Are store brands a ‘fundamental defining piece’ of the retail experience?
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.
Boxed, the online wholesaler and retailer of groceries, household products and health supplies, believes that private brands, when done well, are not just an add-on or “me too” value option anymore or just a way to drive margin expansion. According to Jeff Gamsey, VP of private label at Boxed, private brands can become a “fundamental defining piece” of the entire retail experience.
“They serve a lot of purposes,” said Mr. Gamsey in an interview with Retail TouchPoints. “They can create leverage, to be used to hold brands accountable to fill merchandise assortment gaps. They can even spark innovation that challenges existing industry standards, deliver higher-quality products and healthier, cleaner ingredient decks.”
An established brand like Costco’s Kirkland Signature can provide leverage over vendors “and helps keep them honest.”
For customers, a strong private brand creates value and “becomes a reason why they shop at your stores instead of somewhere else.”
In developing its Prince & Spring brand, Boxed sought to create an “emotional connection” with customers with products they would “be proud to display in their homes.” The effort was as much about package design as product quality.
“We really stepped on the gas pedal to infuse it with as much personality as we could,” said Mr. Gamsey. “A lot of the products Boxed sells are everyday essentials, but we try to use design to elevate them and make them more engaging.”
Boxed’s embrace of private label as a primary brand comes as some of the country’s biggest retailers, including Amazon and Target as well as Walmart and its sister site, Jet.com, are aggressively upping their private label games.
Mr. Gamsey expects private brands will continue to grow with the migration of commerce from brick-and-mortar to online and with Millennials showing they’re highly open to trying new brands. He adds, “Obviously, Millennials like to shop on their computer and phone, and mobile-centric companies with a great private offering will continue to reap the benefits.”
DISCUSSION QUESTIONS: How “fundamental” are private brands to defining retailers today? Should retailers aggressively seek to elevate the reputation of their private brands? How will the shifts to online shopping and greater spending power by Millennials influence private label development and growth?