2019-11-11_Bloomberg_Businessweek

(Steven Felgate) #1
Storebrands havecome a longway
fromblahboxesofknockoffCheerios:
Americansareincreasinglypilingtheir
virtual andIRLshoppingcarts with
in-storebrandsofeverything,whether
coffee,batteries,suitjackets,ormidcen-
turymodernsofas.Becausestoresdon’t
havetohandoverpartofeachpurchase
pricetoCoca-ColaCo.orLeviStrauss&
Co.,they’reoftenabletoselltheirown
brandsforless—andmakemoremoney.
HousebrandsintheU.S.datetoat
leastthe19thcentury,buttheirpopu-
larityhasebbedandflowed.Tothesurpriseofmany,a
numberofstorebrandshavemanagedtobuildloyalfol-
lowingsoftheirowninthelastdecade.What’smore,
they’vemanagedto
dosoevenwhilethe
economywasstrong,
which would seem
to remove price as
a factor and may
marka moresignifi-
cantchangeinwhat
Americans buyand
howcompanies sell
themstuff.
Traditionally,the
drawofa storebrand
waslowprices,not
styleorquality.The

22%


84


ILLUSTRATION

BY

GEORGE

WYLESOL

● HOUSERULES
Can’targuewiththisgrowth:Online
furniture companyWayfairInc.got
69%ofitsrevenuefromhouse
brandsin 2018,upfrom6%in 2015.

● DON’TCALLITGENERIC
Aboutone-fifthofU.S.spending
onhousewaresis forprivate-label
products,accordingtomarket
researcherNPDGroupInc.

newgenericsplaybookisworking,in
part,becauseyoung,web-firstcom-
paniessuchasDollarShaveClubInc.
andCasperSleepInc.havemadepeople
feelmorecomfortablereachingbeyond
thehandfuloftried-and-truebrands.
Amazon.com Inc. has attempted
everytacticpossibletopushitshouse
brands,includingappealspurelyon
valueandstartinganorganicfoodline
anda clothingbrandforthefashion-
consciousbro.Notallhavebeensuc-
cessful,butthee-commercekinghas
pavedthewayinapplyingconsumerdatatocreatenew
productsandnudgepeopletotrythem.
Thisisn’tmerelyan“internetchangedeverything”
story—evenif,OK,that’spartofit.Thesamesetoftac-
ticshasalsoworkedfortraditionalretailers.Walmart,
CostcoWholesale,Target,andothershavefocusedon
private-labelproductstowhichtheycangiveanidentity
andappealbeyondprice.Costco’sKirklandSignatureline
is positionedaslessexpensive,deliciousfoodthatpeople
can’tbuyanywhereelse.AndNordstromInc.linkedup
witha socialmediastarona lineofstore-brandclothes
thatwaspopularenoughtocrashtheretailer’swebsite.
Yourfavoritebrandsfromchildhoodprobablywon’t
goaway.Butthey’regoingtohavetoworka lotharder
togetshoppers’attention.Andit’sgoingtogetuncom-
fortableforproductsthatarestuckinthemiddleground
betweentheiconicandthecheapchic.<BW>�Ovideis a
techcolumnist for Bloomberg Opinion

ByShiraOvide


Shoppers Are Learning That


Brands Aren’t Everything


◼ LAST THING


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