How exclusives can draw spend
The UK economy is suffering and there is talk of a Covid double dip recession, which paints a grim picture for the future of retail.
Planning ahead is understandably challenging, but could there be opportunities for drinks retailers to enhance their ranges to better suit the changes in consumer behaviour?
Quintessential Brands believes this is the perfect time for retailer-exclusive and own-label offerings to play a greater role in a spirits line up and the company recently carried out research in partnership with Kantar Worldpanel to better understand the data.
Quintessential retailer brands marketing director Neil Anderson, believes retailer brands are “an untapped gem within the category” because they can drive loyalty and offer the advantage of being able to bring products to market quicker. In addition, he says research shows they have strong appeal to younger consumers.
“In a recession, people do want to treat themselves,” he says. “They do spend more on a bottle of wine. During Covid it’s been the same. People decide they are going to treat themselves but obviously purse strings are tightened, and that’s where own-label or retailer exclusive brands can play a role.
“Retailers might say: ‘Should I have a retailer brand and own-label options and brands? Am I competing with myself?’ Well the answer is no, you’re not. Retailer brands attract younger consumers and they can be more agile.”
Hortus, as an example, has strong appeal to consumers looking for a quality product at a good price, but these consumers also might not want Lidl gin on the label.
Anderson says: “Hortus gin is a really good gin. And of course, what Lidl has done really well is bringing out flavours, so once you buy into the core Hortus brand you might move through the range and experiment with variants.
“Retailer exclusives have a lot to offer the category, and I think they will play a more prominent part over the next two, three or five years. Let’s be honest, as a retailer, you control its destiny and you can do what you like with it. You can promote it and you don’t have to answer to anyone, but the fact is, this research shows that 83% of retailer brands are incremental to the category.”
The research shows retailer exclusives attract an additional 1.4 million households to the gin category, with the potential for an extra £51.8 million in sales, while Anderson says retailer-exclusives also “massively over-index” on younger consumers, particularly those aged under 44.
He says: “This is the Holy Grail of the category. They are actually recruiting new people and bringing in younger consumers who want something new to engage with. They don’t want to be buying what their parents have been buying for the past 25 years”
“When supermarkets and convenience stores have a retailer exclusive brand it drives loyalty. When you buy Hortus you know you can’t buy it anywhere except Lidl.
“You could even have a retailer brand that could span categories, so Brand X could bring you gin, vodka, whisky. What a great way to get people purchasing across the category. It gives flexibility and agility in a category that’s not always flexible and agile.
“It is about talking to consumers and it is also about understanding the category data. The closer you can remain to the consumer through all of this I think the better you will know about what to deliver on the other side.”
Kantar Worldpanel and Quintessential Brands’ Understanding the Role of Retailer Exclusives research was compiled using data across the total off-trade for the year ending March 22, backed up by a survey in July from a sample of 2,181 consumers.