Gopuff to Launch Private Label Line
Fast delivery service Gopuff announced yesterday the launch of Basically, the retailer’s first private label product line.
The brand’s first product, a range of bottled waters, is now available for order on the platform, with “essentials” such as cleaning products, batteries and paper products to follow soon. A line of snacks including pretzels, nuts, trail mix, popcorn and snack mixes – dubbed Basically, Amazing – will launch in the next few weeks, with further new products and new private label brands set to continue rolling out over the next 12 months.
By pulling from data collected from shoppers, Gopuff believes that it can predict which products consumers will want and then can create products that will not only easily plug into its micro fulfillment model but also boost company margins.
“We truly understand what our loyal customers look for in everyday essentials – insights that have enabled us to create product lines designed specifically for them,” Daniel Folkman, SVP of Business at Gopuff, said in a press release. “Gopuff has always been about fulfilling the evolving needs of the modern consumer, instantly and seamlessly. Basically, is a byproduct of that, and another example of how we are uniquely positioned to show up for our customers.”
Leading efforts for Basically is Jessica Glendenning, who joined the company last year after spending 15 years at Target and serving as the head of merchandising at Brandless. The company has also added fellow Target and Brandless veteran Sonia Eschenauer as director of private label merchandising and Bri Waldoch as Sr. merchant of private label.
Founded in 2013, Gopuff was one of the first merchants to offer customers’ rapid delivery of grocery products in a 30 minute window. The platform features a limited set of SKUs that are delivered from a network of micro fulfillment centers across 1,000 cities worldwide.
The company says it has taken an analytics-centric approach to private label, examining both purchasing history as well consumer surveys, to determine which SKUs will generate the most sales from its customer base. Rather than staple items, for example, Gopuff is gravitating towards differentiated products, as with the forthcoming launch of “big and bold” roasted nut flavors like Habanero BBQ Almonds and Everything Seasoned Cashews.
While private label items were once viewed as inferior to name brand items, research firm the Hartman Group found in a recent study that consumers now see them as almost as “high quality” as branded products.
“As they learn through experience, consumers are adjusting their perceptions of the taste,
quality, and convenience of private brands in an upward direction,” the report noted. ”Ultimately, retailers offering well-executed private brands initiate a cycle of mutually reinforcing positive perceptions of a store and its brands, bolstering consumer trust.”
Private label offerings typically carry higher margins, likely another draw for Gopuff. The company has previously said it has been able to avoid adding service fees or delivery costs by focusing on this metric.
“Gopuff makes its margin on product category sales. This seemingly simple but crucial differentiator is what powers our unit economics and enables low fees for customers,” a recent blog post by the company noted. “Because these margins are built into the business model, there’s no need to tack on extra fees to earn a profit. And, as the business scales, the economics continue to improve.”
