Store Brands

JAN 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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2015 The contents of this publication may not be reproduced in whole or in part without the consent of the publisher. The publisher is not responsible for product claims and representations. 6 Store Brands / January 2017 / Online grocery: What's in it for private label? 've heard how online grocery is going to revolutionize the retail industry. I've also heard how online grocery is flopping like a bad Nicholas Cage movie. So what do retailers believe about online grocery? And what impact do they think it could have on sales of their private brand products? To get some answers on the subject, I recently spoke with Samir Bhavnani, a vice president at 1010data, a data management and analytics firm. Bhavnani specializes in grocery analytics. Like a lot of folks, Bhavnani likes to shop, including at the supermarket. But that doesn't mean that Bhavnani believes that online grocery will go the way of New Coke. Why does Bhavnani believe that online grocery will succeed? One word: technology. "The world is changing, and it's changing very rapidly," he says. He's right. For all we know, consumers will be able to "beam" a pound of salami and a bag of chips, a la "Star Trek," to their homes 25 years from now. Talking to Bhavnani reminded me of a presentation I heard a few years ago from a guy who makes futurism a full-time job. Now, this guy, Jack Uldrich, isn't some phony palm reader you see on the boardwalk in Atlantic City. He is a respected futurist who helps companies prepare for the future by gaining foresight into the things that will eventually impact the way they do business. I remember Uldrich saying that in five years we will know twice as much as we know now about technology and science, and in 10 years we will know four times as much as we know now. And Uldrich said the knowledge we gain will change what we do in "profound ways." Right now, online grocery might not look like a burgeoning opportunity to some retailers. But don't be fooled, Bhavnani says. "Any retailer that acts like it's 1995 is in big, big trouble," Bhavnani warns, noting that more consumers will continue to buy groceries via their cell phones and tablets and through convenient apps. So, what does all of this mean for private label? A few things: • Consider that millennials are likely to lead the charge in online grocery, given that many of them grew up carrying around iPhones, not teddy bears. • Also, according to a new study by the Food Marketing Institute (see our exclusive analysis of the report beginning on page 28), millennials are embracing private label more than any other age group and have a greater propensity to be heavy buyers of such products. "The millennial generation has fundamentally changed how retailers should go to market," Bhavnani says. But it's not just millennials. Bhavnani expects aging baby boomers to take more advantage of online grocery in the future. Bhavnani realizes that all retailers are different and that many things, from geography to number of stores, will impact how they approach online grocery. While he's not suggesting they go all in at once, he does advise retailers to keep testing and learning the concept. "Private label manufacturers and retailers have a very strong opportunity to built private brands [through online grocery]," Bhavnani states. May I leave you with an enlightening quote from Mark Twain that, all these years later, makes sense as it pertains to online grocery: "The secret of getting ahead is getting started." SB Editor's Note Lawrence Aylward, Editor-in-Chief [email protected] Business Intelligence for an Evolving Market 570 Lake Cook Rd. Suite 310, Deerfield, IL 60015 (224) 632-8200 • Fax: (224) 632-8266 Brand Director Kevin Francella (973) 264-4389 [email protected] EDITORIAL Editor-in-Chief Lawrence Aylward (330) 635-2586 [email protected] Managing Editor Carolyn Schierhorn (224) 231-6359 [email protected] Contributing Writers Kathie Canning, Dana Cvetan Rich Mitchell ADVERTISING & SALES Associate Brand Director Suzanne Caputo (201) 855-7628 [email protected] Regional Sales Manager Mike Mandozzi (224) 632-8194 [email protected] EVENTS • MARKETING • DIGITAL • RESEARCH • CIRCULATION EVENTS SVP, Events & Conferences Maureen Macke (773) 992-4413 [email protected] CUSTOM MEDIA VP, Custom Media Division Pierce Hollingsworth (224) 632-8229 [email protected] MARKETING VP, Marketing & Communications Bruce Hendrickson (224) 632-8214 [email protected] Director of Market Research Debra Chanil (201) 855-7605 [email protected] AUDIENCE DEVELOPMENT Director of Audience Development Gail Reboletti [email protected] Audience Development Manager Shelly Patton (215) 301-0593 [email protected] List Rental The Information Refinery (800) 529-9020 Brian Clotworthy Subscriber Services/Single-copy Purchases 978-671-0449 [email protected] ART/PRODUCTION Director of Production Kathryn Homenick (973) 358-4875 [email protected] Advertising/Production Manager Bette Boyers (224) 632-8251 [email protected] Fax: (888) 445-1123 Creative Director Jeff Bowes [email protected] CORPORATE OFFICERS Executive Chairman Alan Glass [email protected] President & CEO Peter Hoyt [email protected] Chief Operating Officer Richard Rivers [email protected] Chief Brand Officer Jeff Greisch [email protected] Chief Financial Officer Chris Stark [email protected] Chief Business Development Officer & President, Ensemble IQ Canada Korry Stagnito [email protected] Chief Customer Officer/ President of Strategic Platforms Ned Bardic [email protected] Chief Digital Officer Joel Hughes [email protected] Chief Human Resources Officer Greg Flores [email protected]

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