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Brand Strategy

National CPG Brands Face A New Challenger

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Brandless Brand Strategy

Loyalty, especially in certain categories, is becoming harder for some brands to earn. In just the last few years we’ve seen direct-to-consumer brands like Dollar Shave Club and Warby Parker shake things up, especially with more savvy, conscious consumers. In fact, this cohort of savvy consumers is breaking with tradition in what they want and expect from brands and it’s changing where their loyalty lies.

The CPG sector seems especially vulnerable. Even with online shopping and gimmicks such as Amazon’s Dash button, it’s easy to argue that loyalty to a brand of laundry soap or paper towels is passive. No doubt recognizing this passive notion of loyalty among basic products and fusing it with the direct-to-consumer trend, a new store called Brandless has launched and it takes aim squarely at mega-brands like P&G and General Mills. As Gillette has found with Dollar Shave Club’s disruptive impact, the larger brands have every reason to be worried.

In a Forbes article, Brandless CEO Tina Sharkey says, “It felt like modern consumption was really broken,” and goes on to argue that millennial consumers don’t want to buy their parents’ brands – that all brands are too expensive and marked up to cover distribution, warehousing and costs for retail spaces. This is what they call “the brand tax.”

To eliminate this “brand tax” they took a consumer-first approach rather than immediately go after a competitor, and studied what products consumers use most often which did not deliver good perceived value. Then they worked with manufacturers with the capacity to produce “better-for-you” products in quantity. In each case they created one product – organic, non-GMO, without additives, per category rather than providing multiple choices for consumers. This also keeps costs down and focuses the purchasing process by keeping it simple so that consumers can find “just what matters” to them.

Each product is white-labeled based on what it is, and they all sell for $3 – a pricing gimmick like old style Dollar stores. In addition, a subscription model is also available which might infringe on both Costco and Amazon Prime models. Sharkey acknowledges, “We’re unapologetically a brand, but we’re reimagining what it means to be a brand today,” and that’s the key.

For Brandless, not only does being a brand involve offering a lineup of products at great prices, but also giving back the community; a philosophy of “doing what matters” that is baked in to the company’s values. By emphasizing transparency, taking a staunch position against the familiar, untrustworthy narratives coming from Madison Avenue, and aligning itself with a set of powerful, shared values of their target audience, it’s no wonder investors are calling Brandless ‘the Proctor and Gamble of millennials.’

While only time will tell if consumers buy into the brand, Brandless is tapping into an important trend that shows a shift in the kinds of relationships some people want to have with brands. Financial pressure, busy cluttered lifestyles, and disdain for traditional marketing have created a substantial opportunity to cut through the noise and drill into what truly matters for the target audience. In emphasizing quality of ingredients, importance of community, and brainless choosing, pricing and delivery, Brandless seems to be onto something.

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