The millennials are coming! The millennials are coming – quickly followed by Gen Z’s! In fact, the nextgen impact has already arrived and they are kicking the boomers out of first place as the biggest consumer group. Kind of sadly, they are also telling them to take all of their old world brands and retail stores with them. This new generation sees two worlds: the old world and the new world. And, there you have it. In the eyes of this newly emerging culture, old world brands may include Ralph Lauren, Gap, Levi, Victoria’s Secret, J. Crew, A&F, Cheerios, Wheaties, Tide, Campbell Soup, Gillette, Macy’s, JC Penney, Neiman’s, Sears, and eventually Ford, Cadillac, and on and on and on and on, across all consumer-facing businesses. If you are one of these brands (and the list is much longer), you will be “grandfathered” (pun intended), shunned and left to die a slow death – like what already has started to happen to the Gap and Levi, Sears, A&F, many P&G brands, Campbell Soup, Heinz ketchup and others.

These old world brands, many of them once powerful icons, revered by the millennials’ grandparents, parents and even older brothers and sisters, are “so not cool” to this new generation. They don’t want “hand-me-down” brands, popular in the last century. They want new, special, different, experiential, sustainable, healthy, communal, co-created, shared, swapped, pre-owned, charitable, personalized, small, exclusive and never even heard of by their parents and grandparents. Indeed, they are, and will continue to seek and drive a new world of brands and retailers. And, it’s not only due to their wanting “new” and to create their own world, so to speak. It’s also due to the fact that they can because of the overwhelming amount of choice, and the proliferation of more new brands, more often, on almost a daily basis.

In the old world, the pace of new brand launches was limited due to the enormous capital investment and the time required for R&D, product development, packaging and business model design, marketing and distribution. In the new digital world, there are virtually no barriers to entry and the time and investment required to scale the business in the low cost digital world is minimal, particularly when investors don’t care about profits. The new world-funding requirement is top line growth. Also fueling the daily cascade of new brands is the entrepreneurial energy among this younger generation, (in many cases because of the lack of jobs available). Finally, their business headquarters is wherever they want it to be – never getting out of bed can be a reality. Almost every operating function can be outsourced.

So, it’s the launch of a thousand branded “speed boats” a day. And because of the almost free digital marketing and communications infrastructure of social media, bloggers and influencers, SEO, YouTube, algorithms and machine learning, these speed boats scale in days and weeks vs. years of brand building in the old world. And they don’t have to make any money. Also, as I’ve said before, my naysayers’ line of “nine out of ten will not make it,” while true, there are thousands of “tens” across thousands of product and service categories. And if you add up all of the rapidly growing “ones” that do succeed, as Warren Buffet would say, “you’re talking real money.” In this case, I would say the big old world massive brands and retailers are staring at thousands of speedboats nipping away at their massive share of market. Thus, the future will consist of a new world of an infinite number of finite (fragmented) market niches, being served by an infinite number of finite new brands and retailers. The old world brands and retailers will be “grandfathered,” withering away until one day the lights go out.

Providing some evidence that the “grandfathering” of the old world is beginning, according to research firm, Catalina, 90 percent of the top 100 consumer-packaged good brands, experienced a decline in market share in 2015. And it continues. Local and private brands, with all of the aforementioned millennial values baked into the brand, so to speak, are popping up all over the place. A Booz & Company study analyzed the food and beverage industry and found that small players (those with sales of less than $1 billion) are outperforming the competition in 18 of the top 25 categories, including the largest and most consolidated ones, such as bakery, dairy, snacks, and ready meals. In packaged foods and beverages, small brands grew revenue about three times faster than the overall category. Private brands account for over 30 percent of supermarket revenues. Trader Joe’s are near 100 percent.

In the fashion industry, a survey conducted in 2015 by LIM College, specializing in business and fashion, found that 45 percent of millennials say, “nothing can be done” by fashion brands to retain their interest. Another more recent survey among millennial students at FIT (Fashion Institute of Technology), revealed a list of favorite new fashion brands, most of which the boomer and Gen X generations never heard of. In the category defined as athleisure were the following brands: Bandier; Outdoor Voices; Fitbox; and Aday. New brands cited for quality and transparency: Everlane; M Gemi; Dstld; Oliver Cabell; and Vrai and Oro. The American Giant brand was given credit for being made in America. And tech/new generation brands such as Combatant Gentleman, Trunk Club, Bonobos, Fashion Stork and Bombfell were also considered hot new brands.

If You Can’t Beat Them, Acquire or Copy Them

Time is now the enemy for the old world brands. The thousands of growing speedboats are methodically eating share of the old market brands. In this techno-fueled meteoric new world, evolution won’t work. There is no time left.

So, if you can’t beat the speedboats, then acquire or copy them, or lease space to them if you are a retailer. The old world brands should view the investor funded digital “speedboat” pool as a free incubator to pluck out the one out of ten that proves to have greatest scalability.

Campbell Soup acquired Bolthouse Farms, Plum Organics, Kelson Group and Garden Fresh Gourmet, all focusing on the younger generation’s desire for healthier, non-processed and organic food. All four only account for about $1.2 billion in sales, or roughly 15 percent of the business, however they see major growth potential from these speedboats, as their “grandfathered” Campbell Soup brand continues to lose share.

Unilever acquired Dollar Shave Club for $1 billion. The “new world” digital native brand launched in 2011was an instant hit among millennial males as a value priced subscription, direct to consumer model. It reached a valuation of over $500 million when Unilever acquired the brand. Unilever will wisely keep the brand autonomous under its founder Michael Dubin, allowing Dubin to continue to steal share from “old world” giant Gillette.

Recently Unilever also bought an upstart condiments brand; New York based Sir Kensington, for around $140 million, a speedboat they are directing right at the heart of your grandfather’s brand: Heinz. Already, Sir Kensington’s barbeque sauce, named Sweet Baby Ray, stole the number one market position from Heinz in 2010 and grew to over $300 million in sales in 2015, to Heinz volume of around $100 billion. They attribute all of Sir Kensington’s products’ success to better, more organic ingredients.

While I cannot imagine Coca-Cola ever withering away, it’s apparent that their marketing wizards realize that perhaps Coke’s pace of growth will slow against upstart brands appealing to a younger market. Recent acquisitions include Glaceau, an enhanced water, Fuze, a vitamin-enriched beverage, and a few other specialty drinks including Odwalla, Honest Tea, Innocent and Zico. I, for one, have never heard of any of these brands. Guess who doesn’t care? Coca-Cola.

Walmart leapfrogged over its e-commerce disadvantage and took a shortcut to the many years it would likely take to catch up to Amazon (and the risk of possibly never catching up) by acquiring Jet.com for $3.3 billion. Overnight they gained great e-commerce skills under the leadership of Jet.com founder Marc Lore, as well as fulfillment infrastructure, new and higher value products, a younger consumer segment and revenues. Jet.com escaped a funding slowdown, gained Walmart’s deep pockets and all of a sudden Lore can look forward to a head-on battle with Amazon much sooner than he could have on his own.

Not only is Walmart catapulting itself into the digital age, it’s clear they are committed to luring the next gens into their brand as well as directly attacking Amazon. As reported in a recent TRR article, “Walmart Acquires its Way Online”, they launched what they are calling Store No. 8, which Lore describes as incubation and innovation hub intended to “be the force driving commerce at a time when emerging technologies are influencing all aspects of consumers’ lives.” According to a Walmart spokesperson, new ideas can thrive outside the constraints of short-term process and profitability. “It will incubate, invest in and partner with early-stage startups, venture capitalists and academics to innovate in areas such as virtual and augmented reality, robotics, machine learning and artificial intelligence.” The earlier acquisitions of Shoebuy, Moosejaw, Modcloth and Bonobos are early stage startups that will now have the financial backing and innovative ecosystem needed to grow.

Then there’s the recent hire of Jennifer Fleiss, cofounder of Rent the Runway, who will head up Store No. 8’s first portfolio brand, Code Eight, as cofounder and CEO. Code Eight will develop one-on-one personalized shopping experiences.

Campbell Soup, Unilever, Coca-Cola and Walmart are iconic, powerful old world brand purveyors. The reason they are such giants today is because they grew under the leadership of visionaries and superior marketing. It is obvious through their acquisitions that they must pivot towards the new values and desires of nextgen consumers.

If you are an old world brand or purveyor of old world brands, take a page out of Walmart’s strategic playbook to take you successfully into the future, and to avoid being grandfathered, with your brand or brands slowly shriveling away to become relics of history.