Don’t count ever count Walmart out, even as Amazon rocks the retail world with its purchase of Whole Foods.
On the first day of the Velocity ‘My Private Brand’ conference in Charlotte Thursday, Walmart SVP of Private brands, Jack Pestello, said the giant retailer is serious about taking its private brand where no retailer has gone before.
With 140 million customer vistis per week, Walmart has built the world’s largest private label- the ‘Great Value’ brand. The store’s vision is for its private label is to be the most trusted brand in America – even over known and traditional brand giants such as Kraft or Kellog’s.
Pestello noted that the millennial generation will help push private brands into new and uncharted territories. “Many people moved to private brands during the recession,” said Pastello. “But that behavior change has stayed on. People have money, but now they have chosen to spend differently. Millennials are the least brand loyal. They are looking for value and are more accepting of an off brand.”
At Walmart, there has been a 2% growth in past years in the number of store visits that include the purchase of a private label product. “Private labels are creating brand loyalists. That changes the conversation.”
Walmart has found through research that millennials demand more than product quality. Quality is a ticket to the game, Pastello said. “We have found that for this generation, ‘quality’ must include transparency, clean products, innovation and sustainability.” Millennials care where products come from, what’s in them, whether they were bought or made using fair trade practice, if workers are treated well and the whether raw material use is sustainable.
In response, Walmart has developed its culinary innovation center where a certain number of Great Value products are analyzed, questioned, torn apart and remade from the ground up in order to increase quality, and meet the new standards. Whether food, or trash bags, no product is ignored if it bears the Great Value brand stamp.
Pastello said private brands should no longer aspire or settle to be lower cost and quality copycats. “Private brand can lead the way to innovation and not wait to knock off the established brand.”
In other words, private labels are rapidly learning to act like ‘real’ brands.