In 1986, the New York Times ran an article titled No-Frills, No Sales. It tracked the rise and fall of generics — those simply-packaged products devoid of flashy branding sold at a discount. The concept was simple: consumers would enjoy the same quality product without paying extra for the costs of packaging, marketing, and advertising.
It was a good idea, but sales began to plummet for one very important reason: consumers ultimately doubted the quality of the generic products. Competing brands launched price-cutting promotions to mitigate the impact of generic pricing, and consumers returned to the brand names they had grown to know and trust.
By selling its products online in no-frills packaging, Brandless claims to save consumers up to 40% by eliminating hidden costs associated with marketing, branding, and advertising for a national brand.
The Brandless mission is a good idea in theory, but as we saw in the ‘80s, it’s quite difficult to convince consumers to switch their brand preferences to save a few cents. And to make matters more complicated, the company’s target consumers aren’t coupon-cutters looking for bargains.
Instead, Brandless aims to compete with the likes of Whole Foods by selling products that check off boxes for health-conscious consumers: foods with organic ingredients, no artificial preservatives, and are free of genetically modified organisms. As such, Brandless products are typically more expensive than mass merchandisers and only save you money if you compare them to higher-end brands.
If coupon-cutters won’t be convinced en masse to switch brands to save money, odds are that consumers on the other end of the spectrum won’t either.
The reason is simple: brands serve as shortcuts for the brain that help us make good decisions.
That’s hardly surprising given the way our minds work. At our core, we’re little more than pattern-recognition machines. We learn what things we do or don’t like — what habits are good or bad for us — and then turn those into actionable steps.
Look at how little thought is required to get ready in the morning. Walking to the bathroom, flipping the lightswitch, turning on the faucet — your morning routine is the result of hundreds of automatic tiny patterns that you’ve memorized to ensure you look presentable and get to work on time.
Brands work the same way. Our brains have made connections between certain products, how we feel about them, and what role they play in our lives. We’ve learned through repetition that Tesla represents sexy electric cars, and Volvo represents safety — not the other way around.
When it comes time to purchase, all we need is a visual reminder or a jingle for us to remember whether we like a product or not. That kind of shortcut makes it easier for us to make quick decisions.
Need a toothpaste refill? Need more milk? Chances are, you know exactly which one to grab next time you’re at the store, whether that’s a conscious choice or an unconscious one. You’ve learned which brands represent the qualities you care about — price, flavor, environmental impact — freeing your brain to think about other things as you stock up at the store.
Brandless faces an enormous hurdle as it aims to overcome these deep-rooted associations. Namely, people need to buy into the Brandless brand for it to succeed. Shoppers need to believe its products are of a high enough quality that they feel they’re getting a good deal. Otherwise it is bound to run into the same problems of quality assurance that generics have suffered in years past.
That hurdle is made even more challenging by Brandless’ own branding, or lack thereof.
Typically, no-name products are a brain shortcut for bargains. Consumers generally understand that a lack of branding indicates a lower quality and/or a lower cost.
Therefore, Brandless must convince shoppers that, despite no-frills packaging, its products are actually on par with the most trusted brands that we have come to know and love. And they need to make that argument so compelling that consumers are willing to ditch powerful brand associations they have built and maintained their whole lives.
That’s a hard pill for buyers to swallow, especially when the promise comes from a new and unproven company.
The Brandless name plays into that cognitive dissonance. By essentially calling for a fight against traditional branding, the company puts itself in an awkward position by asking customers to trust its own brand in the process. It’s the kind of eyebrow-raising hypocrisy that may make it difficult for consumers to forge a meaningful and positive brand association.
On the other hand, Brandless is tapping into some rather compelling trends, whether by accident or on purpose.
Its online-first platform is indicative of our current convenience-driven era of shopping, and its mission statement seems tailor-made to connect with a value-driven millennial demographic. Add to that Brandless’ partnership with Feeding America (where they donate a meal for every Brandless order) and you have yourself a pretty convincing option for busy, health-conscious consumers who want to feel like they’re making a difference.