by Perry Seelert, Co-Founder & Strategic Partner, Emerge
Why COVID is providing a unique opportunity for Private Brands
From a shopping point of view, COVID has forced many consumers’ hands. They are buying many categories based upon “availability”, without the usual abundance of choice, often finding their regular, goto brand is simply not there. This has happened throughout the store as we know, in paper, meats, frozen, home care and many more. And, none of us know what the impact of a COVID phase 2 could be, with winter coming, university holiday breaks and more consumers spending time indoors.
Within many categories private brands has been the only game in town and there’s been a captive audience.
The questions for the Private Brand industry, is what is the “stickiness” of these forced decisions, are there certain categories where consumers are more likely to revert back to the brands they regularly buy, and what is our role in converting the “experimenters”?
Do You Know Your New Users?
There is a saying that “ignorance is bliss”, and my greatest fear is that Private Brand marketers will succumb to the bliss of the moment. We are all cheering the success of greater own brand sales, but we still don’t really know how loyal and long-lasting these consumers will be. Don’t be too blissful.
Take this time to invest, and explore who your new users are exactly. Use the retailer’s own data to zero in on these new experimenters, utilize omni consumer panels, use credit card data, employ digital media tracking tools and find out who they are.
Here’s a practical example. Kroger launched an incredible and innovative line of Jerky under their Private Selection brand, and some of their flavors/types like their 24 Hour- Marinated Carne Asada traverse into other categories like cooking sauces. There has been a tangible bump in the Protein Snacks segment since the onset of COVID-19, so for the Carne Asada experimenters who are trying it for the first time:
Who are these first-time users?
Did they come from another CPG brand like Krave or are they incremental?
Did they come from a different channel/retailer? For instance, Costco too, was one of the first innovators in this category with their Kirkland Signature Premium Steak Strips.
Another key question for Kroger is if I can lock these experimenters into Carne Asada jerky, can I extend this love into other Private Brand categories?
Reinforcing Good Experiences
So if I actually know who these Private Brand experimenters are and can pinpoint them, then what do I actually do with that information? Well, it is every marketer’s dream to know who is buying your product, but now the goal is to ensure that this is not just a “one off”, a one-time flirtation with the brand. It is your job to reinforce the experience, and what is hopefully a “good” experience.
Providing a well-timed follow-up coupon is the most blatant way to reinforce a first-time user, but experiences are always better if they are about the product, give you feedback and build a dialogue – this could be as an entrée to get a future discount on the product. Get them engaged in future new product consumer panels. Track their future purchase journey to see if they remain loyal. Learn about how they used the product (maybe they bought it when they were going camping) and what there passions are. We have to dive into these experiences in a somewhat molecular, more engaged fashion in the future, because now-more-thanever the data/insights are all at our disposal.
P&G’s Stubbed Toe
Another catalyst to Private Brand’s growth during COVID has been the “stubbed toes” of many large CPG companies, discontinuing supply to leading retailers because they were simply overwhelmed. In fact, it became so obvious for months that companies like P&G couldn’t keep up with supply that they ran “apology” television ads in many of their categories.
So another important question along with how to convert the Private Brand experimenters, which is a consumer led question, is how to collaborate with retailers from a trade point of view to address the opportunity. Because let’s face it, many retailers have a bad taste in their mouth from the CPG manufacturers who didn’t treat them as priorities.
If you are a Private Brand manufacturer you should be thinking ahead, as to how to collaborate on the future-scoping of the category. Does a retailer need a bigger section to accommodate the category in the future, and what should happen to the planogram, should it accommodate Private Brands to a greater degree and how? If you can play a role in these decisions, it allows you to occupy a truly strategic position with your retail partner.
The COVID story is still playing out globally, and how it affects consumer and retailer behavior is a once-in-a-lifetime event. Use it now to convert the Private Brand experimenters, engender their loyalty, and in parallel, work with the retail trade to ensure that you are playing a role in mapping out the category of the future.
Perry Seelert is retail branding and marketing expert, with a passion for challenging conventional strategy and truths. He is the Strategic Partner and Co-founder of Emerge, a strategic marketing consultancy dedicated to helping Retailers, Manufacturers and Services grow exponentially and differentiate with purpose. Please contact Perry at firstname.lastname@example.org