a person sitting on a table

How retailers can help ease holiday shopper hesitancy leveraging private brands

Julie Companey of Vericast says retailers have an opportunity to boost private brands with marketing tactics and get out in front for the holidays.

Once again, this holiday season will be different than in the past. Last year, many kept celebrations small and sacrificed time with extended family members due to concerns over spreading or catching COVID-19.

This year, thanks to the availability of vaccines and boosters, consumers fortunately don’t have to miss out on family dinners, parties and other holiday celebrations. However, despite desires to have a normal holiday season, people remain uncertain.

According to data from a recent consumer study by Vericast, only 40% think gatherings will be "back to normal" and 38% plan to host holiday gatherings this year. Among them, 65% will spend more than last year because they are gathering more often or with larger groups of people.

Adding to high levels of consumer uncertainty and hesitancy is the fact that this year’s Thanksgiving feast is on track to be the most expensive in history. As has been reported broadly in the media, inflation is impacting food prices now and into the foreseeable future. Wholesale prices climbed 8.3% in August year-over-year, the biggest annual gain since the labor department started calculating the number in 2010. As a result, consumers will be forced to pay higher prices on everyday items like meat, poultry, fish and eggs, for which prices have increased by nearly 6% since last year.

When prices on products bought weekly increase, consumers notice. In fact, 77% of shoppers are noticing higher prices at the store, and as a result, 53% are shopping at multiple stores to find the best price.

An Opportunity for Private Brands
With price pressures coming at the onset of the holidays, private brands are likely to see increases in sales and consumer adoption. Why? Historically, private brands are cheaper than national brands and almost half of consumers say that high prices drive them to switch brands. Further, research shows that due to ongoing pandemic concerns, about 75% of consumers are continuing to make changes to their buying habits and one in three have already switched to buying private brands during the pandemic.

The challenge for retailers now is that 10-15% of shoppers don’t actually know which products are private label versus a national brand. For example, only 30% of Kroger shoppers recognized Simple Truth as a private brand. Therefore, it’s critical that retailers advertise and promote their private brands to ensure trial and repeat buying at their stores.

Holiday Retail Strategies
With 62% of consumers planning to do more home cooking this holiday season, private brands have a real opportunity to get on consumer’s shopping lists, and there are several levers that retailers can pull to promote them.

First, retailers should offer added value to consumers by offering coupons and advertising of their private brands in weekly print and digital circulars, direct mail and digital media. Currently, fewer than 50% of retailers with digital circulars promote private label coupons and only a third offered online deals for store brands. Given price increases, coupons are more relevant than ever and 60% of shoppers are actively looking for more coupons, discounts and deals to offset higher prices. Not only that, but 40% said they feel more positively toward a brand or store that offers a coupon or discount.

Retailers should also consider elevating private brands’ positioning in both print advertising and on their websites. It’s no wonder shoppers get confused on where they bought a private brand, since on average only 14% of a retailer’s weekly print circular ad blocks promote them and as the Food Industry Association recently reported, only 20% of retailers feature private brands on their home web page.

This holiday season and into 2022, retailers must capitalize on the opportunity to grow market share by promoting their quality, assortment and category breadth of private brands. 

a person posing for the camera

Julie Companey is the director of client strategy for enterprise sales, grocery channel, at Vericast. She has over 25 years of grocery channel experience having worked in sales for a major CPG, including 15 years working for data and media suppliers to the grocery/drug/mass/dollar channels.

More Blog Posts In This Series