Consumer expectations have changed hugely over the last ten years, leading to a significant evolution of the UK’s grocery sector. Own brand products continually reinvent themselves to successfully replace many big brand staple products and now make up an increasing proportion of premium products in the nation’s average weekly food shop.
This huge shift in consumer expectations has impacted how retailers build relationships with customers, with the product-itself becoming the focal point of the shopping experience. The nature of own brand offers the perfect opportunity for retailers to steal a march on more recognised national brands, as well as disruptive discount retailers like Aldi and Lidl.
In the age of convenience, with smaller grocery stores on the high street, online shopping and click & collect, shoppers no longer need to hit the stores once a week. Instead, they have the option of smaller shops being delivered to their door, or top-up shops at more convenient high street stores.
The key change this has influenced is in how retailers build relationships with their customers. The product is now a major factor in how customers choose where to shop, rather than the name hanging above the door. While this provides opportunities for retailers, it means that as well as traditional gauges such as customer service, brand loyalty and the overall customer experience, the product itself must now stand up to even more scrutiny.
To set themselves apart in a crowded sector, retailers must find a way to differentiate from the competition. The Co-op is a great example of how to do this well. Shoppers entering any Co-op store know exactly what they’re getting as a result of effective branding creating a point of difference. The focus on local, British and convenient products means that consumers know that products may cost more, but they are paying for the accessibility.
By taking this approach, retailers have ensured that transparency to customers about the sourcing and ingredients of own brand products is now essential, rather than a desirable extra. When customers want information about a product, they expect to be able to access it immediately.
This makes the process of retailers collecting the required data from suppliers critical to providing high levels of transparency and building trust from customers. Consolidating this data and creating a single view of a product’s information can enable retailers to act quickly to respond to customer feedback by creating a stronger relationship with suppliers.
For online retailers, it is relatively straightforward to provide huge amounts of information to customers and accurately measure their feedback. However, in physical stores this is a huge challenge for retailers. The growth in popularity of vegan and free-from diets has placed even greater importance on allowing customers to view details about a product, from ingredients to manufacturing processes and provenance.
Fortunately, technology provides retailers with innovative methods to communicate, not only product information but also brand values, with their customers wherever they are. SmartLabel is a recent initiative launched in the US which allows shoppers to scan QR codes on packaging in-store to access further information, ranging from nutritional details and bioengineered ingredients to sourcing and sustainability.
By embracing initiatives such as SmartLabel, retailers can get ahead of established national brands by ensuring that their own brand products provide more information and accurately relay their brand values to customers at the touch of a button. Using solutions such as S4RB’s Affinity™ platform, which has been endorsed by the Food Marketing Institute, can help retailers to implement SmartLabel.
In our work with retailers on both sides of the Atlantic, we have found that the most progressive own brand lines are the ones providing greater transparency about the sources of key ingredients, allergens and nutritional properties using easily accessible methods, such as a QR code that can be scanned on a mobile device, perform significantly better in terms of sales.
Of course, in a rapidly shifting market, trends will continue to shift with health and fitness products currently gaining momentum on supermarket shelves. In order to quickly respond to any new popular ranges, retailers need to ensure that they identify the trends that are likely to maintain traction and which are short-term fads.
Undoubtedly, the key to success will continue to be the effective strategic collaboration between retailers and their own brand suppliers. By engaging closely with their supply base, retailers can offer much more open, transparent, and easily accessible feedback to suppliers to drive effective product development and informed decision making.
Consumer demands for convenience and easily accessible information about products are here to stay and retailers need to ensure that they have the supplier engagement strategies in place to meet these demands. In order for retailers to build an own brand that consumers return to again and again, they need to make sure that they are in a position to navigate increased customer scrutiny and deliver on new trends in a quickly changing landscape.
To learn more about the reinvention of own label, read Josie’s white paper here
