A recurring theme throughout the ongoing COVID-19 pandemic has been the acceleration of online grocery shopping, but just how well have private brands fared?
According to the retailers and manufacturers surveyed by FMI - The Food Industry Association, for its latest Power of Private Brands report released in advance to Store Brands, 67% of the private label assortment was made available online to shoppers during 2020; 14% of private brand sales were done online; and private brands grew 73% through e-commerce during the year.
It’s clear there’s a foundation of success already in place by retailers to promote private brands to the growing number of online shoppers. However, FMI’s report also noted a lack of private brand measurement online by retailers and some areas where branded CPGs remain out in front of owned brands.
Doug Baker, vice president, industry relations at FMI, told Store Brands that what surprised him most in the research — 61% of food retailers surveyed said e-commerce, including home delivery and click-and-collect Internet sales is considered “a major opportunity for private brands” and that percentage was even higher for companies already actively underway with private brand e-commerce programs.
The report also found that more than half of the respondents said “they are boosting private brand strategies for e-commerce,” including these main tactics that were put in place last year:
- 39% said promoted private brands through email promotions and digital circulars;
- 33% leveraged search engine optimization;
- 33% put a priority on promoting store brands via online brand pages and storefronts..”
An effort to focus on those areas could be in response to where national brands seem to be out in front of private brands in grocery e-commerce.
“The study found that national brands continue to engage consumers in ways private brands have yet to fully utilize,” Baker told Store Brands. He highlighted 10 areas where private brands “fall short of manufacturer brands in digital real estate,” he said, such as on the homepage, where only 20% of food retailers that were analyzed promoted private brands. Additionally, just over 4 in 10 food retailers included multiple product images on private brand product detail pages, and about half of food retailers included banner ads on product listing pages and search pages — but only 20% of the banner ads promoted private brands.
Those findings in the report specifically came from consultancy FitForCommerce, which mystery shopped 25 food retailers’ e-commerce sites and identified 10 opportunities for food retailers to effectively target consumers with private brand offerings. The FMI report also includes data from a consumer survey from FMI and The Hartman Group, a survey of food retailers and manufacturers, interviews with senior private brand leaders, and e-commerce data from IRI.
Other key findings from the robust report include ways to leverage search optimization for store brands, IRI’s e-commerce sales numbers for the food industry as a whole (up 25% for 52 weeks ended Aug. 8) and in-depth demographic details. For instance, when shopping online, more than three-fourths of shoppers use digital coupons, and further broken down, 80% of Gen Z/Millennial shoppers leverage coupons compared with Gen X shoppers (78%) and Boomers/Mature shoppers (63%).