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Dive brief:
- To improve private label digital sales, retailers need to strengthen the presence of these products on their homepages, improve product listings and make better use of banner ads and other promotions, according to the Food Industry Association’s recently published report under private label.
- Private label growth through e-commerce was 73% in 2020, according to retailers and manufacturers surveyed by IMF This year. Of those surveyed, 67% said their private label assortment was available online, and 14% of private label sales came from e-commerce.
- Pairing the typically higher private label margins with more e-commerce features to make them easier to find and top of the list for consumers can help grocers make online shopping more profitable and drive sales of private labels.
Dive overview:
The increase in private label e-commerce is particularly significant right now, as consumers tend to look for the same brands, whether private label or brand name, when shopping online, a noted IMF.
In its report, the business group outlined 10 areas for improvement for grocers’ online private branding efforts, but noted that three in particular are critical, starting with homepages. The IMF said that only 20% of grocery retailers analyzed in the study promote private labels on their homepages. This suggested that grocers consider adding a dedicated area on their homepages to highlight private label products and related promotions to ensure shoppers know where to check for updates.
“As the first point of contact with the buyer, the home page is an essential place to promote and showcase private label products, and there is a significant opportunity to improve the visibility of the private label.” , notes the report.
Another priority area the group recommends retailers focus on is product detail pages. About 44% of grocery retailers said they include multiple images on their private label product pages, and only 48% include detailed product descriptions. IMF recommends that retailers provide detailed product listings and ensure that private labels are properly represented among product recommendations, which often appear at the bottom of listings. The report noted that while 72% of recommendations on private label pages are for private labels, just under half of the recommendations that come with branded items include private label products.
IMF also noted that grocers can make banner ads, badges and stickers more relevant to consumers by personalizing what is shown and promoting their own brands. While about half of food retailers surveyed include banner ads on product listings and search pages, only 20% use them to promote private labels and less than 20% use badges or stickers to call out brands. private on product lists.
The report noted seven other areas retailers can focus on to improve the store brand’s e-commerce sales, including better representation through site search, navigation menus, product listing pages and categories, blogs, recipes, new product sections and digital flyers.
IMF suggests retailers add private labels as a separate category in drop-down navigation menus and online brand filters. Grocers should also consider using logos or icons to identify store-branded items, placing them as the first list and adding a section for new or featured products, the report notes. These suggestions are all aimed at building brand awareness and making it easier for consumers to find private label offers.
IMF used information from FitForCommerce mystery shoppers from 25 grocery retailers to inform the report, as well as IRI data, consumer survey data from IMF and The Hartman Group, industry commentary and interviews with senior executives in the private label industry, including retailers and manufacturers.
Some grocers are already making strides in promoting private label brands online. Whole Foods Market, for example, consistently includes 365 Whole Foods Market products in its receipts and promotions, like her recent summer giveaways with The Weather Channel. Meanwhile, Safeway has categories on Instacart for its O Organics and Open Nature brands.
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