Pushing private brands in the new normal

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Pushing private brands in the new normal

By Aimee Becker, Daymon - 06/03/2020

Private Brands are seeing unprecedented sales during the COVID-19 crisis, with many asking if it will last or how to maintain the momentum?

While we have experienced this tremendous growth from new private brand trial — we cannot ignore that before COVID-19 private brands were seeing growth among shoppers as true brand solutions. More than half of shoppers said they picked a store specifically for its private brand offerings — 89% reported that they trust private brands as much as the national brand, while 86% viewed private brand quality as equal or better than national brands. As we think about the “new normal,” or life after COVID-19, we know that social distancing, increased digital engagement and the changing economy give retailers the opportunity to continue to drive consumer engagement with private brands in a new way.

Social distancing will continue to impact shopping and food consumption habits, making the home the center of eating and entertaining. With nearly 60% of shoppers reporting that they plan to eat at home more often, and only 25% expecting to eat out as frequently as they did before, shoppers will be seeking inspiration and meal solutions. 

To engage shoppers, and to make their daily routines and homemade meals more exciting, retailers need to continue driving innovation across categories that will matter for consumers in this new reality. First, retailers should continue product development in trend-driven categories that were seeing growth pre-COVID, such as plant-based or healthy snacking. Even with tighter budgets, consumers still have these needs. Continued innovation is necessary to ensure you keep pace with the competition including national brands. Additionally, to these general needs, retailers must also focus on newly relevant categories seeing high growth due to shifting consumer behavior from eating on-the-go to home-cooked meals.

The baking category, for example, continues to experience growth with consumers expressing newfound interest in experimenting with baked treats. Retailers can benefit from this baking surge by providing a range of innovative options for all baking needs. Other categories to drive innovation include everyday cooking solutions, as well as value-added produce and salty snacks.

At a minimum, private brands should receive dedicated space across digital platforms to educate consumers on their purpose and benefits beyond just items and price points.

As consumers seek to reduce their exposure to others outside the home, they have flocked to digital shopping services in massive numbers — with plans to continue this shopping behavior for the foreseeable future. Historically, private brands have not been well represented online and often get lost in digital formats. Retailers should take advantage of this new behavior by incorporating private brands at the forefront of their digital solutions. At a minimum, private brands should receive dedicated space across digital platforms to educate consumers on their purpose and benefits beyond just items and price points. Additionally, private brands should lead in search and where possible link to solutions or shopper needs. This will illustrate the program’s point of difference and drive connection with shoppers.  

Behind all this, we must remember that private brands play an important role in supporting our shoppers as they look to stretch their budget. We are, unfortunately, entering one of the largest economic downturns in history, with roughly one-third of U.S. families affected financially. During the 2008 recession, 76% of private brand categories experienced growth. During the COVID-19 pandemic so far, private brand sales have increased 34%,outpacing national brands. The value of private brands is resonating with consumers as they look for alternative solutions. 

While consumers will likely continue shopping on a budget post-COVID-19, they will want to retain a sense of normalcy by purchasing household favorites. Retailers’ private brand communication efforts must center around the benefits of private brands beyond just savings, such as better quality, unique offerings and innovative items. Retailers should also leverage private brands to inspire consumers such as through activities, demonstrations and other engagement opportunities beyond the products themselves.

Private brands are well-positioned for continued success in the “new normal.” By focusing private brand priorities on accelerating innovation, leading in digital solutions and reinforcing a value proposition with shoppers, retailers can drive further brand connectivity and sales, while cultivating deeper banner loyalty.

 

Aimee Becker is senior vice president, strategic advisory, at Daymon. Last week the consultancy launched a report on 5 keys for private brand success in a post-pandemic market.

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