Stuart Elliott: Keeping a Public Eye on Private Labels

By Stuart Elliott Report Archives
Cover image for  article: Stuart Elliott:  Keeping a Public Eye on Private Labels

My inbox lately has been filled with emails encouraging me to buy organic tea, partially popped popcorn, notebooks, lemon basil scone baking mix, dish soap, trail mix, pizza, honey and kitchen towels.  The funny thing is, they're all from the same company.  The missives are being sent by Brandless, an e-commerce start-up that's offering a twist on the venerable marketing tactic of store brands, private-label and own-brand products.  Brandless aims to be a one-stop virtual shop for pantry staples and everyday merchandise, most of which are priced at $3 apiece and all of which are billed as "awesome quality without the markup" because, Brandless claims, it has "removed the BrandTax, the hidden costs you pay" when buying national, name-brand products.

It's interesting to contemplate the concept of a brand that isn't a brand; it sounds like a Zen koan.  Yet of course, a brandless brand is nothing new.  Shoppers with long memories will recall the generic products of the '70s and '80s with their plain packaging and black-and-white labels.  More recently, there has been a spate of online retailers creating products bearing their own brand names, from AmazonBasics at Amazon.com to Dollar Shave Club to Uniquely J at Jet.com.

You can add to those a lengthy list of private labels that have been popular for a while, among them Kirkland, at Costco; Trader Joe's, and 365 Everyday Value, at Whole Foods Market. Put them all together and toss in the house brands at giant supermarket chains like Kroger and Publix and, I'd suggest, we have a new phenomenon: public labels.

Public labels are different from private labels of the past, which soft-pedaled their presence on store shelves because they were aimed primarily at price-conscious shoppers, many of whom felt vaguely embarrassed that they weren't purchasing famous name brands.  I recall the days of social stratification at the A&P on Avenue L in Canarsie, Brooklyn, between shoppers who filled their carts with household names such as Del Monte and Wonder Bread and those who opted for the store brands such as Ann Page and Jane Parker.

Public labels, by contrast, proudly proclaim how they differ from the nationally sold, nationally advertised packaged goods produced by mass marketers.  And they seek to create a cachet or aura around themselves, as if they were public versions of private clubs; it's as if each had a motto on its website or front entrance proclaiming, "Aren't you smart to be enough in the know to buy this."

The rise of shopping as a sport has benefited public labels, in that if you're so inclined you can't wait to tell friends and family members about the great buy you got with such-and-such a store brand.

Likewise, the rise of online reviews has been good to public labels; strangers sharing shopping secrets can supplant the need to rely on the implied promise of a brand name to guarantee quality, reliability and value.  In other words, no longer are concerned consumers required to look for "Libby's, Libby's, Libby's, on the label, label, label."

It's little wonder then that, according to Nielsen data shared by PLMA, the Private Label Manufacturers Association, more than one out of every five products sold last year was a store brand, with sales of own-brands reaching nearly $160 billion.  (I had the pleasure recently of being interviewed for "PLMA Live!," a video series that appears on the PLMA website, and the discussion there generated some of my thoughts about public labels.)

How ought name brands respond to the rise of public labels? Well, it certainly would be nice if they'd increase their budgets for advertising, marketing and promotion, which seem these days to be cut more often than they're added to.  Time and time again, the Association of National Advertisers and the American Association of Advertising Agencies have stressed the stimulative effects of such spending on product sales.  But stressed-out chief marketing officers -- faced with short-term-oriented chief executive officers who shortsightedly deem advertising an expense instead of an investment -- often retreat when they ought to be advancing.

Another way name brands can tackle their public-label rivals would be to do more in the realm of what's known as cause marketing or pro-social marketing.  The idea that, say, a branded detergent stands for something more than getting your laundry whiter than white could be a powerful counterpoint to a store-brand detergent peddled largely on the basis of its lower price.

Take, for instance, Starbucks, which has taken stands on social and political issues like race.  "Starbucks is not profit-driven," declared Howard Schultz, who will step down as the firm's executive chairman later this month.  "Starbucks is values-driven, and as a result of those values, we have become very profitable."

Yes, it's corny, but there are customers who want to hear such messages from the executives who oversee the brands they buy or are thinking of buying.  And yes, there are risks to taking sides on contentious issues of the day, but it appears lately that it may be riskier to not announce where you stand than to do so. Besides, some public labels already are engaged in cause marketing, among them Amazon, with its AmazonSmile initiative that donates to charitable organizations.

As for all those emails from that most Zen of public labels, Brandless, yes, I gave in, thanks to an offer for free shipping, and ordered several products.  The stand-outs are the organic popcorn in two flavors (olive oil and sea salt; white cheddar), at two for $3.

Cookies shaped like maple leaves pale next to their apparent inspiration, Dare Maple Leaf Creme Cookies.  The Tree Free Lunch Napkins turned out to be made in China.  And the jury's out on the foam hand-soap, which I haven't tried yet.

Editor's Note: Look for the next Stuart Elliott Report on Wednesday, July 11.

Photo credit: Peter Bond/Unsplash

Click the social buttons above or below to share this content with your friends and colleagues.

The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.

Copyright ©2020 MediaVillage, Inc. All rights reserved. By using this site you agree to the Terms of Service and Privacy Policy.