As we consider the most significant trends impacting purchasing today, consumer demand for private brands continues to remain a focus, as well as the need for convenient and digitally enhanced shopping solutions.
Among the ongoing effects of the pandemic, COVID has forever shifted customer behavior with respect to how consumers shop and what they purchase. Consumers are turning to online channels for their shopping needs, with more than eight in 10 consumers planning to make the same amount or more online purchases of food and nonfood products in the future. In addition to the shift across channels, out-of-stocks and income constraints at the height of the pandemic initiated brand switching, with with more than 70 percent of shoppers purchasing a new or different brand, leading to a significant increase of private brand trial. This trial is expected to continue, with nearly 30 percent of consumers reporting a positive experience from brand switching and expressing plans to permanently commit to new purchasing behaviors.
While the pandemic has accelerated these trends, this shift in purchasing was present before COVID, with consumers placing importance on convenience as well as their affinity towards private brands. Pre-pandemic, more than half of consumers said they picked a store specifically for its private brand offerings, with 86 percent of consumers viewing private brand quality as equal to or better than national brands.
One retailer that's setting the stage for both online grocery and private brand development is Amazon.com. With the introduction of its brick-and-mortar banner in September 2020, Amazon Fresh, the company has solidified the importance of omnichannel private brand-focused retailing by using technology to create a convenient and seamless shopping experience. Amazon Fresh encourages an omnichannel approach, from the introduction of new integrated Dash Cart technology to allow shoppers to use their Amazon account to skip the checkout line, to dedicated “Ask Alexa” stations to locate items in-store, to digital shelf tags to prove real-time reviews on products.
In addition, Amazon Fresh has a portfolio of 12 private brands, two of which — Fresh and Cursive — were launched along with the store’s opening, establishing a strong private brand presence in nearly every department of its digital and retail touchpoints.
In order to successfully compete across the retail landscape, all retailers must examine their role in the evolving omnichannel environment, in which private brands have the opportunity to occupy a greater share of sales. Our custom research among private brand shoppers confirms this, with seven in 10 signifying they will continue to shop online. Forming an omnichannel approach, as Amazon has, will address the evolving and COVID-accelerated purchasing behavior with respect to how consumers shop and what they purchase.
To solidify this strategy, it's imperative that retailers first amplify their digital presence to provide venues for consumers to conveniently receive information and purchase their products. Digital enhancements to the in-store experience by way of QR codes or other scannable options remain viable solutions to shift purchasing across channels as well as provide product (e.g., ingredient) information.
With these solutions, retailers must also promote their brands across platforms, especially within digital, where private brands have historically been unrepresented. Retailers with best-in-class private brands are leveraging their digital real estate to promote their brands, including having a dedicated private brand web page that best positions the scope and benefits of each line, leading in product-level search on retailers' websites, and featuring private brands on social platforms while incorporating online recipes, digital coupons and other digital assets. By putting their omnichannel foot forward, as well as leading with private brand solutions, retailers will position themselves for success in 2021 and beyond, ready to support consumers with whatever comes their way.
Katherine Burkhardt is senior manager, brand and marketing strategy at Daymon, a company that drives private brand innovation, differentiation and results.