Seth Godin recently wrote about badges:
“When your product becomes the badge for a tribe, you sell a lot of product… Brooks Brothers was the badge for a generation of grey-suited men. Che t-shirts are the badge for a cadre of activists…It’s not easy to become the badge, but it’s a worthy destination.”
Seth’s lesson here: badges serve as a signal for groups of people.
Intuitively, brands should build badges. It represents a way for a group of people to declare their affiliation to the world. Badges, however, have backfired for a new company trying to build its brand: American Apparel.
AA is an intriguing retailer. It is less than four years old and has quickly built its brand on a number of seemingly divergent elements: sex, organic, fair wages, vintage, and immigration.
Whether the company intended it or not, AA is the badge of hipsters. While lucrative for the hipster market, it has had negative externalities on the mainstream, eschewing potential customers that fear wearing the brand will lead to false hipster association.
These negative associations are nothing new; surely a banker would never wear a Che t-shirt. But the Che t-shirt has an incredibly large potential market: thousands of activists and millions of wannabe activists. I fear that AA might hit a revenue ceiling; the badge association is a fad, not a legitimate market segment with long-term growth. Wannabe hipsters will decline and anti-hipsters will mushroom.
I’ve noticed that AA moved some of its hipster-associated clothing to the back of the store, perhaps in an attempt to down-play the badge association. Regardless, AA needs some damage control, especially if it would like to continue growth in its 36 new stores opened this year.
Lesson: badges are great, but only when negative associations do not limit your market and destroy your brand.