THE NEW NORMAL

5 KEYS TO PRIVATE
BRAND SUCCESS

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 T here are many unknowns about the industry post-
COVID-19 as well as what the “new normal” will truly look like
for consumers and retailers that have been affected by the
pandemic. What retailers – and specifically, Private Brands – can
prepare for is how they are going to address the fundamental
shifts in consumer shopping and spending behaviors because of
COVID-19.

Social Distancing: As states reopen, maintaining a safe distance will

remain a priority for consumers in their shopping and food consumption habits,
thereby making the home the center of eating and entertaining. In an April 2020
survey, nearly 60% of consumers report they plan to eat at home more and only
25% expect to eat out as frequently as they had before. With plans to eat at
home more, over half of shoppers report that they are seeking better mealtime
solutions.

Altered Brand and Shopping Behavior: Vast out-of-stocks forced

shoppers to change brands and preferred stores, with new competitors entering
the mix. In the past few months, 70% of shoppers reported purchasing a new or
different brand than they had pre-COVID, with nearly 30% reporting a positive
experience after switching brands and intending to maintain these purchasing
shifts. There has also been a greater shift to online shopping, with 49% of

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 consumers reporting they will shop online, versus 42% in agreement prior to
the crisis. As foodservice competitors have emerged as new competitors in the
grocery space, this also highlights an opportunity for grocery retailers to step up
their game.

Reduced Spending: We are entering one of the largest economic downturns

in history. Roughly 1/3 of US families have been affected financially, either with
job loss or a decline in salary; this is projected to hit 50% globally. 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.

Private Brands are predicted to experience continued growth. Even before

COVID-19, Private Brands presented favorable options for consumers. More than
half of shoppers reported they picked a store specifically for its Private Brand
offerings; 89% reported they trust Private Brands as much as the National Brand;
86% view Private Brand quality as equal or better than National Brands; 82%
consider Private Brands to be a better value for the money. Private Brand trial
during COVID-19, plus an impending economic downturn make the environment
even more favorable for Private Brand success. Retailers must ensure that they
have the basics of a Private Brand program covered (i.e. competitive prices,
great quality). However, they should also seize the opportunity to go the extra
mile and position and differentiate their Private Brand programs to build on this
favorable momentum.

THE FOLLOWING
ARE FIVE KEY 1. Prioritize Innovation
ACTION AREAS TO 2. Enhance Solutions
DRIVE PRIVATE 3. Educate on Benefits
BRAND SUCCESS
4. Deliver Inspiration
IN OUR WORLD’S
“NEW NORMAL”. 5. Lead E-commerce

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 1. Prioritize Innovation
While consumers may be taking a closer look at budgeting their spending, budgeting
does not imply only buying the basics. Consumers’ natural interest in what is new and
on-trend or diet-specific will continue to be present. Further, the need for innovation
across categories has been especially heightened as consumers express added
interest in making their daily routines and homemade meals more exciting. While, for
a retailer, focusing on innovation may seem counterintuitive in a time of economic
downturn, innovation will enable them to satisfy consumers’ needs and drive Private
Brand trial and loyalty. Key ways that Private Brands can prioritize innovation include:

Continue Planned Innovation: Private Brands must

continue to focus on addressing consumer trends that were
present before the pandemic. Consumer interest in plant-
based products or healthy snacking, for example, has not
waned; National Brands will continue to drive innovation in
these categories. In Private Brand product innovation there
are great opportunities for a retailer to differentiate its
banner offering as well as drive store choice.

Drive Innovation in High Growth Categories:

Retailers should also look at categories that expanded
during the COVID-19 pandemic as opportunities for further
innovation. Categories that relate to everyday cooking,
as well as value-added produce and salty snacks, have
experienced growth as consumer behavior has shifted
from eating on-the-go to all home-cooked meals. Further,
retailers should determine how Private Brands should play
within these categories – such as becoming a 100% Private
Brand solution – to focus investment and maximize impact.

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 2. Enhance Solutions
During COVID-19, foodservice outlets and small specialty markets emerged as
key solutions for consumers who were quickly transitioning to cooking all meals at
home. This at-home-meets-foodservice consumption behavior will likely persist post-
COVID-19 and represents an opportunity for retailers to invent, or reinvent, solutions
to bring restaurant-quality cooking to the home. Retailers can offer enhanced
mealtime solutions with Private Brands in the following ways:

Create New Foodservice-Comparable Meal Solutions: Retailers can create “made for
you” mealtime solutions that mimic foodservice offerings to make meal preparation
easier for the consumer. Retailers can create entirely new Private Brand solutions and/
or repackage existing products and sell them together. For example, by using existing
center store products from a Private Brand program and
pairing it with a fresh protein, vegetable and dessert
option, a retailer could offer a new “meal kit”.

Forge Partnerships with Local Businesses: Retailers can

bring the act of “going out” into the grocery store. By
teaming up with restaurants to provide meal solutions both
in stores and in restaurants, retailers can leverage the
consumer desire to go out, while making it easier and safer
to create a restaurant-quality meal at home. This retailer-
local restaurant partnership can be an exclusive offering
(like a Private Brand) or even co-branded.

Promote Solutions with Creative Merchandising:

Create in-store displays or online pages where Private
Brand products are displayed together. This act of curation
makes it easier for consumers to get the components they
need to bring the meal to life.

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 3. Educate on Benefits
While shoppers may still be on a budget post-COVID, they may also desire a return to
a sense of normalcy when shopping for groceries. With a likely increase in promotional
activity around National Brands, consumers may want to trade back, unless they find
a lasting value in shopping Private Brands. Retailers’ Private Brand communication
efforts must center around the benefits of Private Brands, including:

Emphasis on Quality: Retailers must educate consumers on the benefits of Private

Brands beyond price. While consumers may have initially turned to Private Brands
from budgeting constraints, it is the quality of these products, as well as the breadth
of assortment, that will drive repeat purchase and brand loyalty. Retailers must
continually inform consumers of these Private Brand benefits.

Emphasize Private Brands as Destination-Worthy: Retailers

should emphasize the unique features and innovative items within
their Private Brand program – and further, that their Private
Brand program was built, and is continually enhanced, to reflect
consumer needs and interests specific to its market. Retailers
must fully take credit of this fact and broadcast this uniqueness to
consumers via in-store and online marketing and merchandising,
as well as communicate that their Private Brand program can
only be purchased at their banner. Simply promoting a claim of
exclusivity is not enough to emphasize how special and unique the
program really is.

Emphasize Savings: Price is still a key benefit of Private Brands.

Retailers that provide targeted coupons for products in categories that consumers are
already purchasing (or adjacent categories) is a way to drive repeated Private Brand
purchase as well as trial.

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 4. Deliver Inspiration
Even as stay-at-home orders lift and non-essential businesses re-open, consumers
are likely to continue a more home-based lifestyle and will be looking for guidance on
ways to celebrate holidays, birthdays and dinner parties at home in smaller groups.
This provides retailers with an opportunity to elevate their Private Brand programs
from delivering the basics to delivering inspiration. Private Brands can deliver
inspiration through:

Private Brand-Led Recipes: Deliver unique Private

Brand recipes and events that are easy, fun and
encourage consumers to create at home. Recipes
could include ingredients that consumers may
have stockpiled during the height of the pandemic
combined with items from their weekly shopping
trip to elevate the basics and create inspiration.
Recipes can also cater to various cooking
levels – beginner, intermediate, advanced – to
accommodate all types of at-home chefs.

Engaging Beyond Recipes: Retailers can also

extend beyond recipes to create additional
touchpoints with the consumer. Distributing unique content, such as online or live
streaming cooking classes, will create even more opportunities to engage and inspire
consumers with a Private Brand program and banner offerings.

Private Brand-Focused Events: Create unique events or activities that help consumers
remain inspired and feel included as they look for new ways to entertain themselves
and others in their household. Event ideas include family activities, holidays-at-home
features and more. Private Brands can be a primary element of bringing these events
to life.

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 5. Lead E-commerce
Consumers have flocked to and continue to use digital shopping services in massive
numbers as they reduce their exposure to others outside of the home. Even if
consumers resume more of a pre-pandemic style of shopping, it is likely that they have
reaped the benefits of at-home delivery and curbside pickup and will continue to use
such services.

PRIVATE BRANDS HISTORICALLY HAVE NOT BEEN WELL REPRESENTED ONLINE

AND OFTEN GET LOST IN DIGITAL FORMATS
Retailers should take advantage of this new online shopping behavior and put
Private Brands at the forefront of their digital solutions. This involves:

Dedicating Online Space to Private Brands: Give Private Brands space on all digital
platforms to communicate their message, promise and benefits beyond price. This is
the only platform a retailer has with unlimited space, so it should be an information-
rich resource for the consumer.

Link Private Brand Solutions for Consumer Needs: Private Brand assortments should
be presented as solutions to various needs a consumer might have, from dietary or
lifestyle needs to recipe requirements. Tagged content and products as well as easily
identifiable icons are key ways to link Private Brands to consumer needs. Curated
lists on online storefronts, blog posts from store nutritionists, and support from other
online resources can bolster these offerings.

Lead Private Brand in Search: Ensure Private Brands are optimized in digital search.
Merchandising is just as important in a digital setting, where Private Brand should
be prioritized in the first results when a category or product is searched. Also, Private
Brands should be used as suggestions for substitutions for out-of-stocks if shoppers
have National Brands in their carts. Other suggestion options while shopping include

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 recommending other Private Brand categories based on their cart or past shopping
behaviors.

Utilize Private Brands to Promote Adoption of Digital Services: Consider promotional

tactics to tie Private Brand purchase to digital services (i.e. earning free delivery or
shipping when you buy a certain number of Private Brands). Alternatively, use digital
services to promote Private Brand purchase. One example includes offering Private
Brand rewards for use of digital services.

PRIVATE BRANDS ARE WELL-POSITIONED FOR

CONTINUED SUCCESS IN THE “NEW NORMAL”.
BY FOCUSING THEIR PRIVATE BRAND PORTFOLIO ON THESE FIVE
KEYS TO SUCCESS, RETAILERS CAN DRIVE FURTHER BRAND
PENETRATION AND CULTIVATE DEEPER BANNER LOYALTY.

1. Prioritize Innovation
2. Enhance Solutions
3. Educate on Benefits
4. Deliver Inspiration
5. Lead E-commerce

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 For more insights and recommendations
for driving your private brand business,
contact us today.

Daymon.com

Sources:
Advantage COVID-19 Impact on the Grocery and Food industry
US Bureau of Labor Statistics
Daymon proprietary research

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