Bloomberg Businessweek - USA (2019-11-11)

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

With Bloomberg Opinion

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Businessweek

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November

11,

2019

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