Brands have always acted as shortcuts to reassure consumers of quality. When faced with a shelf full of overwhelming choice, for instance, customers could find comfort in picking out a marque they had heard of or seen on TV. But the Internet is changing our entire relationship with brands and disrupting what it even means to be a brand today.

As the Stanford marketing professor Itamar Simonson says, when quality was hard to predict, it made sense to stick with a familiar brand. However, now, with so much comparative product information at our fingertips “you can quickly assess the quality of things” so the benefit of loyalty is called into question. “Once I have the perfect information,” says Simonson, “I no longer need the shortcut”.

So does that mean in the “knowledge age” we’re living in that brands are dead, or, at least dying? No, I don’t believe it does. But it does mean that brand alone is eroding as an influencing factor in purchasing decisions today. If you want evidence of this, just look to Vizio – this virtually unknown TV manufacturer became the best-selling brand in America in less than five years with hardly any advertising.

Advertising still works for brands, but if people ain't talking in glowing terms on Twitter then it's an uphill struggle

While brands are not dead, to thrive now they have new challenges to overcome. The biggest of these is that “social proof” is replacing brand as a comforting crutch in a consumer’s decision tree and, as such, retailers in particular need to build this into the fabric of everything they do.

Social proof is when people look to others, especially those they aspire to be like, to give them confidence in deciding how to behave in a given situation. In the context of a retail environment, this means shoppers take their lead from other shoppers in deciding whether or not to make a purchase.

Imagine, for instance, deciding where to go for dinner one night for a meal with your friends. You might pass a restaurant with an amazing menu but if it is empty, and the one next door is full of smiling faces clinking glasses, it is human nature to be drawn to the latter; we’re persuaded that the busy restaurant must offer a better experience because we take on board the preferences of others in our own decision-making.

Quick, look busy!

Indeed, this psychological phenomenon is not new. Merchants selling carpets and spices many years ago understood this powerful persuasion principle: they used to pay confederates to act as customers so their stands looked busy. What is new is that we need to create ways to give consumers social proof in an increasingly transactional online world.

Innovation abounds online here. Peer recommendations have become a standard feature online, enabling us to find anything from hotel advice on Trip Advisor to tour reviews on Yelp to specialist sports equipment reviews on niche sites. Recent research has found that adding a single review to an ecommerce product’s detail page improves the conversion rate of that product by 10 per cent.

"Retailers and brands are starting to catch on to the brave new social world. Slowly."

Adding 50 reviews to a product can increase conversion by 30 per cent. Trendsetting brands like Amazon know this so they are incentivising their users to take the time to write reviews, elevating the social status of prolific reviewers with initiatives like its “Hall of Fame”.

Savvy brands are even tapping into the power of the social community to do their marketing for them; Patagonia, for example, populates its homepage with customer reviews, just as holiday brand Contiki does with customer-taken snaps.

Sites like menswear brand jackthreads.com even shows visitors how many people have previously viewed an item, how many have actually bought it and how many added it to their wish lists. Similarly, many brands have set up forums on their site where “super fans” often do the job of customer services (and, arguably, better) by answering newcomers’ questions about products.

The innovations that excite me most, however, are those that straddle the virtual and real world.

Bricks with your clicks?

Despite the fact that digital is fundamentally disrupting the way we shop and make purchase decisions, the vast majority of purchases will still be made in physical stores for the foreseeable future.  Frustratingly, retailers are largely failing to deliver social proof in the in-store environment where 91% of purchases are still made.

Successful retailers will seamlessly blend the online and offline worlds to capitalize on the wealth of information available digitally.

For some shamefully backward-looking retailers, their idea of social proof is still shoppers tussling over garments in store and seemingly-endless queues; but for the majority of increasingly demanding consumers, especially millennials, this kind of social proof is completely unacceptable.

Retailers and brands are starting to catch on to the brave new social world. Slowly. For instance, some retailers are now using digital hangers which display information about how many shoppers have bought the item, or “liked” it on Facebook. In other cases, it’s brands that are pushing retailers to innovate.

Like in the case of Nordstrom, which set up an area in a women’s fashion store highlighting the most shared items on social platforms such as Pinterest. The next natural step is electronic shelf tags, which can be instantly and cost effectively updated with relevant information such as reviews, bridging the gap between the online and offline crowds.

Another obvious progression is sales assistants armed with gadgets, which provide persuasive social and sales data.

I said earlier in this article that I don’t believe that brands are dead. It’s true. However, brands which don’t take account of this hugely powerful consumer trend – the growing desire for social proof – will meet their grim reaper soon.