Grocers Challenged to Raise Private Brand Profiles

Following 2022 when sales of private brand products saw strong growth in overall dollars, grocers said they want to raise the profile of their respective own-brand assortments, according to a new report from Grocery Doppio. 

In the State of Digital Grocery Marketing: Unlocking Private Brand Growth, 85% of respondents said they plan to increase the number of private brand digital assets, with 83% planning to expand their private brand digital marketing campaigns.

Also notable, 77% of grocers plan to expand the number of private brand SKUs sold online. This topic is one that has been discussed with greater frequency as grocers and retailers look for ways to put their store brands in high profile online spots when shoppers are reviewing a grocers’ website or app.

While there is a desire to raise the profile of private brands, grocers will be challenged to do so given their dissatisfaction with their organization’s ability to produce meaningful digital assets and the limited resources many are planning to allocate to this effort.

Less than 10% of respondents ranked themselves as “extremely satisfied" for type (9%), quality (9%), and number (6%) of digital assets. While very few grocers are “extremely satisfied,” about a third each are “satisfied” for the key categories of quality (38%), type (35%), and number of digital assets (26%).

Additionally, 63% of grocers said they have no plans to increase their private label marketing budget over the next 12 months.

With a majority unwilling to increase allocated marketing dollars to their store branded products, how grocers raise the profile of these assortments will be closely watched throughout the year. The growth in consumer demand for private brand products over the past year has come mainly from shoppers seeking lower-priced alternatives in an effort to make ends meet, not from additional grocer-driven marketing efforts.

The past year saw many grocers expanding their private label assortments, with some such as Kroger noting the positive impact the effort had on revenue growth. 

To raise the profile of private brands, the report noted that grocers cannot rely on traditional marketing approaches and need to develop digitally powered marketing strategies designed to connect with customers when, where and how they want to shop.

And, based on figures from the report, there is a great deal of room to grow. For example 97% of grocers said they use marketing emails to market national brands, compared to 32% of grocers that utilize the same tactic to promote private brands. Additionally, 91% said they use internal web or app search results for national brand promotions compared to 41% that use the same digital tool to push their private brands.