Above image from IRI.
Retailers that treat their store brands the way branded CPG companies do can gain share during a period in which inflation continues to impact shopping habits.
That’s one of the takeaways from a presentation last week by IRI that identified challenges and opportunities in food, beverage and non-edible categories.
Examples set by branded consumer goods cited by IRI fall under four Ps: packaging, promotions, placement and pricing.
“There is not just one private-brand consumer,” said IRI’s center store solutions principal Mary Ellen Lynch.
“In fact, nearly every household buys private brand groceries—whether they realize it or not.”
While private brands represent 17.5% of total shopper dollars, they continue to be over-represented in food and beverages—with 18.5% of dollar sales to 16.2% for non-edibles.
General food items have the highest household penetration (98.9%) while the biggest laggards are home care and beauty.
“Beauty is very close to the consumer,” noted Lynch. “It’s on-body, it reflects them and there’s a lot of lifestyle and brand support around national brands in those categories.”
With home-care items, consumer concern leans toward efficacy. “This is a case where store brands really need to understand that they have to communicate and demonstrate that efficacy and gain that trust of the consumer to help increase engagement.”
Among what IRI describes as “store-brand loyalists,” 54% have income under $70,000.
In some ways, they’re more engaged in the shopping experience than non-loyalists.
“In a nutshell, store brand loyalists enjoy shopping, they shop to win, they’re not overwhelmed by shopping, they pay attention to labels, they hunt for the best price and they have a budget,” said Lynch.
Non-loyalists “feel a little bit more overwhelmed about shopping and they’re likely using name brands to simplify their shopping.”
With promotion a key element to gaining and retaining private-label customers, Walmart emphasized its own brands in the walkup to Thanksgiving while offering Turkey Day basics at 2021 prices.
A similar program was run by Aldi, which inhabits the category of limited-assortment value retailers—frequented by 22% of shoppers.
Aldi put together a Thanksgiving shopping list and priced it at $30.
Other examples cited by Lynch of how retailers should call attention their own brands are Albertsons and Publix.
Albertsons promotes shopper-selected, Fresh Picks product awards—one example being Unicorn Cotton Candy ice cream.
At Publix, a customer-care team names its top private label products—many of which target celebrations and restaurant quality.
Two of Publix’ recent choices were red velvet cake and buffalo-style chicken breast dip.
Product quality does not go unnoticed, according to Lynch.
“I’ve actually seen chatter as I monitor different fan sites for different retailers and products.
“In one case, the fans from one retailer were actually recommending the store brand at a different retailer because at Retailer A, the product quality for the store brand had changed.”