This article was originally posted on www.jwintelligence.com by Mary Cass.
“A new online store puts private labels in the spotlight.
What do you get when you cross the online dollar store with an upscale private label brand? That’s what new online store Brandless aims to find out.
Launching this week, Brandless aims to disrupt the consumer packaged goods (CPG) industry. Each product costs just $3, with more than 200 options across food, beauty, personal care and home goods. Most products tout their millennial-friendly values: many are free from GMOs, organic, fair trade, kosher, and gluten free. Shipping is $9, or free for orders past $72; a $36 annual membership lowers the threshold to $48.
“With Brandless, we wanted to invent something completely fresh and new,” say Tina Sharkey and Ido Leffler, co-founders of Brandless, in a press release. “Something that puts purpose into every product and message shared, and models a new kind of relationship between people and the companies built to serve them—directly, with integrity, transparency, authenticity, and democratized access.”
Brandless strips out what it calls the “brand tax” to focus instead on providing the highest quality products at the fairest prices. Brandless plans to focus on social media advertising, rather than television and print, passing those savings on to consumers. The company will also partner with Feeding America, a hunger relief nonprofit, to donate a meal every time an order is placed.
In many ways, the Brandless model hits a sweet spot for millennials. It’s transparent, ethical, and digital-first. Brandless’s pricing also stands to appeal to cost-conscious consumers, who are propping up dollar stores nationwide; according to Reuters, even millennials earning more than $100,000 per year upped their shopping at dollar stores over the three-year period ending in 2015.
Brandless is also a testament to rising power of private-label brands. Millennials, apparently less susceptible to the power of traditional branding and advertising, are already backing high-quality private label offerings—Trader Joe’s and Whole Foods 365 are just two prominent examples. In supermarkets, private-label brands reached sales of $118.4 billion in 2015, an all-time high, according to a 2016 report by the Private Label Manufacturers Association.
Brandless “widens the door and the entry point for virtually everyone to be able to start to buy their values, share their values, and live and eat their values in a way that has been inaccessible and prohibitive for most people living on average wages in this country,” Sharkey told Business Insider. The business model reflects a massive shift among consumers, who now seek out fresh, local, and healthy alternatives at every turn.
The CPG industry is facing its fair share of disruption. Brandless seeks to test the industry’s limits with a new business model built around radically different values. Successful or not, brands should be aware of the many factors shaping this new retail environment.”
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