Millennials Go Brandless

Millennials Go Brandless

Maybe you blame it on the Amazon effect, but if you’ve been keeping up with the retail and consumer package goods industry- the future is bleak. Struggling to innovate, large corporations in consumer and retail have suffered a steady decline in market share.

Today, consumer packaged goods (CPG) represent a $770 billion industry and online CPG sales are projected to grow to $36 billion by 2018. However, according to investment banking firm Jefferies, big brands have lost share to smaller brands in 42 of the top 54 most relevant food categories in the past five years (from “Food: The Curse of the Large Brand”).

The old giants of the CPG industry, like Proctor & Gamble and their household brand names, have been losing share to innovative startups that are offering laser-focused products that either solve a direct consumer need or change consumer preferences and behaviors.

A perfect example of this is Brandless, the San Francisco based startup (with over $50M raised in only 3 funding rounds) with a mission to disrupt the status quo in the stodgy CPG industry. Brandless sells and delivers the staple items for household products; beauty and personal care, and nonperishable food products- but they do it at a set cost of three dollars under their private label.

Brandless Story: “Everyone deserves better!  Who says better needs to cost more?”

Like most startups, founders Tina Sharkey and Ido Leffler crafted this idea after closely studying millennial buying behaviors. With the rise in pricing transparency (Everlane is a great example of this) consumers are moving away from the large, trusted, big-name brands to more of what people are viewing as a “better value”.

The irony of Brandless is that it is a brand (just one with a story focused around being anti-big-brand). They’ve been able to accelerate their Story at a fraction of the cost of their competitors by crafting a targeted, customer-focused strategy.

The Brandless Strategy of focusing on the customer is what lies at the heart of their early success. Below are some examples of the behaviors that Brandless has crafted its success around:

  • Spend Shift - Most people today are “hybrid” shoppers – using both online and physical retail locations as part of their buying journey. Physical stores are feeling the digital crunch, and are having to adjust accordingly. Retail is being forced to welcome the shift to online purchasing … Why? Because no one enjoys navigating through cluttered stores and slow-moving checkout lines. Brandless recognized that customer’s CPG needs weren’t being met. Much like Amazon, Brandless is offering convenience by shipping commodities to your doorstep at a fraction of the cost.
  • Brand Tax CutIf your bottle of shampoo featured a line item for the cost of the advertising that was used to bring it to your attention, would you still be happy paying for it? Brandless refers to this as the “brand tax”. By showing consumers the distributor costs, breakage costs, trade promotion costs and other fees associated with typical retail distribution, they can further promote their own brand story and help the customer without talking about themselves- a master class in making the customer the hero. Without the “brand tax”, Brandless can offer products at least 40% cheaper than comparable products.  
  • Private Label is the New Black – Shoppers are smart... and getting smarter. They know that traditional big brands spend a disproportionate amount of their revenues on building their brands through advertising and trade promotions. Brandless is promoting this idea and locking in on the improvements in shopper perceptions about the quality of private label products. These perceptions are on the rise around the world – especially in North America. As CPG items become more commoditized, this trend will only continue putting Brandless in a position to continue to grow.
  • Right Assortment -   Shoppers shouldn’t feel “paralyzed with choice”. Brandless combats this, and differentiates itself from the Amazons of the world, by offering a reduced number of products and an improved customer experience. This requires extensive customer discovery and continued behavior analysis to be certain that they are curating the right assortment of products that shoppers need. Unlike typical groceries, big-box retailers, and even most online retailers with tens of thousands of SKUs, the Brandless strategy and the supporting systems have made it easier for the shopper to choose.
  • Get Better Stuff and Give Back - Brandless hones in on millennial preference for corporate responsibility by offering a subscription service that gives back. Almost as an antithesis to Amazon Prime, Customers have a chance to “B.More”- giving members a chance to give back by including a donated meal to the nonprofit Feeding America, in addition to the donation that is already made after each Brandless transaction.

By using a strategy that keeps them in touch with their target audience’s needs, Brandless has been able to generate stronger loyalty and buy-in to the brand story. Despite shunning the big brand philosophy of over the top advertising budgets and branding efforts, Brandless has been able to establish a strong brand through a focused strategy and highly aligned systems.

If you’d like to learn more about how you can accelerate the power of your brand story through a focused strategy and aligned systems download our ebook: TRANSFORMATIONAL MARKETING: Moving to the TopRight.

?


B A

Design office

7 年

Amir husaini aattarafitsn

回复
Kara MacBeth Herron

Strategic Marketing Manager @ Roseburg Forest Products | Marketing Communications

7 年

Interesting take on brandlessness (is this a word?) from the brand "Brandless". I checked out their website too. https://brandless.com/category/personal-care/hair-care

Craig D'Egidio

Producer (Video and Photography)

7 年

Great insights Dave. Thanks for sharing. Just attended an AMA Atlanta meeting with CMO of Georgia-Pacific presenting on their marketing strategy/approach. Hope he and his team are checking out these trends as well!

要查看或添加评论,请登录

Dave Sutton的更多文章

  • Five Tips for Creating a Compelling Brand

    Five Tips for Creating a Compelling Brand

    When audiences think of your brand, what comes to mind? Is it the brand story you created with your team, or is it…

    3 条评论
  • 4 Ways to Optimize Holiday Marketing into 2022

    4 Ways to Optimize Holiday Marketing into 2022

    Despite recent concern about declining consumer confidence, this year’s holiday shopping season is on track to break…

    1 条评论
  • How to Become a Successful Managed Service Provider

    How to Become a Successful Managed Service Provider

    Today, the lines between agencies, consultants, outsourcers and staffing firms have completely blurred. In particular…

  • 4 Critical Enablers of Digital Strategy

    4 Critical Enablers of Digital Strategy

    There is a common misconception that digital transformation involves nothing more than acquiring, configuring, and…

    1 条评论
  • The Year in SEO Strategy

    The Year in SEO Strategy

    You may wonder why I've spent so much time writing on search strategy and search engine optimization (SEO) this year…

  • Manage Your Marketing Team Like a Super Bowl Champ

    Manage Your Marketing Team Like a Super Bowl Champ

    In the world of professional sports, excellence takes many forms. Athletes, coaches, and the front office might command…

  • How to Regain Your Footing In 2021

    How to Regain Your Footing In 2021

    The COVID pandemic has had a devastating effect on businesses in just about every industry across the country. Business…

    1 条评论
  • Building an Authoritative Brand for 2021

    Building an Authoritative Brand for 2021

    The coronavirus pandemic has caused significant change for businesses, mainly by shifting most, if not all, work…

  • Finding Balance in the Midst of a Pandemic

    Finding Balance in the Midst of a Pandemic

    The pandemic has been mentally exhausting for everyone. For many people, this has resulted in a decline in their work…

    3 条评论
  • Why Should My Dentist Care About SEO?

    Why Should My Dentist Care About SEO?

    On my last visit to my dentist for my bi-annual cleaning, it became obvious to me that even dentists can no longer…

社区洞察

其他会员也浏览了