This month’s edition of the Private Label Manufacturers Association’s (PLMA) web-based video magazine PLMALive! includes my latest story on the impressive private brand programs at online disruptors Boxed, Jet, and Brandless.
Private Label Stars
Boxed, Brandless and Jet which was recently acquired by Walmart are shaking up the traditional grocery channel with online models designed to drive low cost and convenience. Each is uprooting and changing how consumers think, behave and buy.
Private brands play the role of strategic differentiator for each of these disruptors.
Founded in 2013, Boxed has taken the traditional club store and folded it into an innovative, digital experience that Forbes called Costco for Millennials – all without a membership fee. With 133-Million dollars in venture capital funding, Boxed went from a scrappy startup in a garage to 100-Million in annual sales in less than four years.
The company’s curated online assortment of 15-Hundred products drove the retailer to adopt a nuanced, modern approach to design. The purpose of the packaging is not to capture the sale; it is to engage with customers in an authentic and playful way, with an occasional touch of wit and humor.
Boxed launched a private brand, Prince & Spring, in June 2015. The brand is named after two streets in New York City’s SoHo neighborhood that run parallel to their office. Prince & Spring now includes 63 products with dozens more set to launch through the rest of this year. Brand sales grew 1,065% from 2015 to 2016 with triple-digit growth forecast in 2017.
In August of 2016, Walmart stunned the retail world when they acquired Jet.com for 3.3-Billion dollars. Jet has ejected Costco’s private brand Kirkland Signature from the site and after linking Walmart and Jet fulfillment centers, introduced more than 300 SKUs of Walmart’s private label Great Value.
Most recently Jet announced the launch of its first private brand “Uniquely J”, a premium private brand created specifically to engage millennials. The new brand is the first created that throws aside the conventions of packaging created to close at shelf. It does not scream “buy me” or mimic a national brand. It instead engages the customer when the purple Jet shipping box arrives, it helps create surprise and delight in the opening experience and ultimately builds a relationship with the customer.
Finally, there’s Brandless. The online retailer, created by serial entrepreneurs Tina Sharkey and Ido Leffler, is proudly 100% private label. Its collection of essential products ranges from traditional packaged goods to office supplies, all priced for just 3-Dollars.
Although the name would have you believe that they are brandless, the experience is a comprehensively designed, immersive private brand. Their packaging brings their ethos to life with clean, modern design.
The Brandless disruption is unapologetically acting like a brand, blurring the line between retail and brand and using the internet, social media and the new economy to replace what it calls the “brand tax” — a tax that typically includes all the expenses related to old-school CPG brands, the largest of which is marketing and advertising. This enables Brandless to offer its “better for you” goods at 40% less than comparable products.
Retail is indeed changing. However, in these three disruptors, private label is the strategic differentiator which can help them succeed.