Shopping Without Brands? How The Growing Popularity Of Non-Brand-Name Products Reflects Larger Shifts In Consumers’ Retail Expectations
The emergence of companies like Brandless illustrates mindset shifts in the modern marketplace. Here's what marketers need to know.
Amidst fears of the “retail apocalypse” in recent years, there are numerous counterpoints of more ‘experiential’ specialty retailers and entertainment thriving both on and offline. The challenge is how retailers can determine exactly what benefits consumers of different demographics value — and how to offer it.
As marketers look to challenge the status quo and revive the retail and shopping experience — both on and offline — the company Brandless is among a small group of startups that provide an interesting lens through which to view the exploration of revolutionizing the shopping experience. How? The company’s business model is exactly what its name suggests: The online store offers a range of household wares and food products, without the presence of outside brands.
The emergence of brandless shopping in the modern marketplace is illustrative of shifting trends in consumer interests in 2018. Today’s consumers are not only focused on ways to save money when they shop, but they also gravitate towards out-of-the-ordinary experiences — in other words, something they don’t get from Amazon.
As priorities and expectations of the modern shopper have evolved with new innovations from on-demand delivery to voice activation, companies are called to smartly respond to consumer needs while standing out from the crowd. It’s true that Brandless is a shocking twist on the one thing that consumers today have come to expect from a company — a strong brand. But is it possible that shopping without brands can allow for more of what consumers today are looking for?
Consumers Prioritize The Price Tag
On the surface, Brandless’s differentiator is simple: lower prices. With every item priced at $3 (plus the cost of shipping), Brandless claims that by removing the brands from its business model, it also eliminates what it calls the “BrandTax,” referring to additional hidden fees that raise a product’s price.
KPMG’s 2017 Global Online Consumer Report found that a product’s price is the most common consideration when consumers are online deciding where to make a purchase. The report also noted that 57 percent of online consumers consider price as a top factor in deciding a website from which to make a purchase.
As such, private-label products offered by companies, like Target and Costco, are also increasing in popularity in recent years. According to a recent Nielsen report, “Total Consumer Report,” sales of private-label brands have surpassed those of manufacturers’ brands within the past year. In fact, Nielsen’s report stated that in-house store brands were growing more than three times the rate of branded products by Q4 of 2017.
Consumers Crave Unique Experiences
At its core, the Brandless concept is radical in an ecosystem saturated by branding. But in recent years, we certainly have witnessed the rise of companies that dare to alter ordinary experiences. MoviePass has changed movie-going by eliminating the cost barrier of high-priced tickets. This strategy allows customers to experience the silver screen without hurting their wallets. Netflix has altered the television industry by giving viewers the ability to watch their preferred programs on demand. Ridesharing apps, like Uber and Lyft, have clearly altered transportation by redefining the roles of driver and passenger.
The company’s low cost, one-stop-online shopping benefit allows consumers to try new things that would otherwise be either too expensive or difficult to find at local stores in some areas. As radical as the notion of shopping without brands may seem, companies like Brandless are symptomatic of the modern consumer’s desire to experience ordinary things — like movies or online shopping — in new and refreshing ways.
For retailers who aren’t thinking about launching an in-store label or delivering brandless products, this concept can still be extrapolated. It may mean thinking about partnerships with on-demand delivery apps, hosting in-store events, or debuting pop-ups for a formerly online only shop. A new experience with a company consumers thought they knew? That’s worth talking about.
Can Brandless Compete?
It’s unclear whether Brandless itself will survive in today’s competitive marketplace – but it’s undeniable that customers are growing ever-hungrier for new experiences. Additionally, per the Nielsen report, the trend towards wanting a lower price or newer product over an established or “elite” name-brand is one to watch.
This is a lesson that can benefit all retailers. Essentially, appetites clearly exist for new ways to order products online and new ways to shop in stores. From considering thinking “brandless” to hosting in-store events to building a voice strategy, savvy marketers will pursue these options to fit their brand — or lack thereof.
*Michelle Rosinski is a communications and public relations specialist focusing on digital marketing and e-commerce. She is currently a client representative at BCW (Burson Cohn & Wolfe) where she works with Fortune 500 companies.