Private Brand Performance Leaves Grocers Unsatisfied

The rising cost of goods has made it increasingly difficult for consumers to stay within their grocery budget. To help customers keep shopping baskets full while simultaneously improving market share, grocers are increasing their private brand offerings and digital marketing efforts.

According to Grocery Doppio’s newly released “State of Digital Grocery Marketing: Unlocking Private Brand Growth” report, 77% of grocers plan to increase the number of private brand SKUs sold online this year. To help make this massive influx of private brand inventory a success, more than 80% of grocers plan to increase the number of digital assets and marketing campaigns devoted to their private brands.

Private brands present an overwhelming opportunity for grocers to provide consumers with the products they desire while increasing profitability, but only if they are leveraged to their full potential. Unfortunately, only 38% of grocers are satisfied with their private brand performance.

“Grocers recognize the need for continuous improvement and the sheer scale and expertise of their manufacturing partners to innovate and launch new products,” said Barry Clogen, chief evangelist, Wynshop. “One cannot be complacent in the quest for private brand excellence. Understanding buying behavior and customer personas and launching products to inspire and persuade is a skill that needs to be honed.”

In the report, grocers named several private brand digital marketing hurdles preventing them from maximizing their efforts. The top three challenges hampering private brand digital marketing success are limited software/solutions, inadequate budget, and limited in-house business resources.

Grocers must learn to do more with less. Despite the fact that 8 in 10 plan to expand their digital marketing campaigns for their private brand products over the next 12 months, grocers, on average, plan to increase their private brand marketing budget by just 6%.

“Retailers need to constantly evaluate the effectiveness of their resources,” said Steve Markenson, vice president, research & insights, FMI. “Knowing your customers and what is most effective for them is critical to success.”

While dissatisfaction with private brand performance is prevalent throughout the industry, there is certainly cause for optimism. Eighty-three percent of grocers report that improving private brand performance is a c-level priority at their organization, and 91% have a clearly defined private brand strategy and roadmap, which, if executed correctly, should lead to increased brand awareness, market penetration, sales, and overall profitability.

The “State of Digital Grocery Marketing: Unlocking Private Brand Growth” report explores grocers’ digital marketing efforts, challenges, opportunities, and execution. Download the free report here and benchmark your private brand marketing prowess against your peers. Discover where the competition is placing big bets to increase their private brand market share.

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