Walmart's genius private label strategy literally KILLED name brands... By doing the exact OPPOSITE of what everyone said you should do. In April 2024, they launched Bettergoods - a "cheap" store brand. But instead of targeting broke customers, they went after RICH ones. 28% of U.S. households bought it... in one year. $500 million in sales. 40% came back for more. It's now the fastest-growing private label brand in America. This is the most insane private label play in retail history... The Old Playbook (that everyone follows): - Private labels = cheaper version of name brands - Target price-conscious shoppers - Make it look "good enough" - Compete on cost alone Great Value, Kirkland, Equate - they all did this. And it worked. For the bottom 80% of customers. But Walmart saw something nobody else did. The Problem With Traditional Private Labels: High-income shoppers won't touch them. They associate store brands with "lower quality." Even when the product is IDENTICAL, the perception kills sales. So Walmart asked a different question: "What if we made a private label that high-income people actually WANT?" The Bettergoods Strategy: - Most items under $5 (same as Great Value) - But packaging looks like a $15 boutique product - "Chef-inspired" flavors - Trend-forward ingredients (oat milk ice cream, hot honey seasoning, plant-based everything) - Totally unique products - NOT knock-offs of name brands And here's the genius part: They're selling to TWO completely different customers with the SAME product. Low-income shoppers: "I'm treating myself without breaking the bank" High-income shoppers: "This is premium quality at an amazing price" The numbers prove it worked: High-income households are 20% MORE likely to buy Bettergoods than Great Value. Low-income households are 34% more likely to buy Bettergoods than other premium brands. They captured BOTH ends of the market. With the same $3.44 pint of ice cream. Why This Killed Name Brands: Before Bettergoods, high-income Walmart shoppers bought Ben & Jerry's, Häagen-Dazs, Talenti. Now they buy Bettergoods. Same quality. Half the price. Trendier flavors. The name brands lost their premium positioning overnight. Because Walmart proved you can have: - Affordable prices - Premium ingredients - Unique flavors - Beautiful packaging All at once. The Execution: - 300+ products in Year 1 - Bronze-cut pasta from Italy for $1.97 - Creamy Corn Jalapeño Chowder for under $4 - Plant-based oat milk ice cream that "you won't believe is plant-based" - Hot Honey Seasoning under $3 78% plan to repurchase. 46% say it's better value than other brands. 37% say it's healthier. 34% say higher-quality ingredients. Walmart didn't just launch a product... They repositioned an entire category. What I Learned From This: Stop assuming "premium" means "expensive." Your competitors think they have to choose: - Cheap OR high-quality - Mass market OR exclusive - Accessible OR aspirational Bettergoods proved you can be ALL of it. The framework: 1. Find the assumption everyone makes about your category 2. Do the opposite 3. Package it so both markets see what they want 4. Make the product legitimately good I've seen many companies go cheap to win on price. Or premium to win on quality. Walmart said fuck that and won on BOTH. By making a $3 product feel like $15. And now this isn't just working for Walmart. Target launched Dealworthy (same strategy, different execution). Second-fastest growing private label over the past year. The era of "cheap = low quality" is dead. Smart brands are premiumizing their low-cost offers. Dumb brands are still trying to be the "affordable alternative." What are you?show more

Ricardo

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