FMI Research IDs Where Private Brands Excel, Fall Short in E-Grocery

“The study found that national brands continue to engage consumers in ways private brands have yet to fully utilize,” Baker told Store Brands. He highlighted 10 areas where private brands “fall short of manufacturer brands in digital real estate,” such as on the homepage, where only 20% of food retailers that were analyzed promoted private brands. Additionally, just over four in 10 food retailers included multiple product images on private-brand product detail pages, and about half of food retailers included banner ads on product listing pages and search pages, but only 20% of the banner ads promoted private brands.

Those findings in the report specifically came from consultancy FitForCommerce, which mystery shopped 25 food retailers’ e-commerce sites and identified 10 opportunities for food retailers to effectively target consumers with private-brand offerings. The FMI report also includes data from a consumer survey from FMI and The Hartman Group, a survey of food retailers and manufacturers, interviews with senior private-brand leaders, and e-commerce data from IRI.

Other key findings from the report include ways to leverage search optimization for store brands, IRI’s e-commerce sales numbers for the food industry as a whole (up 25% for 52 weeks ended Aug. 8) and in-depth demographic details. For instance, when shopping online, more than three-fourths of shoppers use digital coupons, and, further broken down, 80% of Gen Z/Millennial shoppers leverage coupons compared with Gen X shoppers (78%) and Boomers/mature shoppers (63%).

The report also noted how shoppers tend to seek private brands online versus national brands online, with 37% of shoppers seeking a private brand by name in a search, compared with 43% for a national brand. However, private brands beat national brands, according to the The Hartman Group research in the study, with 34% of shoppers finding a private brand in their order history versus 31% for a national brand; 36% have a private brand saved as a favorite versus 29% for a national brand; and 28% find a private brand via a referral section in a search such as a “you may also like” recommendation, compared with only 18% for a national brand.

Finally, the report noted that three-fourths of those surveyed found private brands met expectations or exceeded them over the past year when looking at online grocery, but found that private brands face a challenge in e-commerce in that most of the industry hasn’t reached a point of differentiating private-brand KPIs between online and in-store to truly gauge how well private brands are performing online. The report found 81% of those surveyed said that they don’t measure private-brand KPIs differently for online versus in-store.

This is the second report from FMI this year under its “Power of Private Brands” series. Earlier, the association released a report that highlighted the importance of  suppliers and retailers working together.