Brand Hollowing: How AI Is Enhancing the Psychological Significance of Brands

Artificial intelligence is unlikely to drive brands out of the market (just yet). However, it can take away something even more significant: their importance in people’s lives. The fact that a look at the world of work, of all things, proves to be the key to understanding this development may seem unusual at first. Yet this is precisely where an exciting insight lies—one from which companies can learn a great deal.

AI produces a lot of output—and all too often, it's just more of the same

The more similar large language models become in their capabilities, the more their output begins to feel like a one-size-fits-all solution—whether it’s text, images, or video. The result: less brand differentiation and less creative diversity in communication. Generative AI makes creation so easy that it seems no one has to make an effort anymore to painstakingly work through and experience the creative process. Seemingly, because AI—so far—rarely ends up producing a surprising, perhaps contradictory, and precisely for that reason thoroughly fitting result. A result that makes a brand stand out.

When Uniqueness Is Lost – An Analogy to the Workplace

Here at rheingold, we’re familiar with this creeping devaluation from a completely different field: the world of work. When we presented the study “AI and the Future
s of Work—A Stress Test for Leadership and Collaboration” last year in collaboration with the Randstad Foundation, hardly anyone was familiar with the term “job hollowing.” Now, it’s a constant topic in public debate. It refers to the silent erosion of work—even when you go to work every day, complete your tasks, and get paid monthly. What’s lost is the feeling of contributing something unique with your own skills.

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For the study, we conducted 32 two-hour depth psychology interviews last year and surveyed a representative sample of 1,015 working adults. The results surprised even us: 72 percent of respondents viewed AI as a source of support in their daily work, and 78 percent even saw new opportunities. There was a high level of approval, especially when routine tasks were taken off their hands as a first step, and small hacks suddenly made work life easier and more productive.
Even back then, it became clear in the qualitative interviews that many employees initially approached AI with remarkable composure. They emphasized the relief it brought to their daily work or described AI as a helpful tool.

Subconscious Fears of Being Replaced

From a depth psychological perspective, however, it becomes clear that this euphoria or ostentatious indifference often serves to keep unconscious fears of being replaceable and of losing one’s significance at bay.
This development has accelerated rapidly. AI is gradually taking over even those tasks that many were once proud of—writing texts, developing ideas, and analyzing connections. Companies are laying off employees on the grounds that AI performs tasks faster and better. The diligent helper is increasingly morphing into a superhuman competitor, and what was still unconscious a year ago is now painfully coming to the surface: Will AI cause me to lose my uniqueness—the personal touch with which I have left my mark on the world so far?

Can AI Threaten Brand Identity?

This dynamic doesn’t just affect employees. If AI can change the psychological significance of work—why should it stop at brands? Our studies over the past few months show that the increasing use of AI has very concrete effects on brands!

The more powerful AI becomes, the easier it is to replicate functional product benefits. A packaging design, a campaign idea, a data-driven product innovation—what used to require years of experience and expensive creative resources can now be created in days, sometimes in hours. This is fundamentally changing the competitive landscape—and the way marketers manage “their”
brands as well. Rapid changes; fast-paced, “automated” campaign development; innovations simply because they’re technically feasible—often, key questions of brand management seem to be overlooked. Namely, whether and how this helps the brand, fits with its identity, reinforces its strengths, expands its relevance and significance, and highlights its uniqueness.

From Job Hollowing to Brand Hollowing

At rheingold, we use the term “Brand Hollowing” to describe this pattern: the gradual erosion of a brand’s psychological autonomy. It remains visible on the shelf, in the feed, and during commercial breaks just as it always has—but it no longer resonates. And in the long run, this causes its special significance in people’s lives to crumble, piece by piece. Job Hollowing attacks the identity of work; Brand Hollowing attacks the identity of brands.

In our interviews, very few employees reacted calmly to the threat to their professional identity. Some defiantly emphasized their own irreplaceability. Others gleefully listed every mistake made by AI. Still others had long been using the tools intensively but hardly spoke about it, instead placing particular emphasis on their own performance. Three strategies, one common core: the desire to preserve one’s own value.

When Brands Act Like People

Some brands act like that coworker who loudly proclaims his indispensability: They emphasize tradition, heritage, and their “Made in Germany” label—without there actually being any real, tangible difference or added value for customers behind it. Other brands act like the staff who gleefully list every AI blunder: They deliberately position themselves as “human,” “handmade,” and “not off-the-shelf”—a claim that holds up only as long as no one looks too closely. And then there’s the third, silent approach: brands that have long been using AI in their production—for content, design, and in some cases even product development—but prefer to remain silent for fear of being perceived as less authentic. All three reactions share the same blind spot: they’re fighting to assert their relevance rather than actually redefining it.

Performance that can be replicated hardly sets a company apart anymore

Companies and marketers are on a rescue mission. As the functional edge shrinks, there are more product variants, more features, and a higher volume of communications. The hope is that more output will lead to greater differentiation. Often, the opposite happens. Features that can be easily copied offer little in the way of differentiation, no matter how many are offered. Given the ubiquity of AI, competition is shifting from function to meaning. Those who have nothing to offer in this area will ultimately end up producing nothing but more of the same.

What makes brands strong also makes people irreplaceable

Our study shows where employees experience a sense of self-efficacy despite AI: in situations where their personality is valued. Empathy, attitude, judgment, the ability to correctly assess a complicated situation—none of these can be easily standardized.
A similar mechanism applies to the brands in our studies: As copying becomes easier, the importance of a brand’s psychological function grows. Brands reduce complexity in everyday life and when shopping; they build trust, provide guidance, and offer instructions on how to tackle everyday tasks. How to do laundry, how to plan dinner, what kind of atmosphere to create when celebrating and drinking with neighbors, how to deal with life’s risks, how to approach mobility, and so on. The strategic question for brand managers is thus shifting: away from the question of what their own brand does better than the competition, toward the question of what significance it holds that simply cannot be copied.

The Implications for Market Research

This shift has implications for market research. If functional differences can be replicated at will, it is no longer enough to simply refine the product and its messaging. Companies must understand why people trust a brand in the first place, what emotional role it fulfills in their daily lives, and what role it actually plays in their lives.

Incidentally, this is where the strength of qualitative, depth-psychological market research lies: it reveals what cannot be gleaned from click paths and AI analyses—the psychological core of a brand, its roots in people’s needs, desires, and the stresses of everyday life. Only this understanding makes it possible to develop a brand in such a way that it remains distinctive even in a world shaped by AI.

A psychological question, not a technological one

The public debate on AI is predominantly framed in technological terms. Our studies—in both HR and branding—suggest otherwise: The real shift is psychological in nature. AI is transforming work processes and, with them, people’s relationship to their work. The same principle applies to brands: The easier it is to replicate a brand’s functional benefits, the more its psychological significance determines its success. After all, a technological edge is always temporary; emotional and creative elements can offer lasting uniqueness and relevance.

Brand hollowing is, therefore, a trend that will very soon reveal which brands are becoming interchangeable and which ones will maintain a firm place in the lives of their customers.

This article first appeared on marktforschung.de