Shopper Marketing - May 2018 - 8

8

PROGRAMS

SHOPPER MARKETING MAY 2018

Are Consumers Going 'Brandless'?
As brand loyalty wanes, retailers chase those who are drawn to the next small thing
By Ed Finkel

SCHAUMBURG, ILL. - Consumer behavior
is shifting from brand loyalty to trend loyalty, and online platforms like RangeMe
and Brandless are disrupting the "broken"
shopper model to capitalize on that shift,
according to executives of those two companies who delivered a keynote address on
digital disruption in March at the Path to
Purchase Summit.
"Today's consumers have more information, and they're looking to brands that
speak to them in a way that the big brands
can't," said Nicky Jackson, co-founder and
CEO of RangeMe, a business-to-business
marketplace that works with more than 400
retailers and 150,000 CPG brands in connecting retailers to suppliers. "At the end of
the day, it's about getting the right product
into the customer's hands at the right time."
Jackson estimated that 30% of consumers are "selectionists" who are drawn to
smaller brands that most specifically meet
their needs. Although RangeMe works with
major retailers including Target, CVS, Ulta,
Sephora and Whole Foods, three quarters
of those visiting the platform are seeking
out brands with less than $5 million in
revenue, and more than half are looking for
brands with under $1 million in revenue.
"This is big-bucks retailers being entrepreneurial, taking a chance on new brands,"
Jackson said. "That's what's driving consumers back into their stores."
Jessica Glendenning, director of merchandising for Brandless, which sells everything on its direct-to-consumer site

for $3, noted that 90 of the top 100 CPG
brands are currently losing market share.
She said Brandless is focused on "the reinvention of a broken system. We believe
that modern consumption does not make
sense. We're a country full of people who
are trained to think that better, safer - all
of those things - have to have a massive
price premium. We don't believe that has
to be the case."
Brandless particularly has targeted the
"conscious urban Millennial," who the
company sees as a value shopper. They
are "incredibly savvy, they do a ton of re-

" Today's consumers have more information,
and they're looking to brands that speak to
them in a way that the big brands can't."
Nicky Jackson, RangeMe

search, and they know what price they
want to pay," Glendenning said. More than
three quarters, 77%, "don't want to use the
brands they did growing up. Seventy-five
percent feel very strongly that brands and
retailers they support should be giving
back and making the world a better place."
To ensure the latter desire is met, Brandless lays out product certifications and
standards for each category, such as food,
beauty, household cleaning and housewares, and talks to potential partners to
make sure they are willing and able to meet
those standards. In household cleaning, for
example, its customers are very focused on
non-toxic items that are safe for children
and pets. "It's a category by category proposition," Glendenning said. The company
"listens" closely to social media feeds to
uncover issues that weren't on its radar.
Brandless reached the $3 price point after accounting for what Glendenning calls
the "brand tax," which refers to hidden
costs in the supply chain due to issues like

retailer requirements, broker and distributor margins, and trade funds. "The list goes
on and on," she said. "We're turning this
on its head. We work directly with manufacturers and sell directly to the consumer,
which takes out massive inefficiencies."
With 260 products currently in its portfolio and plans for approximately doubling
that by the end of 2018, the company takes
a deep dive with brand partners to squeeze
out any costs - for example, insisting that
toothpaste tubes do not come in an outer
box. "That costs money," Glendenning said.
"It seems small, but these are the types of
things that add up."
Whether focused on bricks-and-mortar,
online or omnichannel, retailers are definitely seeing more market share being taken by smaller, more innovative companies,
Jackson said. "The trend from brand loyal
to trend loyal is not going away," she said.
"Big brands can't innovate quickly enough.
The benefit of small brands is that they
SM
have the ability to react quickly."

" We're a country full
of people who are
trained to think that
better, safer - all of
those things - have
to have a massive
price premium. We
don't believe that
has to be the case."
Jessica Glendenning, Brandless



Table of Contents for the Digital Edition of Shopper Marketing - May 2018

Contents
Shopper Marketing - May 2018 - Intro
Shopper Marketing - May 2018 - 1
Shopper Marketing - May 2018 - 2
Shopper Marketing - May 2018 - Contents
Shopper Marketing - May 2018 - 4
Shopper Marketing - May 2018 - 5
Shopper Marketing - May 2018 - 6
Shopper Marketing - May 2018 - 7
Shopper Marketing - May 2018 - 8
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