Commerce is undergoing an unprecedented disruption. The tried-and-true tactics that enabled companies to become the largest brands and retailers in the world are no longer working.
The incumbent “big players” are failing to create new billion-dollar brands as frequently as they once did. At the same time wholesale retailers are struggling to sell other people’s stuff and make a profit. Digital native brands are being born every day and creating a lot of buzz, but rarely achieving significant scale. Yet, consumer spending is at an all time high. So who is winning?
It may surprise you to learn that it is brick and mortar retailers, launching their “own brand” products. Take Target for example, who have launched 11 brands in the past two years, each doing at least $1 billion in business, with Good & Gather already reaching the $2 billion mark.
Similar to Target, Kroger launched its own line of organic products called Simple Truth, and when Kroger began its international expansion, it didn’t even try to open American-style grocery stores in other markets, instead they used their unique brands like Simple Truth as products in general retailers. So today, Chinese consumers can buy Kroger Simple Truth on TMall.
Returning to Target, Mark Tritton former Chief Merchant at the retailer knows a thing or two about developing successful retailer owned brands. He’s now the CEO at Bed Bath & Beyond and recently launched its own exclusive brands. Better still, Bed Bath & Beyond has now agreed to sell its owned brand products through other retailers, such as Kroger.