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How to Succeed with Private-Label in e-Commerce
Grocery retailers have the opportunity to compete in the market with private-label offerings as e-commerce delivery and click-and-collect offerings ramp up.
November 11, 2019
3 Min Read
Photograph courtesy of Mercatus Technologies
Sponsored by Mercatus
As the quality and quantity of grocery private-labels have improved over the past several years, these items have captured an increasing share of the market. Consumer packaged goods (CPG) from private-label products accounted for a significant portion of CPG grocery sales in the 52-week span that ended in March, according to Nielsen data reported by eMarketer. Among value grocers, private-labels accounted for 57% of annual CPG sales. At premier fresh grocers, 23% of CPG sales came from private-labels. Private-label sales increased by 4% across all CPG channels in that time, the data showed.
Retailers are increasingly moving into on-trend private-label line extensions and revamps that are helping them remain aligned with consumer preferences around better-for-you product formulations and clean ingredient labels. For example, Target in September launched Good & Gather, its largest private-label grocery brand, which features products made with no artificial flavors, artificial sweeteners, synthetic colors or high fructose corn syrup.
Similarly, Kroger Co.’s wildly successful Simple Truth line of products, which has already surpassed $2.3 billion in annual sales, is expanding with a line of plant-based meat and dairy alternatives to appeal to consumers focused on reducing their consumption of animal-based products.
As grocery retailers ramp up their e-commerce delivery and click-and-collect offerings, they have an opportunity to compete in the market with their own private-label offering.
So what does a successful private-label in e-commerce look like?
It looks as good, if not better than brand name alternatives. Retailers need to tap into every opportunity for their private-label products to shine. E-commerce gives retailers multiple options to present those products, from imagery to product description. Highlighting the core benefit/differentiator of each private-label product, such as it being organic or grain-free, will take shopper interest and conversion to the next level.
In every relevant placement, shoppers will discover your private-label products. Integrate private-label products within the shopping experience, showcasing them across multiple placements. A seamless e-Commerce experience offers placement options that get right in front of shoppers’ eyes, such as dedicated sections, catalog filters, up-sell and cross-sell opportunities and targeted marketing. Personalization solutions enable retailers to focus on the relevance of placements and target marketing communications to maximize brand exposure, build brand trust and ultimately increase conversion rates.
You know where your private-label stands. Retailers can grow and expand private-label with data rich insights. E-commerce offers the ability to gather and track extensive shopper data, where the level of depth increases as the retailer connects each part of their shopper experience, from store-to-door. Armed with extensive insights into a private-label’s conversion metrics, retailers can make informed strategic decisions on everything from market fit to packaging.
With the right partner, retailers can offer a seamless eCommerce experience that ensures their private-label products deliver value across all channels and touchpoints. Mercatus can help you build an omnichannel shopping experience that empowers you to own the shopping experience and meet your specific goals around private label.
Extend your brand online and optimize the potential of a private-label program through e-commerce today. Visit mercatus.com to find out how.
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