Growth

How Brandless built one of the most powerful brands in CPG

There was once a time—not so long ago—when buying the “store brand” was a downgrade.

When it came to your toothpaste or cereal or shampoo, and so on, you bought brand names: Colgate, General Mills, Unilever, Procter & Gamble. 

In mid-20th century America, when people were more likely to shop at local, unbranded grocery stores, these brand names served an important purpose. They gave people a consistent product to buy week after week. They built trust—you knew the Coke you bought today would taste the same as the Coke you bought last week. 

Today, though, the situation is flipped. Retailers have consolidated: Walmart, for example, owns more than 20 percent of all grocery market share. The stock of products, on the other hand, has exploded in variety. The average American grocery store offers about 38,900 different products.

The overwhelming amount of choices that we have each time we walk down a grocery store aisle and the growth of retailers into a real force in the commercial landscape have helped bring about a private label revolution that is changing the way that people around the world think about shopping.

People are excited about generic, store-brand, private labels. Store brands have been elevated to eye level placement and given endcaps in grocery aisles. For a large percentage of goods, there’s no real distinction in quality—but there certainly is one in price. 

As the ability of retailers to create their own private label versions of goods has increased, and the internet has reduced the need for brick-and-mortar shopping, the loyalty that people once felt for the brands they kept in their homes has slowly shifted to the places where they shop: from Trader Joe’s, to Costco, to Amazon. 

In the midst of this revolutionary transformation is where we find eCommerce company Brandless.

Brandless: from 0 to $50m

Founded in 2015 by Tina Sharkey and Ido Leffler and officially launching to the public on July 11, 2017, Brandless has crafted their business model to take advantage of rosier attitudes toward private label goods. And so far, they’ve been right.

Brandless is not itself a private label company—they have more in common from an operational standpoint with other consumer packaged goods (CPG) companies like Unilver, than with a traditional store brand like Wal-Mart’s Great Value. Yet, Brandless has carefully crafted an image that plays on many of the associations consumers have with private labels, like value and convenience, and paired that with aspects of a more traditional brand, such as quality and a social mission.

Since 2015 Brandless has grown their product offering from the 110 available at launch to over 300. From bath tissue and hand soap to maple syrup and candy bars, Brandless offers the essential goods you need to stock your pantry and cabinets at just $3 per item. For a $36 per year membership fee, Brandless throws in free shipping  and some philanthropic giving on your behalf (more on that below). 

Brandless bestsellers via Brandless.com

By positioning themselves as the smart, healthy, and socially conscious alternative to Trader Joe’s or Whole Foods, Brandless has grown quickly into a powerhouse of the eCommerce consumer packaged goods market. They reached over one million total visits in January 2018, and their website traffic continues to increase.

In the two years since their founding, Brandless has raised $49 million in funding to become a category-defining business in the space. They do this by focusing on the buying experience, playing with customers’ expectations for a CPG brand, engaging with their community, and focusing on social responsibility.

Eliminate the paralysis of choice

Brandless offers just over 300 different products across 60 different categories. It’s a minuscule selection in comparison to a brick-and-mortar supermarket or even from an eCommerce standpoint, but these items represent the core essentials needed by a typical American household.

Rather than follow in the steps of their predecessors and attempt to offer almost every conceivable item a person might want, Brandless set out to sell the best versions of what people actually need. Offering a limited selection of products and bundling them together into curated packages helps Brandless cut down on their costs as well as the logistical complexity.

The focus on curation as opposed to collection positions Brandless as a knowledgeable and opinionated brand, one that knows the real value of the products they provide.

Instead of wading through page after page of Amazon reviews to find the slight differences between this hand soap and that hand soap, Brandless makes the decision for their customers. The focus on curation as opposed to collection positions Brandless as a knowledgeable and opinionated brand, one that knows the real value of the products they provide.

The focus isn’t on the products themselves because Brandless knows that people are accustomed to store brands and trust store brands. Their message is clear: come to us because we’re a store brand. Don’t come to us because the products are better—we know you won’t believe that—come to us because the experience is just much simpler.  

At the time of their launch in 2017 Brandless offered a grand total of 110 products, each of which was priced exactly the same at $3. Offering a significantly smaller number of products to their buyers helped Brandless take away the potential for choice paralysis. Their customers were only offered the kind of products that Brandless deemed as essential.

Example bundles from Brandless.

They also offered package deals on similar products, bundling items like napkins, facial tissues, and bath tissue together for easier purchase. These curated buying options gave customers convenient way to buy items that Brandless found were typically purchased together. Limiting the number of available products and offering essentials together in a one-click bundle helped streamline the buying experience for their customers even further.

In eCommerce, most of the real cost of getting a customer comes at the beginning—when you first get a person to come to your site and make a purchase. For great eCommerce businesses, that first step is the beginning of a long customer relationship. 

Brandless has positioned themselves in such a way that once you learn about them, they can become a one-stop-shop for all kinds of essential, everyday products. Their customers can certainly purchase many of the same type of goods at Walmart or CVS (either house or national brands) but choose to shop at Brandless due to the overall experience. Customers know they can purchase all of their essentials in a single location, bundled together, without having to wade through shelves (or pages) of alternatives, and never have to worry about forgetting any items by mistake.

Play on customers’ existing bias

Private label goods have been associated with lower quality in the past, but that has changed. Between the second and third quarter of 2017 private label has outperformed other manufacturers, most of which have seen either flat or negative growth since 2016.

Private label performance in the U.S. via Nielsen.

The perceived quality of private label goods has never been higher, and Brandless, even though they’re not technically a private label, is capitalizing on that as well.

“We saw people becoming paralyzed by the paradox of choice. We approached the design of our packaging to create a simple visual system that distills the most important information.” – Brandless, via The Dieline

Brandless’s product packaging screams “cheap” or “generic” by design. They’re playing up these aspects of their brand to tap into this recent uptick in the popularity of private label goods. By stripping away the brand elements they deem unnecessary, Brandless is able to get their own brand value proposition across to you visually without necessarily having to explain it.

Example packaging by Brandless.

This kind of packaging also helps customers make the connection between Brandless and other popular private label brands like Whole Foods’ 365 and Trader Joe’s. By choosing those brands over companies like General Mills or Unilever, Brandless is reinforcing the idea that their products are healthy and better quality.

Strategic trademarking

Being competitive in a market that is historically difficult to break into means that Brandless not only has to offer things that their customers truly need, they must communicate the value of their company directly and continually build upon the relationship with their customers.

Using their curated product selections as a jumping-off point, Brandless uses specific language to speak to their customers in a way that strengthens the relationship and helps to position their brand as the best possible choice a buyer can make.

Brandless reinforces this value in their products through trademarking. They frequently use trademarked words and phrases to communicate their values to customers. These words help Brandless solidify their brand identity by creating a stronger association between customers and the ideals presented on their website.

The best example of this is BrandTax™, which is used often to help Brandless explain their $3 price point. They state that by eliminating this “tax,” Brandless is able to offer lower prices to their customers. They source their products directly and sell direct-to-consumer without the need for things like distributors and national ad campaign budgets—the source of the so-called BrandTax™—which allows them to pass on savings that competitors can’t.

BrandTax™ free trademark usage example.

According to their website “the average person pays at least 40 percent more for products of comparable quality as ours.” Trademarking this word gives Brandless a way to support their pricing as well as the design of their packaging. From a public relations standpoint, this helps position their products firmly in the private label category even more, differentiating Brandless from national CPG brands.

Another trademarked phrase on the Brandless site is Just What Matters™, which acts as a trademark as well as part of their brand statement. It helps inform the way that Brandless sources their ingredients, packages their products, and ties in directly to their Statement of Quality.

The focus on organic, non-GMO, and Fair Trade ingredients is another way that Brandless is capitalizing on a current market trend. In 2016, organic sales in the U.S. reached almost $47 billion, up 8.4 percent from 2015, which soars above the 0.6 percent growth rate of the overall food market.

Organic Sales and Growth via the Organic Trade Association.

By jumping into a burgeoning market as it continues to grow, Brandless has been able to ride the trend as more and more people switch towards sustainable buying practices.

By strategically trademarking terms related to these trends, they’re positioning themselves as a well-known leader in both the private label and sustainable shopping spaces.

Foster an engaged community

Building a community around a private label brand is pretty much unheard of; typically these items were purchased for their convenience instead of a sense of customer loyalty. Brandless is flipping the conventional wisdom on its head and working to create a very specific image for their brand.

This puts Brandless in a position that is very different from many other eCommerce companies in the grocery and CPG space. Their success over the past three years is, in large part, tied to Brandless’s ability to build a strong community around their product and their ideals.

By positioning themselves as a private label, or “generic,” brand, Brandless is able to play up a lot of the things that make their company unique outside of traditional brand-building ideas. They can easily highlight ingredients: Non-GMO, Gluten-Free, No Artificial Flavors, No Artificial Colors; reinforce their brand promise: No Parabens, No Animal Testing, Cruelty-Free; and use their trademarked words: BrandTax Free™, Just What Matters™.

It’s ironic, sure — they market themselves as being brand-free while simultaneously working to build one of the most potent brands in eCommerce. But it’s effective, and it offers an object lesson in how non-Amazon retailers need to think about their brand and their image in the social media age. 

Brandless owes much of this success to a savvy social media strategy, using almost every platform to engage with their customer base regularly. 

Social media traffic via SimilarWeb.

Brandless knows where their customers are and uses each platform to connect with their customer base in a number of different ways.

  • Facebook: Their hub with over 470,000 followers. This is where customers can talk about Brandless products and their experience with them. Brandless also makes use of live videos to teach customers about cooking, healthy eating, and general product use as well. They also feature members of the Brandless team talking about different products and their thoughts about product packaging and Just What Matters™.
  • YouTube: An extension of the live videos on Facebook. Brandless creates videos to talk about using their products as well as general wellness and well-being. Additionally, they post videos that focus on how their products get made and the Brandless mission.
  • Twitter:  A promotional channel with more than 12,000 followers. Brandless uses their Twitter like many modern brands, focusing on thought leadership, content amplification, and promoting their referral and membership programs.
  • Pinterest: With just over 2,000 followers, Brandless uses Pinterest to focus on educating their customers. There are boards featuring recipes, wellness coaching, and the type of inspirational messaging that performs well on this platform.

Though not featured in the above graph, Brandless also has an exceptionally engaged following on Instagram. They engage with their greater than 215,000 followers using the #BrandlessLife hashtag. These posts can be anything from community outreach and recipes using their products to influencer advocacy, which is one way that Brandless helps to get their message out to the world.

Backlink profile via Ahrefs.

Brandless has been able to amass a significant amount of backlinks and referring content from the healthy living and parenting blogger communities, as well as larger aggregator sites like POPSUGAR and BuzzFeed. This kind of consistent growth helps to strengthen their reputation and legitimize their brand message.

For two weeks in May 2018, Brandless opened their first brick-and-mortar pop-up location. The “store” in Santa Monica, California didn’t actually sell any products. This space was used as a way to connect with their customers in person—a sort of real-world extension of their social media strategy. They offered classes, panel discussions, and free samples for anyone who happened to stop by.

It was an excellent PR and marketing maneuver. Brandless was able to connect with their customers and potential customers in a way that flies in the face of likely preconceived notions about their branding. Building a cult following for a “generic” brand is antithetical—consumers generally don’t go to the local CVS or Walgreens because they’re loyal; they go because it’s easy.

By treating their first physical location as a way to foster loyalty to their brand as opposed to a convenient quick stop to pick up some sundry items, Brandless is inverting the traditional idea of what “generic” brands tend to be.

A company with social consciousness

More and more, people like to support companies whose values align with their own. Brandless makes a considerable effort to make sure that their customers know the products they’re purchasing align with different value propositions. All of their packaging, branding, and marketing is centered around connecting with their customers on certain issues.

This gives Brandless an advantage over other eCommerce companies because their focus has always been to provide inexpensive, quality, and socially conscious items. Other companies will need to adjust their brand narrative to keep up.

It starts when you first make a purchase on Brandless—each time you do, Brandless donates a meal on your behalf to Feeding America. When you pay the $36 a year fee to become a Brandless member, they donate ten, and then an additional two each time you make a purchase.

Alongside their fixed pricing and community outreach, Brandless is focusing a lot of their attention on the health-conscious market space. By offering their customers a wide range of niche products, Brandless is able to reach several smaller markets directly. Their home page features direct search options for a variety of different types of products.

Brandless home page.

Certified Organic, Gluten Free, Non GMO, Vegan, No Added Sugar, Certified Kosher. These options are positioned as one of the first things a customer sees when coming to Brandless.com for the first time. The focus on availability for these smaller buyer groups helps show how Brandless lives their Just What Matters™ mantra.

It also places Brandless as an inexpensive and readily available alternative to Whole Foods or Trader Joe’s.

As an online-only business right now, Brandless is able to offer these types of niche products for people around the United States. This is especially important for people in rural areas, where access to these types of products can be limited or difficult to obtain.

Much like Thrive Market, Brandless was able to access a market that would have typically been difficult for them through product availability and by focusing on certain niche products. This, combined with Brandless’s philanthropic efforts, is one reason they’ve seen consistent growth in website traffic and referring pages.

Referring page growth since launch via Ahrefs.

When a customer buys from Brandless, they can feel like they’re contributing to an ethical business model. For a private label company, this helps to lend a sense of authority to what would otherwise be a blank slate.

Key takeaways

Brandless is riding the growth of private label goods and making a splash as the brand without branding in CPG. Here are a few things you can learn from their success.

► Positioning is important

To be successful in a competitive market like CPG a company needs to find its place. By focusing on specific niche grocery markets, Brandless has been able to capitalize on the rise of private label and make specialized goods more readily available to their customers.

► Trademarking can help build your brand identity

Reinforcing specific messages can help create a language for speaking about your brand. Using BrandTax™ and Just What Matters ™ as anchors for talking about their company, Brandless is able to connect their products with their identity and build on their brand identity in the customer’s mind.

► Customer Engagement builds a loyal community

Building and nurturing a community on social media helps keep customers engaged with your brand. These customers will advocate for your brand and evangelize your message. Tapping into an engaged community gives your company the ability to grow organically.

► Brand is more than a logo

Create a narrative around your products, your company, and your vision. For a company like Brandless, their story is more important than their packaging , and that’s by design. Eliminating the “branding” part of their brand means the focus has to be on the products and how they make their customers feel. In other words, the brand is the customer experience, and the customer experience is the brand.

► Make people feel good about spending their money

When customers buy into a brand’s narrative, they’re doing so because they think the story matters. By offering products that are healthy, ethical, and free of pretense, Brandless is helping their customers feel good about where they are spending their money. This helps strengthen their relationship with customers.

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