In many ways, the circumstances of the last few years have been advantageous for private brands. The global supply chain challenges that have impacted national brands haven’t been as severe for private brands. This, along with the absence of outside retail partner pressures, has allowed private brands to be more selective about their innovation and focus.
Furthermore, private brand strategists have had more bandwidth to understand their shoppers and what makes them tick, plus what has changed in shopper behavior since the start of the pandemic. This has allowed the most innovative retailers to focus on measures of success beyond short-term margin or profitability.
Having witnessed up close the birth of some of the most game-changing private brands, I know that the strongest private brand strategies create and grow long-term shopper loyalty. And this is done through knowing shoppers so well that brands can consistently develop highly sought after and exclusive products, ones that shoppers would eagerly drive past competitors to purchase.
How do you generate that brand-loving commitment? I can recommend a few proven
approaches from my work with such brands.
Pursue a long-term loyalty strategy over one focused solely on margin
The increasingly chaotic supply chain and the quest for profitability have pushed many retailers to take more control of the ebb and flow of their supply chain. Private brands can be a good place to do this. However, strong brands have learned that their strategy has to be about more than profit. While private brands can arguably manage margins more easily than national ones, they shouldn’t let that dictate growth strategies. The trusted relationship with the shopper ultimately separates good private brands from the rest of the pack. Private brands often default to a “me too” approach without a loyalty-focused strategy, which may bring in short-term sales but won’t deliver a shopper’s lifetime value.
Be a student of your shoppers through advanced analytics
The best private brands use advanced analytics to set strategies, create target shopper profiles, and develop innovative new products. Using techniques like AI can empower them to know which product attributes to prioritize based on what matters most to shoppers. A gluten-free or dairy-free alternative, social responsibility, clean ingredients – these are all opportunities that can be illuminated through analytics. Beyond product attributes, private brands must learn about and respond to emerging shopper segments.
The biggest draw of advanced analytics is providing all parts of the innovation cycle with more advanced notice of these growing trends and segments. Having deliberate innovation plans in place gives brands a competitive edge. With prescriptive AI-powered by real-time data, private brands can answer questions like, “What is the latest health benefit or flavor that shoppers are after?” But it's not enough to identify that next big thing. Private brands also have to contemplate if it’s going to be big enough to matter and if it’s a fit for their shoppers, brand image and brand promise.
Leverage changing generational attitudes to build your private brand
In decades past, private brand often meant a cheaper, lower quality product. A national brand was associated with high quality, trust, and even household affluence. That dynamic has changed dramatically. Younger consumers now have far less affinity for national brands than the generations before them.
Thanks to the advances in quality, branding, and innovation, private brands are increasingly associated with savvy, smart shoppers. No longer is there the perceived tie to household income that existed in the previous generation. Shoppers come from all income brackets, simply seeking high-quality items that meet their needs. And I predict that the private brands – with their increasing command of advanced analytics and fewer supply chain challenges – will have the chips stacked in their favor, at least for a little while.