Q&A: How to win the digital shelf with private brands
Allan Peretz has been involved in the consumer goods industry for more than 20 years, 14 of which with Procter & Gamble, helping lead the brand’s direct-to-consumer e-commerce strategy and working closely with Walmart and Sam’s Club to help accelerate their e-commerce growth.
Peretz also spent time with First Quality Consumer Products, a private brand manufacturer of paper products and more, where he helped lead the Walmart relationship.
At P&G, Peretz led the consolidation of more than 25 different DTC e-commerce efforts across the United States, China, Germany, and other major markets including iconic brands like Braun and Oral B. At Bold Strategies, he now consults on e-commerce strategies. With footing in both world’s, private brand development and e-commerce, Store Brands interviewed Peretz on how important the digital shelf can be for store brands.
Store Brands: How have you seen e-commerce grown over the years?
Allan Peretz: More than anything, e-commerce has leveled the playing field at retail. For decades, the physical shelf and, in particular, shelf space decisions were the biggest driver of retail market share and this perpetuated stability year after year. That's no longer the case. New "upstart" brands can now dominate online with DTC and marketplace selling before ever having a major buyer meeting. Retailer brands can compete with highly advertised national brands by creating interactive content experiences online that win the sale.
SB: In your opinion, what’s the state of private label and e-commerce today? How well are retailers getting brands onto their e-commerce sites and driving shoppers to those pages?
AP: In e-commerce, you need to win two clicks — the "first click" is when the shopper goes into your listing from a search engine results page (SERP) and the "second click" is when they add you to the cart. Retailers ultimately control the SERP and most of them are doing what they can to ensure that their retailer brands are getting a fair shake. Some are using the search algorithm to drive this while others are using special ads or features to invite national brand buyers to learn about the store brand.
Unfortunately, though, most retailers are missing the mark on content and this is causing them to lose the "second click." More often than not, retail brand listings feature sparse, uninspiring copy and a couple of sad photos of the packaging. Power claims, video, compelling in-use images, testimonials, endorsements, and other staples of a good listing are, more often than not, missing.
SB: What are the hurdles facing retailers when it comes to promoting private label online?
AP: Retailers can create massive advantages for store brands online, but they need to proceed with caution in order to maintain strategic relationships. Increasingly, retailers will use their platforms as a source of additional advertising revenue. Amazon has already demonstrated this and is now a top three digital ads platform (along with Google and Facebook) — Walmart has also invested heavily in its media platform and recently relaunched it with new tools that are more in line with Amazon's approach. Who will all that advertising revenue come from? You guessed it: the top national brands. If those brands perceive that the retailer's platform is unfair, ad revenues will dry up quickly.
SB: What are the advantages retailers can exploit when pushing their private brands online? Private label is growing over national brands, how do they use e-commerce to further this pressure?
AP: Retailer brands have massive advantages since they control the platform. We recommend that they prioritize search, e-commerce content, ratings and reviews generation, targeted e-mail marketing, and subscription.
SB: Are there any retailers doing it well, what’s a good example of a private brand program being executed well on the digital shelf?
AP: Amazon's leading here, too, and has a wide range of retailer brands including Essentials, Elements, and Wickedly Prime brands, which play across a range of categories from cables, to baby wipes, to a range of Food and OTC products.
Products have outstanding content with power claims, strong A+ content, video, and more. In addition, information about product origin, ingredients, and testing is all included and made even more clear with visual support. Amazon uses on-platform ads to ensure that shoppers of traditional national brands become aware, over time, of these alternatives.
SB: What can supplier companies do to help retailers with their private brands online?
AP: Claims and content. Suppliers need to provide retailers with the legally-supportable information needed to show retailer brand shoppers that the product is not only sold at a good price, but is also a good value from a performance standpoint.
Retailers need to have the courage to use this information in their listings. Suppliers should also make truly great photography and product visuals readily available to retailers and to help with actual implementation of the content. If the manufacturer can't do this in-house, they should hire an agency to help. E-commerce is where the growth is and this investment will pay off long-term.