4 Questions for Tony Stallone at Peapod

EXCLUSIVE TO PRIVATE LABEL RETAILER

What is the role of Private Brands at Peapod?

Private Brands are a growing trend for us, we are seeing  strong increases year over year, as customers are becoming more dependent on them.

This  speaks to the quality and improvement in Private Label brands and also some of the innovation that has been coming along in the field.

Peapod’s Private Label brands are broken out into two categories Natural/Organic and Traditional. With the on-line customer it is a huge competitive advantage for us in having a strong Own Brand in Natural/Organic  that people can trust, that is competitive in the marketplace, and that reduces the cost  to feed your family healthily and better.

We use the term “free from” in these lines to highlights all the things that they are free from.   The strategy around our Private Brands is that they have an everyday lower price.

Nature’s Promise is our Natural/Organic Private Label brand. It is the number one Private Label of any natural product in the marketplace, in terms of quality, customer acceptance and penetration with the on-line customer.

In our customer focus groups many of them were surprised to hear that Nature’s Promise is a Private Label brand.  It is such a strong Private Label brand it looked like a national brand to them.

 

What grocery categories work best for private label products at Peapod?

Natural /Organic is the top category as more and more people want to eat healthier. Nature’s Promise in Natural /Organic has a reduced  price comparable to other brands in that category which makes it easier for the mom to feed her family a better more healthy option at a lower price.

Our private label products are driven by Ahold with input from all divisions and all parts of the company. As e-commerce is growing,  we have a larger voice on what products are developed.  We index over 3x on Nature’s Promise than a typical Brick & Mortar store.

There is a different expectation set among the on-line customer vs. the Brick & Mortar  shopper.

The typical Peapod customer is the Millennial mom . We are seeing  that our demographic base continues to get younger.  She is comfortable with tech, she uses it to organize her household needs and has concerns about feeding her family healthy foods. The Millennial  moms are also early in the work force and have less disposable income so value is important to them.  That is why Private Label especially in the Natural /Organic space plays a big role for them.

Convenience is also huge. We use technology in every facet of our lives to save us time and make things easier for us.  Peapod is an extension of that tech enabler.

 

What is the future of Private Label for Peapod?

We see Private Label evolving.  In the past, Private Label was a way to produce a product this is as good or better than a national brand but at a lower price.

We now see that the customer is seeking solutions.  We’re seeing  Private Label as a way  to address needs vs competitive advantage.  We see Private Label as a way to turn needs into experiences.  With Peapod’s Private Label, we’re looking to provide more solutions for the Millennial Mon.

Our customers, the on-line market, will index much  higher in Natural /Organic as well as Specialty and Ethnic.

People don’t buy products anymore – they buy experiences & solutions.  Food has always been entertainment and people like to explore. I saw this happening 20 years ago. Look at the proliferation of the Food Network and the popular cooking shows.  You see websites like Tasty.com.  Customers are constantly being exposed to a variety of different ethnic types of products   Our tech enabled customers want to bring them home and try them themselves.

 

How does Peapod use the on line experience to your advantage?

On line customers have the time and leisure to look at a product and pull up the details to investigate every value that is important to them. Also a big advantage on-line is the ability to filter product selection by key attributes for example fat, salt , protein etc.

We offer those tools on-line with our Nutrition Filter. The customer can curate their shopping experience based on their needs (low cal, vegetarian, vegan, etc.) and what they are looking for.  It is a huge advantage and customers get hooked on it.

It is something that they can’t do in a grocery store without walking down all the aisles and looking closely at all the labels and sort them in their head, which is virtually impossible. It is simple to do it digitally. For example our customers can looks at all the breads and say “Show me the ones with the less carbs”.

People also want cleaner more understandable ingredients.  They can easily  look up this information on-line.

The digital world allows customers to make choices that are right for them.  They are able to sort product by the way they want to see them .  They can curate their personal shopping experience.  For example, if organic is important – they can virtually  create their own personal organic store.

Peapod gives the customer the flexibility to address their specific product demands and then fulfill those demands to the customer seamlessly.

Both Peapod and the customer benefit from the data that they share with us as they shop.  This data tells us where we should be in investing our dollars to develop new private label products that fit their needs.  It is all about solutions especially around the meal.  When you break out products by solutions you see double digit growth in all those categories. That tells us that the customers want more solutions.

When we meet internally with the Own Brand teams they ask us about meal solutions, what are we doing to make our customers lives easier regarding meals.

The data  we get from our customer gives us rich insight. For example Fail Finds, where a customer looks but does not find an item, provides us with insight on areas where we can better serve our customers.  You can’t get this from a customer walking the aisles.  Data is driving the world these days. The more knowledge you have the more successful you will be. E-commence is data driven.

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