How private brands can influence grocery retailing?

The pandemic has completely transformed consumer trends and will be the cause of change in the future also. Earlier it was the effect of the virus that was influencing the local markets but now the trend is changing and it is the recession that is taking over and brands must act fast to adapt to the the changing buying patterns of consumers

How grocery retailing will be affected?

Private brands can help grocery retailers to strengthen their business by converting the shopping habits of customers developed during the pandemic to routine habits and they have always given more margins and the chance to build customer loyalty.

The sale of private label CPG brands increased by 11% in 2019 when compared to 2018 in fresh grocery stores and mass merchandisers like Whole Foods and Walmart respectively. Pandemic further accelerated this trend and in the first part of 2020 the U.S private brand sales increased from 14.6% as compared to the same time period last year.

But due to recession, another factor of concern is that customers are spending less on their grocery shopping.

More importance for private brands

Therefore private brands are gaining more importance than ever but to keep it valued retailers must focus on

1. Labelling and packaging

"Natural" products have always motivated consumers towards it and especially after the pandemic consumers will be even more attracted towards products that are high on quality, safety and health benefits, Therefore packaging and labelling them to address the consumer needs will help in increasing the customer loyalty and increase brand value

2. Selection of products

According to consumer priorities select the private brand portfolios. Basic commodities like rice, flour, pasta will always be in demand but there is also scope for including meal kits for special dinners, hair colouring products, pet grooming and food preparation products like canning supplies owing to the new shopping habits due to more people working/learning from home due to the pandemic

3. Faster addressing of consumer wants

Make use of the broken supply chain and meet consumer demands of when and what they want by using private label goods as retailers can source locally and control the production of them to maintain reliability and quality of the supply chain of products. Let customers know about this in the packaging

4. Cost saving

Retailers can make more profits by saving cost as there is no one in between to take a share in case of private brands. Also 78% of consumers are reducing spending on household expenses so retailers need to save money wherever they can and private brands provide them with that option. Get your own brand and establish more on grocery business.

Conclusion

There are many advantages of using private brands for retailers to regain their footing in the market and to break even. Private brands provide them with cost cutting option and also attract more customers as health benefits and quality will be abundant in natural products helping retailers to expand their customer base