Starting with the pandemic and the move to work from home, there has been a major shift of purchasing in the grocery channel as consumers everywhere were forced to adjust their lifestyles. While socially distanced shopping in stores with online purchases for curbside pickup and home delivery have increased, more than 90% of grocery purchases still happen in-store. Combine that with consumers also looking to save a few bucks and private label sales continue to thrive.
Moving forward, it will be important for grocery retailers to personalize the shopping experience with a powerful digital platform and retail media network where their private brands can stay relevant outside of delivery apps such as Instacart.
Driving profitability through digitally connected shopping
Everyone is trying to figure out how to make digital grocery orders profitable. One good option here is for grocers to highlight their private label brands to online shoppers to increase their margins.
The online environment, especially in a third-party app like Instacart, represents a unique challenge for private brands as most online shoppers search for national brands. Players like Instacart are eager to push these national brands because they earn advertising revenue on each click.
If grocers bring this ordering in-house, they can use technologies like a personalized product recommendation engine to recommend private brand products as a cost-effective alternative to the national brand that can help to make delivery more profitable.
Just like in-store shoppers identify the bleach section by looking for Clorox, online shoppers often look for national brands first when starting their search. As placement and packaging are important for private label products in the store, it’s important to use digital tools to market a private label to online shoppers.
Some retailers take the approach that their private label products should have product pages that are even more complete and comprehensive than national brands. A strong product recommendation engine can help to drive national brand buyers to private label products.
Get in the retail media game
Retailers can leverage advertising dollars and retail media to push national brands and help to grow margins, taking money from Google and Facebook. They also have the power to instead offer private label products to shoppers. This puts the retailer in control of driving what’s best for their business.
A benefit of an enablement platform gives the retailer this choice. They don’t get that choice with a third-party delivery service like Instacart who is instead going to push for what’s best for, well, Instacart.