There’s been a ton of coverage of Amazon over the past few months. First, they bought Wholefoods. Then they announced a meal delivery service almost immediately. While all that was going on, a few articles appeared about a company called Brandless. If you haven’t yet heard about it, the company is founded on several important beliefs which you need to understand if you want to compete today.
1. Everything they sell at Brandless is $3.
It’s simple because customers hate complexity. Everything – everything – on their site today is available for $3. There’s nothing to think about. Handsoap? $3. Coffee K-cups? $3. Mustard? $3.
2. Brandless turned lack of grocery distribution from a weakness into a strength.
This is classic disruption. Knowing that it’s next to impossible to get broad product lines into grocery chains, they instead focused on direct distribution. This not only allows them direct access to their customers – they don’t have to trust grocery staffers to help sell the product or protect the experience – they also realized they didn’t have to account for the retailer mark-up. Hence Point 1.
3. Brandless rendered lack of brand awareness meaningless.
By choosing the name Brandless along with a generic look and feel they’ve risen above the marketing fray. They’ve said we can’t compete against hundred year old brands on their terms, so we’ll fight by diminishing the importance of ‘brands.’
This is a coup. Brandless appeals to younger consumers that are less loyal, especially to legacy brands. It makes of its products certified organic, gluten free, non-GMO, vegan, no added sugar and certified kosher to make sure it is all inclusive. To be fair, this is a well executed gimmick, albeit a clever one. Look for a company like Amazon to purchase Brandless in the next 18 months.
OK. So how does this relate to the restaurant business?
Reduce barriers to purchase.
They are starting with products that reduce barriers to consumption. By making products that cut out sugar, GMO and non-vegan ingredients, they’re making it easier to buy them. They built it this way from scratch, intentionally. Today’s younger consumers don’t start with a baseline expectation that things don’t fit their requirements. They demand products that meet their needs. Especially food. Make it hard to meet their dietary needs and they’re not coming back.
Don’t make consumers think about prices.
Second, they made pricing super simple. In the grocery store, people hate the way stores force them to compare prices. Especially since young consumers are more likely to shop at multiple stores to achieve their regular grocery shopping. Pricing in restaurants it’s not much different. They want it to be obvious that the price is fair for what they’re getting. Can you make everything on your menu $3? Probably not. But could you stand to streamline pricing? Definitely. Make it easy to understand.
Control the experience.
How many times will you read that the experience is all-important to consumers? For most brands, one time too few. Brandless controls every part of the experience. Consumers buy and receive products directly from them. This is an advantage over brands that are at the mercy of retailers to present the brand correctly, or next to a competitor that makes them look favorable. People choose everything from taxis, to musicians and now toilet paper based on the experience. What are you doing to improve the one you offer?
Brandless is currently selling CPG space and coming after established brands. It probably has nothing to do with your business if you are in the restaurant space. One thing we have learned from the digital disruption of the past 15 years is that a successful business model is replicated in every other sector. Soon, someone will launch an unbranded restaurant concept that reduces barriers, offers simple pricing and a controlled, positive experience. Today, you have a chance to pre-empt the success of that concept. Tomorrow? Who knows.