June 28, 2012
Store Brand Promos Gone Wild
A host of grocers are running campaigns touting their private label offerings, some rather quietly and others loudly.
One of the more aggressive comes from Food Lion, which on June 16 sent out employees with shopping carts through the Pine Knoll Townes neighborhood of Raleigh, NC to knock on doors and hand out free groceries featuring its My Essentials store brand. Operation Grocery Drop delivered more than 2,000 items to approximately 100 families along with coupons, according to mypbrands.com.
Food Lion donated $20,000 to local Raleigh non-profit organizations as part of Operation Grocery Drop. Other communities are expected to see surprise visits throughout the year. In April, Food Lion launched its first TV spot calling out the savings of its My Essentials label as part of a broader PL campaign that includes radio, digital and out of home.
![[Image: Operation Grocery Drop]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAxIDEiIHdpZHRoPSIxIiBoZWlnaHQ9IjEiIGRhdGEtdT0iJTJGcHVibGljJTJGaW1hZ2VzJTJGZGlzY3Vzc2lvbnMlMkYxNjExMSUyRmZvb2QtbGlvbi1hZC1zdGlsbC5qcGciIGRhdGEtdz0iMSIgZGF0YS1oPSIxIiBkYXRhLWJpcD0iIj48L3N2Zz4=)
Publix is bringing back its "Take the Publix Brand Challenge" promotion. Under the formula, shoppers buying certain national brands get Publix’s equivalent PL brands for free. National brands under the promotion currently include Hormel Bacon Bits, Mt. Olive Sweet Relish, Kikkoman Soy Sauce, Gulden’s Spicy Brown Mustard, and Kraft Zesty Italian Dressing.
Publix’s marketing copy states, "We’re confident when you compare the Publix Brand to the national brand, you’ll like our brand just as much — maybe even more! Just look for the in-store display for this week’s challenge."
Other examples of PL promotions:
- Price Chopper’s Facebook page recently indicated the northeast grocer was bringing back its promotion calling for $5 off any $15 purchase of its store brands. The coupon was valid from June 16 through June 23;
- Walmart Canada just rolled out a truck tour to promote the launch of its PL Angus beef line. The tour, started in Quebec on June 20 and will end in Burlington, Ontario on Sept. 1;
- In March, SC-based BI-LO’s "No Dough" baseball promotion gave customers who purchased any four participating BI-LO private brand items in one transaction with their BI-LO rewards card a voucher for two free tickets to a University of South Carolina or Clemson University baseball game.
- Last November, Hannaford Bros. again launched its annual "Buy & Save" private label promotion. Shoppers get a $1 checkout coupon for every Hannaford and My Essentials store brand product they buy in the same order. The maximum reward is $10 per transaction.
- A&P is hosting sampling and in-store demonstrations across its Pathmark, Superfresh, Waldbaum’s, Food Emporium and A&P banners to showcase the extension of its Angus Beef line to include marinades and Angus hot dogs. The program is running from June 23 and June 30.
- Operation Grocery Drop – Food Lion
- Operation Grocery Drop – YouTube
- My Essentials Stars in Operation Grocery Drop: Food Lion – mypbrand.com
- Food Lion surprises neighborhood with free – ABC News Raleigh-Durham NC
- Publix Hosts Private-Label BOGO – Supermarket News
- Price Chopper – Facebook
- BI-LO, Free College Baseball & Private Brand – mypbrand.com
- Hannaford Rewards Store-Brand Shoppers – Supermarket News
- Angus has arrived! – Walmart Canada/Canadian Newswire
BrainTrust
Recent Discussions
Discussion Questions
Discussion Questions: What are some of the most effective and cost-efficient ways for grocers to promote their PL brands? Which among those mentioned in the article appear to be particularly effective?
Poll
I like any PL promotion that puts the product in the shopper’s hands (or mouths). We buy a lot of Publix’s PL products because, in a blind taste test (which we’ve done at home with friends and family) we can’t tell the difference.
I think Tom Ryan forgot one, the Can Can sale by ShopRite supermarkets in the NY/NJ area each winter for the past 20 years or so. They are all good programs and as long as we remain in the Great Recession, consumers will continue to shop for lower prices. We have seen great improvement in the sales at the variety discount stores as consumers step down from department stores and specialty retailers. In the area of food, we step down from national brands to private label products in order to save money. Most of us from the business know that a lot of the private label products are produced for the retailers by the national brands anyway. So what’s not to like?
My vote goes for Food Lion for creativity and their dedication to no frills supermarketing in order to maintain their low price image.
While ad hoc sales and even coupons can be effective in driving some trial of store brands, the most effective promotion I have seen to build sustainable growth is a campaign approach that rewards shoppers when they reach tiered spending thresholds with basket-level reward such as $5 off instantly. When you are asking shoppers to reach store brand spending levels such as $50, $100, or even $150, the needle really moves on PL sales. Shoppers also like the instant gratification of saving instantly when they reach the threshold, as opposed to receiving a coupon for a return trip.
Another positive aspect of this approach lies in that fact that it does not reduce the shelf price of the product, therefore keeping the price points slightly below compatible national brand. This approach should be attractive to those retailers who might be cautious not to over-promote store brands at the risk of impairing long-term profit margin of those products.
And finally, post promotion, there is likely to be some halo effect in overall un-promoted store brand sales as long as the product is of good quality.
The best approach is to treat your store brand as though it’s a “real” brand. Your store brand reflects the image you are projecting for your store. Do not understate nor overstate your package design, nor your advertising, or promotions. And for goodness sakes, do not refer to your store brand as either private label or even a store brand, at least not to the public!
The best examples are those that stimulate trial of private label brands. While private label has enjoyed nice growth rates, particularly since the beginning of the economic difficulties in 2007, some customers are still skeptical about the quality claims versus national brands. How does a retailer combat such skepticism? Provide some form of sampling.
This approach is especially effective if the retailer’s brand provides a point of positive differentiation, beyond price. Every retailer carries every leading national brand. So what is the incentive to choose retailer A over B? There can be many points of differentiation, like customer service, store ambiance, quality of perishables, etc. However, offering an array of brands different from and better than the national brands, and therefore different from competitive offerings is a real way to gain sustainable market share.
Free samples are most effective when trying to get consumers to switch any items, but are particularly effective when the switch is to a store brand. The recession that we are living through (or are out of depending on your particular situation) has brought many new shoppers into the store brands arena and retailers are utilizing many methods to hold onto those users. Sampling and high value coupons will work but must be a piece of a strategy that includes insuring high quality items, a consistent promotion schedule and innovative items in the store brands lineup.
I agree with David when he said “treat your store brand as though it’s a real brand.” He is right on with this. It’s time grocers start promoting their brands as if they believe they are equally as good as the competitive, higher priced brands. And not from only the pricing model. Somehow store brands have assumed the role of price only, quality second items.
While I like all these PL promos, it’s the Food Lion free groceries at your door campaign that stands out. It’s a great combo of surprise, delight and savings that should garner the hoped-for result: enticing recipients into trying the brand. Jumping the trust and value hurdles (price, quality, taste) is obviously the goal of all these PL promos. The Publix campaign doesn’t really have the surprise element, but I also like it because it places their PL in an apples-to-apples comparison with the name brand and at no cost.
Kudos to the PLs for finding creative ways to get consumers to consume their brands. My only wish is that name brands were equally creative in their promos.
Some 20 years ago, the largest grocer in a major city dedicated the primary, most visible 4-foot endcap to one SKU… PL chocolate chip cookies. For 13 weeks. After that period of time, they had secured that market as the leading chocolate chip cookie, displacing the well-known national brand.
Step 1: Create awareness
Step 2: Create the “drumbeat” to drill in the messaging to the shopper
Step 3: Make it easy to 1)find, 2)define the value and 3)purchase for the shopper.
This one is simple. Retailers who treat their private label as “brands” will grow in excess of the brands. Those who treat their private label as a price proposition will be open to the swings of the economy.
The most effective tools will revolve around the product, i.e. the Publix Brand Challenge. With the need for advertising that the CPG companies execute, the retailers have plenty of margin to target directly to the product.
There’s a difference between a successful product promotion and developing a winning brand.
Where store brands transcend multiple categories, this broader perspective becomes even more important.
Retailers have not always done a great job of managing their PL brands across categories. Common issues of consistent quality, packaging and pricing can be seen regularly.
Without getting some of these basics right across the entire brand, retailers will struggle to sustain and grow PL brand engagement beyond the promotion.
There are a bunch of great comments here. I am amazed that grocery stores don’t do very much sampling of their private brands.
Safeway’s “Safeway Select” has a bunch of great products. E.g., we prefer their jams and jellies and make a point of buying them over national brands.
Similarly, Safeway’s store brand 32 oz. vanilla yogurt is far better than Dannon and Stonyfield and 1/2 the price.
Other products are equally good (salsas, Eating Right cereal brand, etc.). But we learned this because I am intrepid and willing to try items — and cheap, I’d rather spend less than national brands if I can.
Just think if they did good in-store marketing and promotions and taste tests, and at festivals too. Were I them, I’d rather do festival samplings than to go around a neighborhood giving free groceries.
They don’t do any substantive marketing at all, at least in the Washington DC market.
Now Giant, their standardization of products and branding across their store brands really seems to come at the expense of graphic design and exciting branding. Their logo is just so staid and “old” even though it’s a couple years old. They have some great products too (cereal, salsa, their house OJ not from concentrate) and their products are cheaper than Safeway’s, but not only do they not do sampling, their design and branding is years behind best practice.
Harris-Teeter and Whole Foods do a lot of sampling, but neither does much sampling when it comes to store brands either.
It seems from past promo activity that the “buy X of store brands and get x$ off” grabs the consumer’s save money NOW mindshare. Kroger has pushed this approach hard across its Fry’s brand — and it works — at least in my area of AZ.
PL is truly becoming better in quality and this means trouble for the name brands … I am a PL shopper — except for dog food and coffee creamer.
One very effective way I have seen is from Kroger (no surprise). Among other schemes mentioned, they tie a 10% discount to all PL items for seniors with a Kroger Plus card. That way, every day is a senior discount day and they make it simple, as Ralph states.
Publix comparison with National Brands has been very effective. The one challenge is the cost of the program since Publix is funding the cost of the free PL item. A unique promotion that was not mentioned in this article that I worked on last year with Ahold and continues to grow today is a “Buy a National Brand and get a complimentary PL brand for free.” For example: Buy Prego Pasta Sauce get Ahold Pasta Free. You are creating a meal solution and combining a National brand customers trust with a PL brand they are willing to try for free. Best part is the National Brand (in this case Prego) is funding the entire promotion including the Free Pasta. The items are displayed together in store and promoted in the circular. Results have been strong with big lifts for both the National Brand and PL brand.
I have been thinking about this issue further since my previous comment, and I think the combination of having certain high quality PL goods + SKU “rationalization/or not” can make a huge difference in shopping behavior.
I bike/don’t own a car, so that limits my shopping behavior. I shop at Harris-Teeter for deals, otherwise their general prices are too high, and the store I use is located at the start of a bike trail.
I live equidistant from a Safeway and a Giant. The Safeway is downhill coming home, the Giant uphill coming home, which shapes my decision making.
Generally, Giant is cheaper than Safeway. However, Safeway has a number of PL products we prefer, specifically 32 oz. yogurts, french bread, jelly, among others. Safeway store brand granola and salsa are equal to Giant, so either one is fine. Giant OJ is better. Giant also sells Shadybrook Farms turkey sausage for $1.50 to $2/package less than Safeway.
But we buy Edys frozen yogurt. (I don’t buy ice cream because of lactose problems.) Giant just did a SKU rationalization and went from 6 types of Edys frozen yogurt to two, vanilla and caramel praline.
While Safeway doesn’t carry my absolute favorite Edys frozen yogurt (Cappuccino Chip), they still carry two of the flavors I prefer that Giant no longer carries.
I think that must make the difference between 8 to 16 shopping trips/year that I now make at Safeway. Multiply this behavior across your customer base and it makes a big difference in terms of profitability and share.
All the more reason to invest a lot in PL development and branding (as I said b4, Giant’s packaging, although new, is staid and dated) to yield high quality products, to do sampling so people know the products are very good, and to be careful about SKU rationalization.
I am a big fan of PL brands. My Essentials is a great private brand sold at Delhaize America banners. It is the major brand along with Hannaford sold at Bottom Dollar Food, along side national brands.
If you can’t trust an orange flying piggy bank to guide you to absolute quality and savings on food and non-food brands, who can you trust? The truth is always found at the bottom of the sales receipt.
More Discussions
How Timely Is the Planned Lowe’s Website Renovation Focusing on Personalization?
Is Lowe’s being timely with its website reno, and is it right to be placed as…Should Costco Be Opening Members-Only Gas Stations?
Is this the right move for the warehouse club?As Boomers ‘Age Out of Peak Purchasing,’ How Can National Brands Retain Interest With Gen Z?
According to a recent First Insight study titled “Is Gen Z Still Choosing Your Brand,” while…
I like any PL promotion that puts the product in the shopper’s hands (or mouths). We buy a lot of Publix’s PL products because, in a blind taste test (which we’ve done at home with friends and family) we can’t tell the difference.
I think Tom Ryan forgot one, the Can Can sale by ShopRite supermarkets in the NY/NJ area each winter for the past 20 years or so. They are all good programs and as long as we remain in the Great Recession, consumers will continue to shop for lower prices. We have seen great improvement in the sales at the variety discount stores as consumers step down from department stores and specialty retailers. In the area of food, we step down from national brands to private label products in order to save money. Most of us from the business know that a lot of the private label products are produced for the retailers by the national brands anyway. So what’s not to like?
My vote goes for Food Lion for creativity and their dedication to no frills supermarketing in order to maintain their low price image.
While ad hoc sales and even coupons can be effective in driving some trial of store brands, the most effective promotion I have seen to build sustainable growth is a campaign approach that rewards shoppers when they reach tiered spending thresholds with basket-level reward such as $5 off instantly. When you are asking shoppers to reach store brand spending levels such as $50, $100, or even $150, the needle really moves on PL sales. Shoppers also like the instant gratification of saving instantly when they reach the threshold, as opposed to receiving a coupon for a return trip.
Another positive aspect of this approach lies in that fact that it does not reduce the shelf price of the product, therefore keeping the price points slightly below compatible national brand. This approach should be attractive to those retailers who might be cautious not to over-promote store brands at the risk of impairing long-term profit margin of those products.
And finally, post promotion, there is likely to be some halo effect in overall un-promoted store brand sales as long as the product is of good quality.
The best approach is to treat your store brand as though it’s a “real” brand. Your store brand reflects the image you are projecting for your store. Do not understate nor overstate your package design, nor your advertising, or promotions. And for goodness sakes, do not refer to your store brand as either private label or even a store brand, at least not to the public!
The best examples are those that stimulate trial of private label brands. While private label has enjoyed nice growth rates, particularly since the beginning of the economic difficulties in 2007, some customers are still skeptical about the quality claims versus national brands. How does a retailer combat such skepticism? Provide some form of sampling.
This approach is especially effective if the retailer’s brand provides a point of positive differentiation, beyond price. Every retailer carries every leading national brand. So what is the incentive to choose retailer A over B? There can be many points of differentiation, like customer service, store ambiance, quality of perishables, etc. However, offering an array of brands different from and better than the national brands, and therefore different from competitive offerings is a real way to gain sustainable market share.
Free samples are most effective when trying to get consumers to switch any items, but are particularly effective when the switch is to a store brand. The recession that we are living through (or are out of depending on your particular situation) has brought many new shoppers into the store brands arena and retailers are utilizing many methods to hold onto those users. Sampling and high value coupons will work but must be a piece of a strategy that includes insuring high quality items, a consistent promotion schedule and innovative items in the store brands lineup.
I agree with David when he said “treat your store brand as though it’s a real brand.” He is right on with this. It’s time grocers start promoting their brands as if they believe they are equally as good as the competitive, higher priced brands. And not from only the pricing model. Somehow store brands have assumed the role of price only, quality second items.
While I like all these PL promos, it’s the Food Lion free groceries at your door campaign that stands out. It’s a great combo of surprise, delight and savings that should garner the hoped-for result: enticing recipients into trying the brand. Jumping the trust and value hurdles (price, quality, taste) is obviously the goal of all these PL promos. The Publix campaign doesn’t really have the surprise element, but I also like it because it places their PL in an apples-to-apples comparison with the name brand and at no cost.
Kudos to the PLs for finding creative ways to get consumers to consume their brands. My only wish is that name brands were equally creative in their promos.
Some 20 years ago, the largest grocer in a major city dedicated the primary, most visible 4-foot endcap to one SKU… PL chocolate chip cookies. For 13 weeks. After that period of time, they had secured that market as the leading chocolate chip cookie, displacing the well-known national brand.
Step 1: Create awareness
Step 2: Create the “drumbeat” to drill in the messaging to the shopper
Step 3: Make it easy to 1)find, 2)define the value and 3)purchase for the shopper.
This one is simple. Retailers who treat their private label as “brands” will grow in excess of the brands. Those who treat their private label as a price proposition will be open to the swings of the economy.
The most effective tools will revolve around the product, i.e. the Publix Brand Challenge. With the need for advertising that the CPG companies execute, the retailers have plenty of margin to target directly to the product.
There’s a difference between a successful product promotion and developing a winning brand.
Where store brands transcend multiple categories, this broader perspective becomes even more important.
Retailers have not always done a great job of managing their PL brands across categories. Common issues of consistent quality, packaging and pricing can be seen regularly.
Without getting some of these basics right across the entire brand, retailers will struggle to sustain and grow PL brand engagement beyond the promotion.
There are a bunch of great comments here. I am amazed that grocery stores don’t do very much sampling of their private brands.
Safeway’s “Safeway Select” has a bunch of great products. E.g., we prefer their jams and jellies and make a point of buying them over national brands.
Similarly, Safeway’s store brand 32 oz. vanilla yogurt is far better than Dannon and Stonyfield and 1/2 the price.
Other products are equally good (salsas, Eating Right cereal brand, etc.). But we learned this because I am intrepid and willing to try items — and cheap, I’d rather spend less than national brands if I can.
Just think if they did good in-store marketing and promotions and taste tests, and at festivals too. Were I them, I’d rather do festival samplings than to go around a neighborhood giving free groceries.
They don’t do any substantive marketing at all, at least in the Washington DC market.
Now Giant, their standardization of products and branding across their store brands really seems to come at the expense of graphic design and exciting branding. Their logo is just so staid and “old” even though it’s a couple years old. They have some great products too (cereal, salsa, their house OJ not from concentrate) and their products are cheaper than Safeway’s, but not only do they not do sampling, their design and branding is years behind best practice.
Harris-Teeter and Whole Foods do a lot of sampling, but neither does much sampling when it comes to store brands either.
It seems from past promo activity that the “buy X of store brands and get x$ off” grabs the consumer’s save money NOW mindshare. Kroger has pushed this approach hard across its Fry’s brand — and it works — at least in my area of AZ.
PL is truly becoming better in quality and this means trouble for the name brands … I am a PL shopper — except for dog food and coffee creamer.
One very effective way I have seen is from Kroger (no surprise). Among other schemes mentioned, they tie a 10% discount to all PL items for seniors with a Kroger Plus card. That way, every day is a senior discount day and they make it simple, as Ralph states.
Publix comparison with National Brands has been very effective. The one challenge is the cost of the program since Publix is funding the cost of the free PL item. A unique promotion that was not mentioned in this article that I worked on last year with Ahold and continues to grow today is a “Buy a National Brand and get a complimentary PL brand for free.” For example: Buy Prego Pasta Sauce get Ahold Pasta Free. You are creating a meal solution and combining a National brand customers trust with a PL brand they are willing to try for free. Best part is the National Brand (in this case Prego) is funding the entire promotion including the Free Pasta. The items are displayed together in store and promoted in the circular. Results have been strong with big lifts for both the National Brand and PL brand.
I have been thinking about this issue further since my previous comment, and I think the combination of having certain high quality PL goods + SKU “rationalization/or not” can make a huge difference in shopping behavior.
I bike/don’t own a car, so that limits my shopping behavior. I shop at Harris-Teeter for deals, otherwise their general prices are too high, and the store I use is located at the start of a bike trail.
I live equidistant from a Safeway and a Giant. The Safeway is downhill coming home, the Giant uphill coming home, which shapes my decision making.
Generally, Giant is cheaper than Safeway. However, Safeway has a number of PL products we prefer, specifically 32 oz. yogurts, french bread, jelly, among others. Safeway store brand granola and salsa are equal to Giant, so either one is fine. Giant OJ is better. Giant also sells Shadybrook Farms turkey sausage for $1.50 to $2/package less than Safeway.
But we buy Edys frozen yogurt. (I don’t buy ice cream because of lactose problems.) Giant just did a SKU rationalization and went from 6 types of Edys frozen yogurt to two, vanilla and caramel praline.
While Safeway doesn’t carry my absolute favorite Edys frozen yogurt (Cappuccino Chip), they still carry two of the flavors I prefer that Giant no longer carries.
I think that must make the difference between 8 to 16 shopping trips/year that I now make at Safeway. Multiply this behavior across your customer base and it makes a big difference in terms of profitability and share.
All the more reason to invest a lot in PL development and branding (as I said b4, Giant’s packaging, although new, is staid and dated) to yield high quality products, to do sampling so people know the products are very good, and to be careful about SKU rationalization.
I am a big fan of PL brands. My Essentials is a great private brand sold at Delhaize America banners. It is the major brand along with Hannaford sold at Bottom Dollar Food, along side national brands.
If you can’t trust an orange flying piggy bank to guide you to absolute quality and savings on food and non-food brands, who can you trust? The truth is always found at the bottom of the sales receipt.