With shoppers continuing to switch to less-expensive brands and private label products, retailers of all sizes are now tasked with marketing and promoting their products in new ways.
In a new blog post, 84.51°, Kroger’s retail insights firm, detailed how retailers can best market brands, including private labels, during uncertain economic periods. In 2022, private label products were up double-digits, reaching nearly $230 billion in sales.
The blog details five objectives for CPG marketers in order to make their brands and products resonate with consumers: Know the category landscape, understand retailer goals, design personalized offers, amplify the impact and measure and optimize results.
“In an inflationary environment it is crucial for private label brands to understand their category landscape,” Michael McGowan, SVP of Commercial Insights & Loyalty at 84.51°, told Store Brands. “If consumers are switching brands, it is a great opportunity for private brands to capitalize on acquiring new consumers. As of December, 55% of consumers reported switching to a lower cost brand as grocery prices increased.”
However, not all categories have equal levels of private label penetration, McGowan said, and therefore should have different marketing strategies.
"However, categories differ and, in some categories, consumers may be buying less often or moving out of the category completely," he added. "Each category may require a different strategy. Using data & insights to better understand how consumers are behaving in a category allows for tailored, more effective business plans. "
According to 84.51°, personalized offers help acquire and keep new private brand customers, adding that while coupons are an integral part of the shopping experience, personalized coupons are a key differentiator.
“Personalized offers can help private label brands engage their consumer base by giving shoppers the type of value that resonates with them the most,” said McGowan. “An uncertain economic environment creates an opportunity for private label brands to reacquire lapsed buyers and engage them with relevant offers that pique their interest. In addition to the value for customers, private label brands can also leverage personalized content to drive key messages with customers around the products they are offering. We find personalized content and offers have great response rate and feedback from consumers, often leading to more consistent purchases.”
The full blog post can be found here.