Kroger Uses Cause Marketing with a House Brand

For several years now I’ve been agitating for cause marketing for retailer’s house brands. Now I’ve finally seen one from Kroger benefiting breast cancer research.

Here’s my argument; in recessions house brands do very well. But once the hard times are over, consumers return to the name brands.

But if a cause marketing effort could help a retailer preserve even 5 percent of the customers that switched during the recession, it could potential be worth tens of millions to the bottom line every year.

I originally made my case for house brand cause marketing back in a post on November 18, 2008.
In the declining economy, people in the UK, the US and elsewhere are buying more ‘house brands.’

Of course they are, you say. What could make more sense than to get the same-quality or nearly the same quality for a meaningful savings?

I don’t have a handy chart to demonstrate, but this is what always happens in bad economic times. When the economy dips, sales of cheaper house brands and generics take off. And when the economy recovers consumers go back to the major brands.

For the foreseeable future, price is going to be major driver for the consumer.

Imagine this scenario: a shopper faces two cans of cream of mushroom soup, the store brand and the dominant brand in the US, Campbell's. The store brand has respectable quality and is 26 percent cheaper per ounce.

In a face off like that, Campbell’s market share would erode very seriously sans their incredible market shelf space and decades-old Labels for Education program, in my view.

Now if the store brand started a well thought-of cause marketing campaign of its own, all bets are off.

However, I’ve never seen a store brand in the States undertake transactional cause marketing, even though their margins for house brands are generally better than what they make selling the national brands.

I encourage the big national retailers to try cause marketing with their house brands. Because now, in the sour economy, is the perfect time for the bold stroke. Of course, you’d want to test the concept, the approach and the cause with a limited number of markets and a select group of products.

Get that cause marketing campaign right, and when the economy improves, not all consumers will go back to the national brands.

I’d bet on it.
I bought this case of water in early November 2010. It was prominently stacked near the front door. The case packaging has two breast cancer survivor stories from two different Kroger employees on either side panel. The packaging on the bottles themselves make no mention of the campaign, nor do the end panels of the case.

This campaign from Kroger strikes me as a toe in the water. But it’s super low risk. Because it’s a pink ribbon effort, Kroger doesn’t have to build a relationship (or pay sponsorship fees) to any breast cancer charity. They can just count on the natural affinity built into the pink ribbon and, when everything is said and done, write a check.

Because the packaging on water cases is so big, it enables long-form stories that also serve to honor the courage of Kroger employees. You couldn’t do the same on a can of soup.

My friends, this is another wonderfully ‘stealable’ idea.

Labels: , , ,