Consumer buying habits are one of the many things that have been turned on their head by COVID-19.
Panic and the threat of extended lockdowns has sent sales through the roof for non-perishable goods like pasta and canned foods, with many shoppers abandoning brand loyalty in their quest to ensure their store cupboards are full.
With the initial stockpiling frenzy behind us, the questions are what does this mean for private brand lines right now? And how can retailers capitalize on any opportunities that the post COVID-19 era might offer?
For one, grocery shopping has ceased to be a leisure activity with any active impulse to try new products or taste new flavors. Instead, it’s been all about making sure we have what we need. The key must-haves are essentials — dry goods, canned goods, toilet paper — and shoppers have been buying in bulk for security of supply and to reduce the number of trips to store.
As a result, there’s little new product development going on at the moment. And rightly so. This is not a time to entice consumers into stores with exciting new products; it’s a time to make sure they have what they need on the shelf. However, that doesn’t mean that retailers should allow their private brand products to stagnate. In fact, there is an opportunity to encourage consumers to try private brand lines for the first time, thanks to the lower price point. At times of crisis, consumers are looking for affordability and availability, and private brand ranges can offer them both.
Maximizing the opportunity
The challenge is to maximize the potential of that opportunity. Availability is critical but quality cannot be compromised. For retailers, this means reaching out to new suppliers to ensure there is plenty of product on the shelf, but packaging must reflect the extended supplier base with new accurate labelling.
Leveraging trust in the store’s brand is also key for retailers. Many consumers that have traditionally remained loyal to national brands are also loyal to specific stores and now is the time for those retailers to leverage that brand equity through their private brand ranges. As a result, many private brand retailers are spending this time refreshing the packaging for their existing lines rather than developing new products. This can help to strengthen clarity and cohesion across the private label offering, while challenging national brands with a dynamic approach to packaging that appeals to consumers during the pandemic and beyond.
Responding to consumer needs
It’s important to note, too, that one of the core advantages that private brand retailers have over national brands is agility. Instead of investing in new product development, there is a trend for retailers to focus on new pack formats that directly correlate to the buying habits and pressure points we’ve seen during the pandemic.
Panic buying, stockpiling, a focus on store cupboard essentials and the need for affordable basics are all steering the private brand sector toward multi-packs and larger serve formats. Pack strategies that enable consumers to shop less often and make financial savings while eating heartily lie at the heart of a consumer-focused retailer response to COVID-19. Moreover, retailers’ ability to respond quickly and effectively to consumers’ needs will help to generate loyalty and private brand equity as a lasting legacy of this challenging period in people’s lives.
After the pandemic
At some point, things will return to normal and consumer choices will once again be characterized by want rather than need. But we will all be changed by COVID-19. Consumers will remember the retailers who were there for them with the right products and the right pack formats at the right price. Many will also have branched out beyond their normal grocery buying habits to try something new and some will be ready to make a permanent switch to private brand goods.
Matt Caldwell, USA vice president, client engagement, Equator Design.
Caldwell spent 13 years in-house at Aldi in senior sales, operational and buying roles.