I buy my share of Kirkland Signature products from Costco. And the odd piece of Amazon Essentials clothing. Also store brands from other retailers I trust.
The quality is usually solid. The prices are great. And with liberal return policies, my risk is close to zero.
But as someone who works with innovative product makers, this trend hangs over me.
You spend years developing something unique.
You build the market.
Create demand.
Educate consumers.
Then BOOMZIES. A retail giant launches its version at a lower price.
It’s even happened with Stanley’s viral success. Costco popped up a $35 version of the $45 Stanley Quencher. Whether it’s as good hardly matters — the price and return policy make it a low-risk trial for consumers.
Plus, it’s JUST a big ol’ cup. (Don’t bother trying to tell the kids.)
This isn’t new. Store brands have existed as long as there has been stores. But today’s house brands are different:
- They move incredibly fast
- Quality is often excellent
- They leverage massive data
- They control the shelf space
So how the heck do innovative brands compete?
Some strategies I’ve seen work:
- Own unique technology
- Write strong patents (including design patents when possible)
- Create emotional connections
- Focus on brand experience and customer support
- Stay ahead with innovation
- Target premium segments
Know what doesn’t work? Competing on price.
If that was all Stanley had, they’d be doomed. Same with Yeti, Nike or any other great brand.
I talk a lot about how the dog brain connects with emotional benefits while the tank brain focuses on practical value.
House brands win the practical battle. You need to win the emotional one.
Action for today: Look at your product through a retailer’s eyes. How easily could they create a “house” version? What parts of the ownership experience would be hardest to duplicate? No matter what you do or make, it’s important to know what value you deliver that no one else can.
Shining light on your vulnerabilities helps you focus on your strengths.
Laurier
Fun fact: Kirkland Signature is named after Costco’s former headquarters location in Kirkland, Washington. The brand now generates over $62 billion in annual sales — more than Coca-Cola or Nike!