When times get tough, we naturally expect established giants to weather the storm, but history tells a different story. It’s the underdogs — those brands that are smaller, scrappier, and seemingly less equipped — who often come out on top. But why? What makes underdog brands shine during economic downturns, and how can this insight be leveraged today?
Why underdogs win
It’s all about perception and relatability. In the midst of economic uncertainty, consumers don’t just tighten their belts — they become more discerning about whom they support. As Paharia et al. (2011) posit, people gravitate toward brands that reflect their own struggles and values. Underdog brands, with their stories of perseverance, grit, and the odds stacked against them, offer a sense of hope and empowerment that resonates deeply in recessions.
Take Apple in the early 2000s. Before it became a tech giant, it was the scrappy underdog fighting against Microsoft’s dominance. Apple’s “Think Different” campaign, launched during a financially challenging time, didn’t just sell computers — it sold the idea of rebellion, creativity, and overcoming adversity. This emotional connection with consumers, paired with clever marketing, allowed Apple to thrive despite the economic climate.
Emotional connection in hard times
Economic recessions hit consumers hard. People are anxious about their jobs, uncertain about the future, and hesitant to spend money on frivolous purchases. This creates a unique opportunity for underdog brands to forge a powerful emotional connection. They do this by framing themselves as the “little guy” fighting against the odds — just like the consumers they’re trying to reach.
During the 2008 recession, brands like Netflix and Airbnb were still in their infancy but managed to thrive by appealing to cost-conscious and adventurous consumers. Netflix, offering an affordable alternative to traditional cable, framed itself as a disruptor, allowing customers to take control of their entertainment at a fraction of the cost. Airbnb, on the other hand, allowed consumers to save money while traveling and earn extra income by renting out their homes. These underdogs provided not just a service but a solution to the financial hardships that consumers were experiencing.
The power of a good story
Consumers love a good story. And underdog brands have one of the most compelling narratives in the business world — rising from humble beginnings, surviving against the odds, and proving the doubters wrong. These stories resonate particularly well during recessions when consumers themselves are trying to overcome their own challenges.
Consider Warby Parker, a company that launched in the aftermath of the 2008 financial crisis. Warby Parker’s founders realized that eyewear was overpriced, and they saw an opportunity to disrupt the market. Their “buy a pair, give a pair” model, where each purchase helped someone in need, not only undercut the traditional eyewear business but also gave consumers a sense of purpose with their purchases. It wasn’t just about buying glasses; it was about being part of something bigger — a movement to make eyewear accessible to all. Warby Parker’s underdog story appealed to recession-wary consumers who were looking to make their money go further.
Agility beats size
Another reason underdogs succeed during recessions is agility. Large companies are often weighed down by their size, struggling to pivot quickly in response to changing market conditions. Underdogs, on the other hand, are nimble and can adapt more rapidly to new opportunities.
During recessions, this agility allows smaller brands to innovate and meet new demands more quickly than their larger competitors. For example, during the COVID-19 pandemic, smaller brands were able to pivot faster than large corporations to meet the new needs of a socially distanced world. Whether it was local breweries shifting to hand sanitizer production or boutique fitness brands quickly transitioning to online classes, these underdogs outmaneuvered the giants, who were often slower to react.
Authenticity is currency
In a world where consumer trust is at an all-time low, authenticity is one of the most valuable currencies a brand can possess — especially during a recession. Underdog brands, by their very nature, tend to come across as more genuine. Their success isn’t guaranteed, and they don’t have the safety net that large corporations do. This vulnerability makes them more relatable and trustworthy in the eyes of consumers.
Patagonia, the outdoor clothing brand, has long championed environmental causes. But during the 2008 recession, their authenticity shone through when they launched their “Don’t Buy This Jacket” campaign, encouraging consumers to think twice about making unnecessary purchases. It was a bold move, but it paid off. Patagonia’s commitment to its values resonated with consumers, leading to increased sales despite the economic downturn.
Lessons for today’s brands
So, how can modern brands harness the power of the underdog narrative in today’s unpredictable world? It starts with authenticity. Consumers are more skeptical than ever of corporate motives, and brands that try to fake their underdog status will be called out quickly. The key is to embrace transparency — be open about challenges and vulnerabilities, and show how you’re working to overcome them.
Additionally, brands need to be agile. The ability to pivot quickly and respond to consumer needs will be crucial in the coming years. Whether it’s adapting to new technology, changing consumer behaviors, or economic uncertainty, the brands that can move quickly and innovate on the fly will be the ones that survive.
Lastly, tell a story. A compelling narrative isn’t just about your products or services; it’s about who you are as a brand. Underdogs have an inherent advantage here because their story is already written — it’s one of struggle, perseverance, and eventual triumph. But even larger brands can tap into this by focusing on the human side of their business, highlighting the people behind the brand and the values that drive them.
The timeless appeal of the underdog
In recessions, people crave connection. They want to root for someone who reflects their own struggles and challenges. This is where underdog brands excel. By staying agile, authentic, and telling a story that resonates, these brands can not only survive economic downturns but thrive in them.
So, whether you’re a small startup or a large corporation, the lessons from underdog brands are clear: embrace vulnerability, stay nimble, and never underestimate the power of a good story. After all, when the going gets tough, it’s the underdogs who win.
References
Paharia, N., Keinan, A., & Avery, J. (2011). Underdog Branding: Why Underdogs Win in Recessions. European Business Review.
Gladwell, M. (2008). Outliers: The Story of Success. Little, Brown, and Company.
Grit: The Power of Passion and Perseverance by Angela Duckworth (2016).
Schultz, H., & Gordon, J. (2011). Onward: How Starbucks Fought for Its Life without Losing Its Soul. Rodale Books.
Keinan, A., Paharia, N., & Avery, J. (2010). When the Going Gets Tough, the Tough Go Pro-Social: Underlying Motivations Behind Consumers’ Responses to Recession. Journal of Marketing Research, 47(2), 215–229.
Collins, J. (2001). Good to Great: Why Some Companies Make the Leap… and Others Don’t. HarperBusiness.