Industry Partners

Is the Online Shift Leaving Private Brand Behind?

FMI report suggests virtual strategies
Photograph courtesy Ahold Delhaize USA/Hannaford

Private label remains one of the most effective arrows in the supermarket quiver, but retailers need better aim to succeed with them online.

That was one finding from a newly published report from FMI, which described private brand sales performance as “mixed” in 2021 in relation their branded counterparts. This in part is due to the consumer rush online, where manufacturer brands tend to dominate purchases. E-commerce therefore “presents an opportunity both to increase private brands sales and to increase shopper loyalty,” FMI said.

See also: Surviving Inflation in Private Brands

Private brands are a driver for consumer choice of a primary store, according to FMI’s U.S. Grocery Shopper Trends. Online shoppers (47%), and particularly frequent online shoppers (53%), are more likely than non-online shoppers (32%) to connect private brands to their selection of a primary store. This coupled with the dramatic growth of online shopping makes it more important than ever for private brands to compete in the evolving omnichannel world.

Enhancing private brands in ecommerce is an imperative for food retailers with their own private brands and improving execution is crucial to driving success, FMI said. While many retailers have already recognized this and have taken steps toward boosting their private brand strategies for e-commerce, more work needs to be done, FMI said.

Its research indicates that just 39% of retailers leverage private brand exposure through email promotions and digital circulars. Another 33% focused on search engine optimization or prioritized online brand pages and storefronts.

The consultancy firm FitForCommerce mystery-shopped 25 food retailers’ ecommerce sites to provide insights on how the industry is currently promoting private brands online, and recommended several strategies for improvement, mainly around getting their offerings onto the homepage, into navigation menus, and featured category pages, recipes and digital circulars.

FitForCommerce recommended retailers add private brands as a separate category in dropdown navigation menus; improve the presence of private brands in online brand filters, by using a logo icon or and by prioritizing private brands in search results for things like produce.

 

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