cofounder Michelle Razavi says on Shopify Masters that in highly crowded markets, brands can’t afford to look like everyone else.
“Consumers make snap decisions, and we wanted the product to be at the forefront,” Michelle says. “We made this bold decision: ‘Let’s just be very upfront with what we’re selling. They’ll figure out our name later,’ and it actually crushed.”
Danille Close similarly flouts brand convention with her approach to her skincare brand, My Skin Feels, intentionally avoiding the clinical, serious tones common to sustainable brands. To set her company apart, she invested in a playful brand personality, opting for bright colors and packaging featuring fun doodles.
“I didn’t want to look like another natural brand,” she says. “I wanted to look interesting and different and stand out on the shelf and prove that organic isn’t boring. We’re actually really fun.” Her advice to small business owners: Keep it weird. “If you’re launching a brand today, please make it as different as possible, as weird as possible,” she says. “That’s what people want to see.”
How to implement a brand differentiation strategy
- Conduct market research
- Be consistent
- Market your difference
Effective differentiation requires you to understand your market and consistently communicate what makes your brand unique. Here’s how to build a brand that’s distinct from competitors:
1. Conduct market research
Michael Petry, creative director at Golden West Boots, suggests starting the differentiation process by studying your target market. “You have to be totally in tune with what’s happening in the marketplace,” he says on Shopify Masters. “You should know every single inch of what your competitors are up to.”
Use market research to study your audiences and competitors and look for opportunities to set your company apart. Focus on the following questions:
- What do my competitors offer? What does my business offer that they don’t?
What do my competitors offer? What does my business offer that they don’t?
- How would I characterize my competitors’ branding? How are their brands similar? How does my brand compare?
How would I characterize my competitors’ branding? How are their brands similar? How does my brand compare?
- What do consumers in my market need? What consumer needs is the market not currently meeting?
What do consumers in my market need? What consumer needs is the market not currently meeting?
- How do my competitors’ branding and marketing efforts engage with consumer preferences and needs? What needs aren’t explicitly addressed?
How do my competitors’ branding and marketing efforts engage with consumer preferences and needs? What needs aren’t explicitly addressed?
Your first goal is to understand your competitors’ branding strategies so that you don’t accidentally replicate them. “You have to be able to create your own lane and figure out what your story is, not what their story is,” Michael says.
Use your findings to identify a unique market position for your company, whether that involves closing an existing market gap or focusing your UVP around a distinctive customer preference. “I think there’s space for everybody,” Michael says. “The thing you have to do is create your own space and reason for being."
2. Be consistent
Deploy your unique brand identity consistently across channels by updating brand elements, organizing assets and materials, and configuring software tools to apply current brand parameters to new content. Use Shopify’s logo maker to design a distinctive logo, and its brand management tools to centralize assets and coordinate them across channels.
Consistent messaging matters too: Thomas of The Turmeric Co. notes that consumers need to see or hear a brand’s message seven times for it to stick. To do that, you have to be consistent. “You have to reinforce that core message,” he says, cautioning against changing your core audience, position, or messaging just because you’re bored, noting that what feels redundant to marketing teams is critical for audiences to hear.
3. Market your difference
Develop a marketing plan that highlights your differentiators, even when they aren’t a campaign’s central message. Say you’re an organic baking mix retailer differentiated by donating a percentage of proceeds to the ASPCA. You might ask influencer partners to include their pets in posts promoting your products or publish pet treat recipes as part of your content marketing mix.
You can use influencer and creator partnerships to reinforce messaging about what makes you different. Shopify customers can use the Shopify Collabs platform to find and recruit creators who align with your brand values and complement your unique aesthetic.
Brand differentiation FAQ
What is brand differentiation?
Brand differentiation is the process of distinguishing your brand from its competitors. It involves identifying what sets your brand apart and developing branding and marketing campaigns that communicate that difference.
What is product differentiation in simple terms?
Product differentiation uses marketing and branding strategies to highlight what distinguishes your product from others on the market.
What are some examples of differentiation?
Hedley & Bennett differentiates itself by offering home cooks professional-grade kitchen items that reflect the brand’s distinctive approach to design—or what Founder Ellen Bennett refers to as the company’s “special sauce.” One example is a two-tone silicone spatula, which Ellen describes as a “hard nut to crack,” but worth it to “bring some color and identity to a product that’s not just your basic spatula.”
