Do the labels on your groceries matter to you?
Or do you brush aside brand loyalty and grab whichever option is cheapest?
A new company is trying to meet you in the middle with a fixed-price selection of groceries, household and personal items in its online store, where everything costs $3.
Brandless, which launched last week, is trying to remove the “BrandTax” from the stuff you buy on a regular basis. All its products have minimalistic labels that explain only the product and nothing about Brandless itself.
Ignore that “BrandTax” is suddenly a compound, trademarked buzzword here. It is actually a real thing.
Brandless identifies it as “the hidden costs that come with buying a national brand.” A lot of the hidden costs come not from the quality of the product, but instead from the way the product is marketed to customers.
Big brands spend big money to get their products in front of customers, whether through ad campaigns, partnering with rebate apps, paying for prime shelf space at grocery stores or all of the above.
So instead of fighting to get its products on your grocery store shelves, Brandless is going directly to consumers by selling online. It’s disrupting something, right?
Not this time. Not yet.
Grocery Shopping Is More Complex Than Ever
Online shopping and its myriad algorithms have had a major hand in upending the game where companies with big budgets get the most airtime. Seemingly endless options lead most shoppers to choose many items based on price alone, rather than their attachment to a certain brand. The glut of options online and savvier shoppers at grocery stores mean the only thing left to compete on is price.
“Brandless is about limiting the choice,” co-founder Tina Sharkey told Marketplace. “It’s about curating the just what matters. It’s overwhelming to use a web service with a database of millions and millions of products to figure out the ones you want, how to shop, how to identify the values.”
Brandless is up to 115 products so far, with categories for food, personal care and beauty items, and even office supplies and basic kitchenware.
Everything Brandless offers looks nice, but what market gap is it really trying to fill?
The company isn’t even claiming that it’ll save you tons of money. It’s about getting quality without high prices. But that just-right Goldilocks combo does come with a catch. Orders don’t get free shipping until you’ve spent $72. Brandless B.More members who pay $36 per year only have to spend $48 to get free shipping.
Brandless will grow, but with current offerings of just more than 100 products, there’s no compelling reason to go online, choose $50 or more worth of home goods, and wait patiently for them to arrive.
Is Store-Brand Stigma Over?
Shoppers have already found ways to deal with the paradox of choice, a phrase coined by Barry Schwartz, who argues, “With so many options to choose from, people find it very difficult to choose at all.”
Now, some store-brand products have cult followings (we see you, Trader Joe’s everything). Some entire chains, like Aldi, have built a whole business model on shoppers caring more about price tags than looks.
At warehouse clubs, part of the appeal is access to a lot of private-label goods. On Amazon, the company’s own lines are some of the fastest selling.
And grocers are relying so much on their private-label brands being moneymakers, they’re suing each other over naming rights.
People are done caring about what’s fancy. They have abandoned some of the need to keep up appearances. They’ve moved on to cheap and easy.
So the barbecue sauce you could snag from Brandless for $3 might cost less at your local grocery store. Same for the cotton balls, the dish soap and the bag of pasta. Brandless makes it easy to shop by values — organic, gluten-free, kosher, non-GMO — but elevated house brands have cropped up in traditional grocers too.
“Everything’s $3” is a nice calling card, but it may not be enough during these grocery wars.
Lisa Rowan is a writer and producer at The Penny Hoarder.
This was originally published on The Penny Hoarder, one of the largest personal finance websites. We help millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. In 2016, Inc. 500 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S.
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