Earlier this week, Walmart announced a rollout of its own private-label brand, Uniquely J, through its online acquisition of Jet.com, part of its continuing effort to keep pace with online giant Amazon.
The online and in-store grocery wars heated up a few months ago when Amazon acquired organic food chain Whole Foods, giving Amazon customers improved access to the company's private label 365.
The Jet brand will be targeted at young urban adults.
Currently, Walmart sells its own brands such as Equate, Great Value and Sam's Choice on Jet.com. And Uniquely J will be sold exclusively on Jet.com at first, and later be available on Walmart.com and in Walmart stores.
Walmart applied for a trademark on the names of thousands of products back in April.
At the outset, items for sale will include paper goods, olive oil, coffee and laundry detergent. Walmart hopes that the lower prices will steal away some of Amazon's grocery customers. Getting in the private-label game is becoming increasingly important to grocery retailers in 2017.
"First of all, we believe that private brands, when done well, aren’t just an add-on, me too, value option anymore, or even just a way to drive margin expansion," Jeff Gamsey, vice president of private label at online marketplace Boxed, told FierceRetail. "They can actually become a fundamental, defining piece of the entire retail experience. They can create leverage used to hold brands accountable, fill assortment gaps, and spark innovation that challenges existing industry standards, and deliver higher-quality products and healthier, cleaner ingredient decks without sacrificing flavor.
Boxed recognized the potential of private brands early on when building its business and has worked tirelessly to strengthen its brand Prince & Spring. But does the announcement of Jet.com getting in the game threaten Boxed?
"Every retailer worth its salt has its own private brand, so it’s not surprising to hear about the impending launch of Jet’s," Gamsey said. "I think their strategy is a good one—the days of open price point, low-quality generic products are outdated. Customers, particularly the younger demographics that shop on Boxed and Jet, don’t just expect quality, value, transparency and authenticity; those are the table stakes. Ultimately, private brands succeed or fail based on the ability of the team to execute and do the behind-the-scenes work to ensure that the quality promised is delivered consistently."
Still, Gamsey is sure that Prince & Spring will withstand the competition, as it focuses on quality and design for each product, letting its value speak for itself.
"We believe that the product’s packaging is a canvas and that the level of artistry you see on the packaging should not just be engaging and playful, it should reflect the care that goes into developing the highest-quality products inside the packaging," he added.
In the two years since Boxed launched, the company has achieved a double-digit percentage of sales with Price & Spring, launching just over 65 private brand items (out of a total assortment of 1500 total SKUs).
In comparison, it took Costco’s private label Kirkland Signature 25 years to become what it is today and get to 25% of the club chain’s revenue, according to Gamsey.
"We’re on our way to doing that in a fraction of the time, and we plan to continue to step on the gas pedal to infuse as much personality into the brand as possible, and use design to blur the line between private label, private brand and national brand."