Why Brandless was doomed from the start
The next big thing seldom is, and so it was with Brandless, a much-hyped direct-to-consumer startup heralded as an innovative disruptor. The company thought its proprietary assortment, direct-to-consumer approach and quirky marketing would resonate with consumers, but the approach was doomed from the start.
What Brandless got wrong, there were actually a few things, was evident in the company’s choice of name which reflected a great misjudging of consumers’ affinity for brands. Consumers love brands and are willing to pay a premium for brands they trust. It is why even in the private brand world retailers long ago stopped merely knocking off national brands and sought to build their own brands with unique value propositions. This trend is in full effect today as many retailers of food and consumables have embraced a brand building philosophy and now derive as much as 30% of their sales from private brands. They also regularly launch innovative new items under brands such as Kirlkland Signature, O Organics or Simple Truth where shopper trust has been established.
Brandless was an anti-brand in the wrong place at the wrong time. Putting aside issues of product quality, the minimalist packaging was reminiscent of a colorized version of the 70’s black and white private lable packaging, or years later when store brands sought to confuse shoppers by copying the design of national brands.
This of course was not the reason the Brandless team cited for its demise.
“While the Brandless team set a new bar for the types of products consumers deserve and at prices they expect, the fiercely competitive direct-to-consumer market has proven unsustainable for our current business model,” the company noted on its web site.
The company went on to thanks its customers and alluded to a possible return.
“We’re hopeful the future holds a new version of Brandless and that we see you again,” the company said.
That would seem unlikely, especially if the Brandless name is retained. Shopper behavior clearly favors brands, even when it comes to store brands.