The Branding Effect in Grocery

Mar 31, 2021

Look down at your wrist. Go on, humor me. What is there?

If the answer is nothing—no traditional wrist watch, no smart watch, no fitness band—I'm guessing you made the practical decision that a watch just isn't necessary. Who needs a watch when you have a phone? And your phone counts steps, so who needs a Fitbit?

But wait, a large and growing portion of Americans do have something on their wrists, and the majority of them tell time. In fact, the wristwatch industry is on fire, growing faster than CPG, bottled soft drinks, alcohol, and grocery retailers (COVID inflation subtracted). More people—not less—are wearing a time-keeping device of some kind on their wrists now than ever before. And not just fancy smart watches but mechanical, digital, performance, value are all growing and projected to grow through the end of the decade. And the fastest-growing segment is luxury wristwatches.

Does that surprise you? Why would this be? (And what does it have to do with the grocery industry?)

As usual, what shoppers want is often not what you think. It turns out that after two decades of casual dress being the norm in the workplace, and massive acceleration of cost in other luxury goods, consumers are using a wristwatch to make a statement about style, fashion, personality, or interests in way they used to do with designer jeans, expensive jewelry, or even the brand of car they drive.

Wearing a fancy dive watch says a lot about your self-image as an athletic person; wearing a simple paired down design says you are a person that appreciates simplicity in your life. Wearing a fancy gold watch with your jeans and hoody says you have made it, but don’t have to flaunt it. And wearing an Omega watch on a cool strap means you would prefer to be a British secret agent.

Which leads me to talk about branding. How crazy is it that names like Rolex, Omega, Hamilton, Timex still mean something to consumers when the actual function of the devices are superfluous (as long as you have battery power to your phone)?

Brands are powerful things. They can drive shopper behavior more than temporary sales events, coupons, and loyalty programs could ever dream. Brands do what promotions can’t—they generate sustained shopper engagement and long-term loyalty.

Our CPG partners invented the science of modern branding. Companies like Coca-Cola and Procter & Gamble invested in analytics and shopper insights to hone their marketing skills and it paid off. Today they are some of the largest marketing companies in the world.

Retailers, too, are brand marketers, though we often don’t behave like it. So much of our advertising dollars go to sales and discounts that it is sometimes hard to remember what we do to drive the brand over time, versus what we do to generate foot traffic this weekend.

And of course, promotions work so well they become a trap—you have to spend so much energy topping the last event, and beating last year, that you de-prioritize branding—sometimes forget it all together.

And yet branding matters. What is the difference between the three products below?


Well, it isn’t warranty, it isn’t dive depth or accuracy. It isn’t the type of metal or the brightness of the night illumination. It’s price. About $33,000. And it is all about the brand. That Omega costs three times more than the Hamilton does; the Rolex costs 18 times more. And they don’t even tell you the date!

So how do we as grocers learn branding tricks that other companies use? How can we adopt branding to our local stores and get margin increases like this? How can you turn your store, your bakery, your meat department into the equivalent of an Omega or a Rolex?

It turns out that the techniques of modern branding are easy to learn and not expensive to do. Any retailer can learn how to use branding to drive long-term customer adoption and loyalty. And in reality, many of you do them today but just don’t recognize you are doing it.

But learning the techniques of brand management can help any retailer, from single store to regional chain. And I will help you. Personally.

I’ve developed small brands, large brands, premium brands and value brands throughout my career, some of those brands are probably in your home today (own a Hampton Bay fan or a Ryobi power tool?). The techniques we used to identify the shopper needs and organize our products to serve those needs are part of my class on branding, which kicks off on Tuesday, April 13 through the IGA Coca-Cola Institute. It is an online course, delivered in two sessions, specifically engineered to help retailers or companies that serve grocery retail learn simple tools you can use today—right now—to improve your brand.

I will teach you how to identify brand strengths and maximize them. I will also show you how to learn your brand’s weaknesses and navigate around them. And even more fun, I will teach you how to exploit the weaknesses of your competitors’ brands to drive shoppers away from them and into your stores.

As part of the IGA Coca-Cola Institute Supermarket Management class, you will be able to (virtually) sit alongside your peers from all over the world, who are trying to solve the same problems in their markets that you fight in yours. And coming out of the class, you should have not only some new techniques to use, but also—hopefully—a long term appreciation for what it takes to manage you brand.

Please join me online in class on Tuesday, April 13 and April 20. I think you will really enjoy the class.

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