This post was inspired after reading "Digital Brand Differentiation - 3 Frameworks to Follow and asking the question above.
Differentiation is required when we are faced with the chore of choosing. It works because it provides a focused benefit that we can internalize and compartmentalize as "that does this". So when we have "this" need we lean toward buying "that" product. It is a step toward branding.
The qualifier 'digital' raises some questions to consider - some apply to digital products others apply to digital tactics for analog products.
- What new dimensions are available upon which to differentiate 'digitally'? (Which old ones don't matter any more?)
- How does digital information access and transparency change the relative importance of 'being different' in the decision process?
- Are there categories where it is more/less important to be different because of digital? Why so?
- With the digital consideration set now being defined by the amount of time we invest, is it more important to be the first to be perceived as satisfying the basic need rather than doing it differently?
A counter argument to the differentiation argument was offered by Killian Branding in a post entitled ""Differentiate or Die" is dead. RIP, USP". That post concludes with the statement "Visibility is now more important than differentiation. Mission One: Get into the selection set." To paraphrase the logic, if you're not at the top of the list (Yelp, TripAdvisor, Google, etc.) it doesn't matter how you are different.
What makes digital different is that the consideration set emerges/contracts/grows over the decision process - it is no longer an all or nothing proposition of being in front of the toothpaste shelf or looking at Thai restaurants in the yellow pages. This would suggest that the emphasis on differentiation may rise/fall across the journey based on inferred intent.