Millennials shown to be heavy buyers of private brands


It’s hard to keep pace with the changing consumer these days, especially millennials, but supermarkets and regional grocers must persevere. 

That was a key message delivered April 20 in the second of four webinars, titled “From the Consumer: Understanding Disruption,” that Store Brands is conducting with the Food Marketing Institute (FMI), Daymon and IRI. The webinar series explores the recent “The Power of Private Brands” report by FMI’s Private Brand Leadership Council, Daymon and IRI that offers insight into private brand opportunities and challenges at supermarkets and regional grocers.

“Everyday we have consumers coming into the marketplace that are different than I am, different from my parents and different from their own parents,” said Heath Osburn, director of private brands for Ahold Delhaize, who participated in the webinar with Mark McKeown, client insights principal for IRI, and Heidi Dethloff, vice president of marketing at the Digimarc Corp. “These consumers have new demands. We have to engage with [them]. That’s not something new, but it has been evolving. It is overwhelming today.”

Today’s consumers, led by millennials, are mobile, active on social media and very demanding Osburn said. “We see people far more interested in what they eat, how they eat it, how it was manufactured and where it’s coming from,” he added.

Despite the challenges, McKeown said he was “very bullish” on future sales of private brands, noting that the “Power of Private Brands” revealed millennials are embracing private brands at supermarkets and are more likely to be heavy buyers of the products.

“When you have this type of generational shift, it tells you that there is something really unique going on there,” he added.

While millennials and other consumers are driven to purchase private brands to save money, they are also driven by purchasing quality products, McKeown said.

“If retailers want to convert more light buyers of private brands (to heavy buyers), they need to focus on quality,” he stated, noting that the supermarkets and grocers as well as mass merchandisers and club channels that are doing it well have become “curators” of private brands.

“They are saying, ‘We’re not going to mimic something that is already on the shelf. … We are going to deliver something that is high volume and unique to them that nobody else in the industry (is doing),” McKeown added.

He also stressed the importance of using social media to engage heavy buyers of private brands, especially millennials.

“It probably shouldn’t be any surprise that millennials are using a store app to get information from retailers, and they are using the newspaper the least of any generation,” he said. “This is what we call disruption.”

Dethloff cited Digimarc research showing that 61 percent of retailers say “investing in an effective digital/mobile strategy to improve the customer experience is essential” and that 69 percent of retailers say that “offering multimedia digital content in-store and/or via a mobile device impacts profitability.”

McKeown ended the webinar by pointing out that supermarkets and grocers need to identify the heavy buyers of their private brands so they can realize their growth opportunities.

“Make sure you are also looking at the generational part of that,” he added. “Because if millennials and data suggest that the generational shift is going in favor of private brands, that’s very favorable and could be your largest single-growth opportunity. … It’s also an opportunity to get millennials early on in their life cycles of buying with you.”

The next webinar in the series is set for Wednesday, May 17, at 2 p.m. EDT and will focus on new partner perspectives. Speakers include Doug Baker, vice president over private brands for FMI, and Joe McKie, a private brands expert. The webinars are hosted by Kevin Francella, brand director of Store Brands.

To listen to the first two webinars on demand and to sign up for the remaining two webinars, please visit The Power of Private Brands webinar series.

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