While private label products are a perennial favorite among loads of savvy shoppers, many grocery executives are dissatisfied with their performance in the segment. These executives know that private label success is critical, and many plan to ramp up the resources behind their own brands this year, according to a new report from Incisiv and Wynshop’s Grocery Doppio platform in partnership with FMI — The Food Industry Association.
The “State of Digital Grocery Marketing: Unlocking Private Brand Growth” report surveyed 117 senior grocery executives and found that less than 40% are satisfied with their private brand performance. Grocers cite limited in-house business resources, inadequate budget and limited software/solutions, respectively, as the top three factors holding private label marketing back. Key sources of dissatisfaction include digital asset quality, diversity, personalization, quantity and automated delivery.
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“Grocery executives are in consensus that private brands are critical to growth in 2023,” said Gaurav Pant, chief insights officer of Incisiv and Grocery Doppio. “But they also agree that private brands need an overhaul to live up to their growth potential.”
Some 83% of respondents believe private label should be a C-level priority, with 85% planning to increase the quantity of digital assets for private label this year and 83% expanding their digital marketing campaigns.
The segment also lags behind national brands in marketing, the study found, with 97% of grocers deploying emails and 95% using banner ads for name-brand marketing, but only 32% and 16%, respectively, doing the same for private brands. Digital circulars are the most widely used tactic for promoting private brands at 42%, but it ranks well behind deployment for name brands at 86%.
“Digital is the most effective and economical way to promote private brands,” said Barry Clogan, chief evangelist at Wynshop. “But with limited marketing department resources, grocers need sophisticated digital capabilities like omnichannel personalization and automated campaign deployment to capitalize on the private brand opportunity.”
“Awareness, inspiration, and persuasion may be driven almost exclusively through online channels, but acquiring these new digital first customers is critical to the long term survival of our stores,” Clogan also stated in the report.