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03/19/2021

Earning the trust of private brand shoppers of color

Phyllis Johnson of Catalina, a 2020 Top Women in Store Brands winner, says the retailer that digs deep to understand shoppers of color will earn their loyalty.

When I was growing up, my single mom with eight kids didn’t often buy private brands. I noticed at an early age that our grocery cart always had Tide and Clorox in it. I couldn’t understand why when there were less expensive options on the shelf.

I realized years later it’s because she trusted these products would work. She couldn’t afford to try a lesser priced brand for fear that it would not perform at the same level she’d come to expect and experience with name brands. Clean clothes for all of the kids and herself was not something she was willing to risk.

Today, industry studies show African American, Asian and Hispanic shoppers remain name brand loyal. But the pandemic and its aftermath have created a new opportunity for private brands to earn their trust. At the height of the lockdown in March 2020, retailer private brand sales rose 70-80%, which is 40% higher than brand sales compared to the prior year. Some of this was in no small part due to forced trial. But even when their favorite brand names returned to the shelves and supply issues stabilized, nearly half repeated their purchases. (Ultimately, the private brand industry grew 4.1% last year compared to 1.4% for national brands.) 

It’s likely private brand quality brought them back, not price. In the last half of 2020, name brands used pent-up marketing dollars to create near price parity throughout the store.  According to Catalina’s Buyer Intelligence Database, the price gap between name brands and retailer private brands shrunk on average from 23-28% in July 2020 to 17% today.

A combination of value and quality will continue to influence shoppers of color, but the best opportunity for growth will come from better understanding the diversity that lives within this customer base.

As 2021 unfolds, private brand retailers shouldn’t let the pandemic’s retail dynamic dictate their approach. A combination of value and quality will continue to influence shoppers of color, but the best opportunity for growth will come from better understanding the diversity that lives within this customer base.

Retailers sometimes see an incomplete picture of this diversity because of the limitation or access to enhanced or amplified shopper intelligence that goes beyond demographics and income levels. Could this be the reason why many of them open the same playbook to target all private brand shoppers with the same private brand message, offer or incentive?

Dig deeper into lifestyle needs
To craft a message that will resonate and motivate diverse shoppers to purchase private brands over time, you must know more about them. To drive loyalty and lifetime value, you need to better understand their lifestyles and which product attributes and ingredients they are seeking and why.

First, let’s look at “Gluten Avoiders.” For example. African American private brand shoppers spend 6X more than Hispanics and 2X as much as Asian Americans on gluten-free products. Although African Americans make up 13% of the U.S. population, they are only 1% of celiac disease patients. One health study noted the low rate of diagnosis could be due to a number of factors, from doctors who are less likely to refer them to a specialist, access to health care, or a low rate of African Americans participating in studies to detect the disease. The study also noted if celiac is considered a mostly Caucasian disease, then it is probably grossly under-diagnosed in other groups. Data indicates many African American shoppers are self-diagnosing based on symptoms they’re experiencing.

 With a more complete understanding of shoppers of all ethnicities, you can target them with specific health messages and information around the benefits and value of private brand product categories. You can also  encourage them to seek medical advice to properly diagnose any health issues and concerns. 

I challenge retailers to use their private brand platform to become an advocate of health concerns that affect various communities of color differently. For inspiration, consider how Dove has used its brand status and influence to co-found the Crown Coalition, which works to make hair discrimination illegal. After the bill passed in the House last September, the Coalition is encouraging shoppers to sign The Crown Act petition that is calling on members of the Senate to support anti-hair discrimination legislation. This is an important way for a brand to support a cause that affects a portion of their consumer base. If national brands can do it, private brand retailers can, too.

Personalize messaging to address health concerns
The pandemic has exposed the health disparities in shopper-of-color communities and has forced their health and wellness even more to the forefront. Our data indicates they are looking intently for ways to stay healthy. Leverage your private brand attributes and ingredients to communicate the benefits and value to all shoppers. Create a unique engagement and experience that shoppers can only get via your private brand banner and stores. 

Ultimately, begin using a new value equation as you seek to earn their trust. No longer are private brands solely about value and quality. Now value equals price, quality and personalization.

When you dig deeper to better understand the diversity of your private brand shopper of color, they will reward you with loyalty. Be bold and create a deeper connection with these shoppers by seeing and acknowledging their diversity and offering them value products, engagements and experiences that address their unique needs.

A woman's face

Phyllis Johnson is senior director of own brands at Catalina USA. She recently was named a Top Woman in Store Brands for 2020.

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