Attitudes across the globe have changed dramatically in recent years when it comes to consumers choosing what they eat and where they buy their produce and groceries. In 2018, US retailers must be more transparent than ever before if they want to attract new customers, with Millennials having a growing preference for ‘clean and clear labeling’ within stores.
For private brand teams, the need for clarification on packaging about a product’s origin is becoming increasingly crucial, with celebrity-endorsed clean eating having an influential role on today’s average shopping cart.
The removal of harmful ingredients will continue to gain more traction within the grocery retail sector this year. This is likely to be accompanied by substantial marketing campaigns and packaging to showcase the authenticity of products. Putting a ‘label’ on this growing transparency in production, S4RB have published a white paper about the growth of ‘clean label’, which covers organic, free-from sugars and sodium, sustainable and ethically sourced lines, appealing to a new generation of shoppers.
Social media will also continue to influence recipes and subsequently, the contents of kitchens globally. It’s almost common practice for Millennials to snap a picture of their culinary creations for their own channels, typically by health-conscious individuals wanting to showcase the latest vegan, meat-free, sugar-free and gluten-free dishes. Older shoppers (Boomers - like me!), who are being influenced by their children in purchasing health-promoting foods, are also adopting this healthy mindset.
As well as being more concerned about health, consumers are becoming more aware of environmental factors; such as whether eggs are free-range or if fish is responsibly sourced. In the US, the 2016 GMO debate led to all genetically modified ingredients being labelled on products, highlighting the need for improved transparency between retailers and customers – we should expect more of this in 2018.
Furthermore, the world’s biggest organizations are stepping up their environmental credentials, for example Starbucks encouraging its UK customers to use recyclable cups, as pressure is stepping up on brands to limit plastic use and develop sustainable packaging. It will be interesting to see which retailers lead the way in taking these innovations to the next level.
Private brands are no longer seen as the low cost, poor quality alternative; in fact, younger consumers are excited to try something different to the established brand names. With this rise in demand, providing consistently high quality goods is key. The increased testing of private brand products will need to step up over the next 12 months to reflect this. This increase is sending a clear signal to suppliers and manufacturers - if private brand suppliers know they’re only likely to be tested once a year (or not at all in some cases), they’d be more inclined to make ‘shortcuts’ that might diminish quality. National brands typically review their lines at least four times annually and private brand retailers should be aiming to replicate, if not exceed these measures.
When you consider that premium private brand products, such as alcohol and seafood foster the highest levels of loyalty among customers, regular testing is even more important. To be successful, flagship products must stand out among other lines encouraging consumers to make a return visit to purchase.
Lidl has already begun to make its mark in North East US states, and it will be interesting to see how established regional and national retailers react to this move in 2018. With a likely price war ahead, it’s more than likely that customers will make the move away from nationally established brands. These regional retailers will need to switch their focus to their heritage, tradition and well-loved product lines, however, there is always going to be winners and losers, with larger retailers being able to rely on economies of scale.
Customer feedback is going to become even more pivotal to the success of private brands this year, with retailers investing in systems that allow them to listen to their customers both online and in-store. With a more robust process in place, they’ll be better equipped to respond to complaints, enquiries and positive comments, rewarding shoppers accordingly and adding value to future products.
While lots of work has already been done to drive private brand success in the US, 2018 looks set to be the year the benefits of these products begin to be fully realised by retailers for their high margins and impact on footfall within stores.