As households feel the pinch of the rising cost of living, nearly every retailer is starting to see a shift in how their customers are spending.
With shoppers looking for ways to cut back, own brand products, which are typically sold at a lower price point, are seeing a rise in sales.
In the 12 weeks to the 12 June, Kantar reported that sales of own label products rose 2.9%, and leading retailers have said that they expect own brand sales to continue to climb.
Own brand products have a number of benefits for consumers, and against the current backdrop of rising living costs, affordability has leapt to top of the list.
At Kingfisher, our own exclusive brands – or OEBs as we call them – are 15-30% cheaper than branded products. Our OEBs have significantly grown in popularity in recent years, up 19% since 2019 and now account for 45% of Kingfisher Group sales.
But while the affordability argument for buying own brand is clear, there remains a lingering perception that own brand can mean compromising elsewhere – whether that’s on quality or on other considerations such as sustainability.
That might have been true twenty years ago, but today’s reality could not be more different.
It is no longer about sourcing the same products for less, but instead about how we can add value as retailers who know their customers inside out, using that insight to design and develop products that truly suit their needs.
With consumers thinking more about their finances, now is the time for retailers to step up and show what own brands can deliver.
The truth is that most own brand products have gone through an exceptionally rigorous design, testing and development process.
For Kingfisher, the development of any of our OEB product starts with our customers’ home improvement challenge – whether that’s in DIY or trade – and we work back from there. We then find ways to develop and supply the product at scale, so great design is affordable and accessible to everyone.
To give an example, through listening to our customers, we learnt that they need more space efficient, multi-functional areas in their homes, particularly in the kitchen. So, we created the Romesco smart space sink, which has the functionality for a work surface on top of the sink bowl for preparing food or drying dishes when it isn’t in use.
As retailers, we need to make sure we are not just thinking about now but pre-empting what our customers will need in the future.
For example, our team undertake in-depth trend analysis to identify changes around how we live in and improve our homes, so we can design products that make customers’ lives easier for the long term.
The success of any of our OEB products is rooted in our ability to truly understand a customer’s problem and create a product that fixes it, with our award-winning in-house design team dedicated to delivering just that.
“There remains a lingering perception that own brand can mean compromising elsewhere… but today’s reality could not be more different.”
Having an own brand offer means that a retailer has complete control over the process of bringing products to market. Our depth of knowledge and expertise in home improvement means that we have the ability to create products that solve our customer’s challenges, with the reassurance that they are buying from a business that they can trust.
The ‘no compromise’ approach doesn’t just apply to quality. We want to help customers live more sustainably, without a price premium.
Our Erbauer 18V power tools are an excellent example of this. We know that most carbon emissions when manufacturing drills come from the battery and charger, so we’ve developed a product with a battery that can be used in multiple tools thanks to its modular design. In addition, the products’ brushless motors mean they last longer between charges, use less energy and have a longer product life.
Going forward, we’re committed to making sustainable home products affordable and accessible to all.
That’s why, despite the cost-of-living crisis, we’ve increased our sustainable home product target to account for 60% of sales by 2025/26, 70% of which will come from our OEBs.
As retailers, we need to tackle head-on the outdated myth that buying own brand means buying an inferior product.
The innovation and expertise that goes into the development of own branded products is remarkable, and the cost-of-living crisis means it has never been important to show what they can do when it comes to affordability and innovation.
It’s time for retailers to rise to the challenge and prove what own brand is really capable of achieving for consumers.
Henri Solere is chief offer and sourcing officer of Kingfisher
Article originally featured in Retail Gazette