E-commerce grocery site Brandless launched in July, offering better-for-you product selection and an easy-on-the-wallet $3 price point. All the food is non-GMO, much of the selection is organic, and over 400 potentially harmful ingredients have been eliminated from its beauty offerings.
Here, chief merchant Rachael Vegas sheds light on the site’s strategy to provide healthier food to the masses at a lower price.
How did you decide on $3 as the price point?
Rachael Vegas: Grocery shopping is a chore because it is overcomplicated by an immense amount of choice. We scaled down our assortment because you don't need 50 ketchups to choose from; you need one really good organic ketchup. Along these same lines, we didn’t want all different pricing—for example, having to navigate the difference between products with pricing ending in a nine versus something else. We wanted that to be straightforward, too.
What was the inspiration behind Brandless?
RV: A lot of retailers do private label, lots do better-for-you and some do ecommerce. But no one was doing all three exclusively. So there was this white space where we could meet an unmet consumer need. Seventy-seven percent of millennials don't want to buy the brands their parents buy, and 88 percent are interested in buying private label. Plus, the time was right. Coming out of the Occupy movement, and with all the changes happening in this country, the people deserve better. We want to provide people with better quality products and make it accessible to everyone.
How do you keep your prices low and your quality high?
RV: We coined a term called “brand tax” and we consider that to be, in its simplest form, the premium you pay for branded versus unbranded products. What drives this brand tax? It’s the complexity of the supply chain.
What makes organic products so expensive is, first, supply and demand, but more importantly, the people making it have to create a brand, market that brand, identify a distributor to get that brand into stores, find a broker to get it in front of the merchants, and then in the store you have labor and inventory costs. All that adds up. There's a lot of complexity in the supply chain that we've eliminated. We go right from our manufacturer to our consumer.
How are your products different than other store brands?
RV: In some cases, like with a single-ingredient item, organic black beans are organic black beans. Nothing is unique there. But if you look at our snacking, beauty or cleaning assortment, it's a lot more innovative. We’ve created unique items in partnership with our vendors. It's not necessarily something you'd find in every store.
Great product is king. So taste, efficacy, function—that is going to be of utmost importance. But there doesn't have to be a trade-off on what's important to you and what you can afford. With Brandless, you can have what you think is most important for your body and home, and get a great value when you're buying that, and feel good about it. Part of that feeling good is that, with every order, we give a meal to Feeding America.