This is a contemporary rehash of no-frills products that swept into supermarkets in the 1970s. No-frills had a limited lifespan then and it’s way too early to know if it will work for e-commerce. If the lore about Millennials being cost sensitive is true, they have a shot. And if, “if” Brandless catches on, it will be another shot across the bow of stalwart CPG brands which have seen a few of those shots heading their way lately.

This looks like a very early version of an interesting idea. Single price points are intriguing and cheap is chic. But Brandless will face stiff competition from Amazon and Jet, which have significantly better demand data.

The Brandless membership and delivery fee architecture is also a non-starter — they’ll have to adjust it to attract mainstream customers. Single price points may also force pack configurations that don’t align with consumer preferences. And without reviews or richer product content, they’ll have a tough time convincing shoppers of their quality.

Still, I wouldn’t count them out based on this first iteration.

$3 for a pound of spaghetti? I’m not feeling it. And they are going to have to deliver big-time on taste, too. There may be a market for this offering, but it will definitely not be mainstream.

The move to a generic healthy, organic, non-GMO CPG product strategy may successfully resonate with both the Millennial and Generation Z segments. Whole Foods, who is battling the “whole paycheck” reputation, has increased their 360 assortments, which provide significant value to their consumers.

The concept of brands does not have the same significance that it did as recently as 10 years ago. Consumers are increasingly health conscious and at the same time price conscious. A direct-to-consumer, e-commerce-based and vertically integrated model could provide significant value to consumers and take off beyond expectations.

I can definitely see this website picking up steam. All of the components are there: perceived quality, low prices and altruism. Plus, Gen Z customers are anti-brand and will love the pragmatism of removing the “brand tax.”

Meh. I feel like this is a lot of hype for what is not fundamentally any real, differentiating business model. This whole “brandless” argument is the worst kind of marketing hype and it must be a slow news week because I’m a bit startled at just how much attention the concept is getting. They’re advertising, they’re promoting, they still have to make consumers aware of them. They have to make an investment into educating consumers about the value proposition involved in the products they’re selling, which is basically low price and quality ingredients. The only thing a brand is, when it comes down to it, is a shortcut to understanding what you can rely on about the products you’re buying. That’s it.

So they make you buy them in round-dollar increments ($3 won’t be the only price point forever) — which, as others have pointed out, is not any different than a dollar store, just with a bit more confidence that the stuff didn’t come from a container washed up from China. Like I said, meh.

Lyle and Nikki hit home on the key point: total value. Value today is so much more than price … unless you are a shopper that only cares about the bargain. Those people are the most promiscuous out there, so why would they be beholden to one outlet only? Let’s face it — if I want a serving spoon as cheap as I can get it, it’s going to be at the Goodwill. The hunt is half the fun for those folks!

This said the site it done well, as is the packaging. But to me it feels more like an Amway play than a full-spectrum e-commerce site.

Digital disruption of grocery shopping is going to necessitate all kinds of interesting new CPG business models. But in it’s current form I don’t see Brandless getting traction. The problem is that (unlike traditional store brand “generics”) Brandless isn’t for sale at a location or touchpoint where people are already shopping. You don’t come to Kroger for a national brand and then discover Brandless. Rather, you have to explicitly go to their URL and buy from them. That means that they may call themselves “Brandless” but they are going to have to spend A LOT on digital advertising to get eyeballs. Think along the lines of Jet.com that was paying $50/customer in acquisition costs. Brandless acquisition costs could be even worse … remember they can’t win by getting someone to their site that needs $3 peanut butter, they need to get someone to their site that wants/needs to buy 26 items (to get free shipping). No one wants to pay shipping and they certainly aren’t going to want to join a club who’s only benefit… Read more »

What’s the old adage, “What’s old is now new again”? I can remember when the grocer I worked for introduced generics around 1977 and lead the marketplace with them for years, even launching a spinoff chain with generics only. With shoppers looking for value more than ever, and switching between brands at an all-time high, I’d say it’s been long enough of a cycle for generics to make a return to the marketplace.

I think Brandless has opened up the door for an interesting conversation about what brands mean to customers in today’s retail industry. Does quality trump brand name? If Brandless can deliver high-quality products at $3 a piece does that make them more attractive than a big name brand? However cost-savvy customers will be comparing whether generic products at $3 are actually cheaper than the big name alternative in every case. As we see with dollar and discount stores, what seems cheapest is not always! Also as others have mentioned, while they may not be selling “brands,” Brandless still has to build its own brand in order to make its model work. Obviously the price point is one way of doing this, and the social aspect is another, but getting its name in front of people is going to be key. I can see this appealing to younger shoppers who might be struggling with high bills and low wages, but are also wanting products that meet their values like free-trade, organic etc. In that respect Brandless… Read more »

Interesting concept that goes after the branded pricing premium while trying to become the online version of the “dollar store” format. Although they’re setting up Brandless as the new anti-brand, it is branding in itself and that takes deliberate set of marketing actions, dollars, and time.

I do like the idea of simplified assortment with healthy ingredients. However, it’s difficult to imagine that a visit to the website will become a regular habit for enough shoppers to provide long term traction. Are people today really searching for this alternative, or is there an unidentified need for such a format? Not so sure about that, but certainly a risk worth taking.

Many consumers have become more comfortable buying private label or generic products, as many educated consumers realize that many of the generic products are actually the same as brand name products and come from the same factory. The challenge will be to keep pricing lower than competitive brand name products and maintaining quality. If a consumer gets burned by a poor quality product, they will not only discontinue shopping on the site but may spread negative news across review sites and social media. The other issue is shipping costs. If a shopper doesn’t have $72 worth of merchandise to order, $9 may be too expensive for shipping. Generics have always been a challenge … when I worked for a large supermarket chain early in my career, we conducted generic pricing experimentation using test and control methods and determined generic velocity increased the closer we got the price to national brand average. The perception being that the generic cannot be as good as the national brand despite the fact that it was frequently better. Consumers are… Read more »

A Digital Dollar Store certainly has some intriguing elements. First, consumers/shoppers don’t think “generic” brand like most in the retail or CPG world — they are simply brands. With many retailers — Amazon included — launching generic brands that market like national brands, this can be a compelling proposition. Second, given limits of the Digital Shelf (seeing dozens of products vs hundreds at once) the SKU-limited approach can actually be helpful to reduce confusion and make decision making easier. Lastly, for certain categories, “generic” brands can make a lot of sense and save shoppers lots. Interesting play for sure.