Revolutionizing Retail: The Rise of Niche Brands in Supermarkets

Why are niche brands in supermarkets receiving more shelf space?

February 15, 2024 | By HIVERY

Did you happen to listen to Planet Money's "How niche brands got into your local supermarket" by any chance? Listeners are taken on a journey through the evolving landscape of supermarket retailing. Once the realm of large food conglomerates, supermarket shelves are now opening up to small, independent brands like never before. The catalyst behind this shift? A deep dive into shopper behaviors and transaction data.

Evolving Retail Strategies: Riches in the niches

Supermarkets are no longer dominated by big brands with expensive slotting fees. Niche brands like Olipop are gaining popularity by offering unique products that resonate with consumers who seek healthier and more artisanal options. This shift is attributed to supermarkets using sales and loyalty program data to identify what consumers actually want, including the surprising combinations of products they buy together. Interestingly, customers who opt for these healthier, more artisanal brands are willing to spend more. Supermarkets and retailers now recognize the importance of catering to customers with specialized dietary needs such as organic or functional food options, as exemplified by Olipop's offerings. In other words, there are "riches in the niches"

Shifting Shopper Behaviors and the Power of Data

Armed with transaction data from loyalty programs, supermarkets are uncovering valuable insights into consumer preferences. They've realized that understanding the combinations of products shoppers buy together can reveal untapped market opportunities. For instance, the unexpected relationship between low-selling items like papaya baby food and high-ticket purchases such as baby wipes and diapers showcases the indirect influence of niche products on overall spending.

Attracting the Conscious Consumer

Today's consumers are increasingly attracted to products offering organic and functional benefits, a trend that niche brands like Olipop are capitalizing on. By catering to the demand for healthier, less processed options, these brands are attracting a new demographic of shoppers willing to invest in quality.

Adapting to New Consumer Demands

In response to these changing consumer preferences, retailers are shifting their strategies. By waiving slotting fees for certain start-up brands, supermarkets are not only diversifying their product offerings but also appealing to consumers' desires for unique and artisanal products. This strategic move has allowed brands like Olipop to gain valuable shelf space without the traditional financial barriers.

The Strategic Edge of Curate

In this dynamic retail environment, Curate by HIVERY offers a vital tool for brands, both new and established, to navigate the complexities of product assortment and shelf placement. Through simulation and consideration of real-world constraints, Curate enables brands to tailor their strategies to meet the evolving preferences of today's shoppers.

As the retail landscape continues to evolve, embracing data-driven strategies will be crucial for brands looking to stand out. Curate stands ready to assist, providing the insights and flexibility needed to succeed in this new era of supermarket retailing. Whether you're launching a start-up or steering an established brand, the journey through supermarket aisles is one of innovation and adaptation, with Curate guiding the way.

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