Driving Revenue and Growth with Non-Food Innovation and DifferentiationJanuary 8, 2018
Your engaged, loyal shopper may stop in to pick up a gallon of milk and some eggs, but they are also leaving with a bag of specialty coffee, seasonal party goods and the store’s private label paper towels. The non-food category purchases are becoming a cornerstone for revenue in the retail landscape. The good news, according to Daymon’s Category Solutions team, is that there are a variety of opportunities available for retailers and their private brands.
Research from Daymon has identified three non-food categories of growth that can help retailers differentiate products and perception—and drive traffic into the store.
“Pets are more of an important part of the family than ever,” says Bob DiNunzio, Director of Category Solutions for Daymon. “As people trend toward a healthy, organic lifestyle, pet food becomes an extension of what their owners are eating. And that premium food comes at a premium price.”
New natural pet food product launches include organic, grain-free and vegetable- and seafood-based products and treats from national brands like Blue Buffalo, Natural Balance and Wellness. Nationwide grocers are also getting into this extended-family market with private label products, such as Kroger’s Abound® brand.
Continuing on the health and wellness trend, consumers are looking for alternative to harsh chemicals to keep their living space clean. “This category is a ‘sleeper’ opportunity,” says Daymon Category Solutions Team Manager Kris Keynon Jackson. “While it is a small percentage of a retailer’s potential private brand offerings, the growth rate for green cleaning products is higher than normal and in the double digits.”
“Again, in this category, you see an extension of natural, organic and recycled products,” Jackson explains, noting this includes houseware items like paper products and seasonal items. “Whether it’s a product or a service, customers ultimately want to be as healthy as they can be. And items that are trendy and low-priced bring an excitement and joy in-store that people can’t experience when they purchase online.”
Whatever the non-food category, retailers have the opportunity to influence buyers early and often throughout their shopping journey.
A recent Mintel Online Shopping report shows 50 percent of online shoppers use social media for product recommendations. And we all know today’s shopper doesn’t want to miss out, especially if their friend posts about a “limited time only” item or item on social media. Retailers can capitalize on this with a media plan on social sites such as Instagram, Snapchat, Facebook and Twitter designed to propel a product to a shopper’s immediate wish list.
Retailers must also consider their digital purchase offerings to combat growing practices utilized by digitally-savvy customers, such as showrooming.
Today’s shoppers are looking for bargains. “You can have a mix of food and non-food value items, and any retailer can take this concept and tailor it to their store with their own private brand offerings,” says Jackson. She cites a large national mass merchandise retailer who is well-known for utilizing pop-up displays that feature value-priced items and that are strategically positioned right by the store’s entrance.
Make Displays Special
Seasonal displays with food, non-food or both are becoming the norm, according to Jackson. She gives the example of discount retailer Aldi, who “has brought private brand offerings into focus in the center of their store. They are constantly changing their center aisle and that is different than most American retailers.”
Jackson also notes national grocers are using pop-up displays to yield a sense of discovery in the store. “Retailers can partner that sense of discovery with a theme and their private label merchandise [to deliver something truly special].”
To learn more about partnering with Daymon to drive private brand innovation and strategy, contact Bob DiNunzio, Director of Category Solutions, at BDiNunzio@daymon.com.