Dive Brief:
- To improve digital sales of private brands, retailers need to boost the presence of these products on their homepages, improve product listings and better utilize banner ads and other promotions, according to the Food Industry Association’s newly released report on private label.
- The growth of private brands through e-commerce was 73% in 2020, according to retailers and manufacturers surveyed by FMI this year. Of those surveyed, 67% said their private label assortment was available online, with 14% of private label sales coming through e-commerce.
- Coupling the typically higher margins of private label with more e-commerce features to make them easier to find and top-of-mind for consumers may help grocers make online shopping more profitable and boost private label sales.
Dive Insight:
Elevating private label e-commerce is especially important right now because consumers tend to seek out the same brands, whether private label or name brands, when shopping online, FMI noted.
In its report, the trade group laid out 10 areas of improvement for grocers' online private label efforts, but noted that three in particular are key, starting with homepages. FMI said only 20% of food retailers analyzed in the research promote private brands on their homepages. It suggested grocers consider adding a dedicated space on their homepages to spotlight private label products and promotions linked to them to ensure shoppers know where to check for updates.
"As the initial shopper touch point, the homepage is a critical place to promote and highlight private brand products, and there is a significant opportunity to improve private brand visibility," the report noted.
Another top area the group recommends retailers focus on is product detail pages. Roughly 44% of food retailers said they include multiple images on their private label product pages, and just 48% include detailed product descriptions. FMI recommends retailers provide detailed product listings, and make sure private brands are adequately represented among product recommendations, which often appear at the bottom of listings. The report noted that while 72% of recommendations on private brand pages are for private brands, just under half of the recommendations that accompany name brand items include private label products.
FMI also noted grocers can make banner ads, badges and stickers more relevant to consumers by personalizing what's shown and promoting their own brands. While roughly half of the surveyed food retailers include banner ads on product listing and search pages, only 20% use them to promote private brands, and less than 20% use badges or stickers to call out private brands on product listings.
The report noted seven other areas retailers can focus on to improve store brand e-commerce sales, including better representation through site search, navigation menus, product and category listing pages, blogs, recipes, new product sections and digital circulars.
FMI suggests retailers add private brands as a separate category in dropdown navigation menus and online brand filters. Grocers should also consider using logos or icons to identify store brand items, placing them as the first listing and adding a section for new or featured products, the report noted. These suggestions are all aimed at boosting brand awareness and consumer ease of finding private label offerings.
FMI used insight from FitForCommerce mystery shoppers of 25 food retailers to inform the report, along with IRI data, consumer survey data from FMI and The Hartman Group, industry feedback and interviews with senior private brand industry executives, including retailers and manufacturers.
Some grocers are already making strides with promoting private label online. Whole Foods Market, for example, consistently includes 365 by Whole Foods Market products in its recipes and promotions, like its recent summer giveaways with The Weather Channel. Meanwhile, Safeway has categories on Instacart for its O Organics and Open Nature brands.
