The following is a guest post from Meghan Howard, vice president of sales at Chicory, the leading digital shopper marketing platform for CPG and grocery brands.
Typically, during the Q4 holiday season, CPG brands rev up marketing as consumers trade up for premium and name brands to impress houseguests and ensure flavorful dishes.
But this year, IRI predicts that consumers will increasingly turn to value as the ultimate deciding factor of the products they purchase. In fact, Chicory conducted a survey of 1,086 Americans in September to explore consumer holiday habits, and found that 70% of consumers will be more price sensitive when shopping for groceries this year.
In the same survey, Chicory found that 17% of consumers will choose private label over national brands this holiday season in order to save money, adding to the already heightened competition between private label and national brands.
Here are some ways brands can compete with lower-priced competitors and private label brands this holiday season:
Competing with private label during the holidays
What will make the difference for brands will be their communication of the quality and flavor of their products over store brands. Although 70% of consumers will be more price conscious this holiday season, 52% of consumers still consider quality to be the primary consideration when choosing brands or products for their holiday celebrations.
CPG brands will need to strategically educate consumers that not any old brand will do. To do so, brands must think about how the consumer will think about the construction of their favorite holiday dishes and what ingredients go into them. Then, they’ll have to convince consumers which name-brand products are expendable and which are not.
For instance, green bean casseroles surge around Thanksgiving, as one of the holiday’s most popular dishes. If consumers are on a budget, they’ll consider the components of green bean casserole that can’t be swapped out for value-priced products because they’re key to the overall taste, texture and consistency of the final dish. For some, French’s Crispy Fried Onions may be that product that consumers can’t sacrifice, but they may not mind compromising on the green beans. As such, those consumers will keep their name-brand fried onions and opt for the lower-priced, private label cans of green beans to balance out the cost and savings.
More than ever before, brands need to double down on branding, anticipating uses for their products during the holidays, and dispelling any hesitation when it comes time to purchase. Brands need to be seen as the brand that makes holiday dishes have that nostalgic taste. Consumers should head to the store thinking that the, say, branded onions are vital to green bean casserole if a brand is seriously going to succeed.
Brands need to make sure that they’re advertising their superior flavor and better quality over private label products because this is what will make the difference in the consumer’s mind.
Knowing that Chicory’s survey reveals that consumers will be more likely to choose private label to save during the holidays, brands must also use messaging that suggests the holidays are the time to go all out or splurge on a few items, especially to those who may have switched to private label items months ago to help cut costs. Potentially, going back to name brand helps cut through the fatigue so many are feeling, and the holidays are the perfect justification for a small break from it all.
Competing with premium private label
However, there’s the added challenge of retailers taking advantage of consumers’ desire for premium products and releasing their own premium products or brands to challenge consumers’ views of private label as lesser quality.
Target, for instance, recently announced the launch of their Good & Gather Signature line of premium food and grocery products. It’s no coincidence that Target timed this just as consumers move into the Q4 mindset of family celebrations and thinking about food.
With competition like this — and, no doubt, more to come — CPG brands need to make sure that they’re taking advantage of unique branding and connecting closely with what consumers want.
Chicory’s survey revealed that value is a bigger factor than loyalty, so brands must have copy and imagery that plays into the nostalgia and tradition of the holidays — both things that they may miss this season, especially as 61% consumers are less likely to host holiday celebrations this year compared to last year. If private label is going for both the value and quality play, then brands need to double down on tapping into the nostalgia that consumers feel with Del Monte green beans and Kraft Stove Top stuffing at the holiday table.
Additionally, survey results showed that about one in four Americans will be cooking holiday meals for the first time this year, rather than attending other holiday parties. So brands must appeal to first-time cooks who are taking on the challenge of preparing Thanksgiving dinner. Getting into the pantries of these brand new consumers and getting them away from premium private label, which may not have the same lesser quality connotation for a new cook unfamiliar with brands on the grocery store shelf, is a huge opportunity for brands by communicating ease of use and flavor.
To do so, brands should specifically call out in what ways their products are quick and easy solutions to what may seem like long and complicated recipes, as well as how they can deliver on taste and quality that are sure to impress guests during a new host’s first holiday gathering.
Competing with other national brands
When brands are running advertising campaigns before and during the holidays, they shouldn’t skimp on creatives. They should be ready to swap in a holiday-specific one that calls out the holidays — quality time with family, Thanksgiving, even dressed-up dinnertime meals and featuring any holiday packaging, if applicable.
Additionally, brands must be able to communicate that their products can cater to non-holiday eating occasions to expand use cases for their products. Brands should encourage customers to try alternative ingredients and products on, say, the weekend before Thanksgiving, or when consumers are tired of turkey and ham.
Particularly this year, facing a different holiday season than ever before, when 71% of consumers plan on celebrating in smaller groups, brands need to shift messaging to align with smaller celebrations and not the major holiday parties that we’re used to in previous years.