If you’re broke and boring, $3 essentials are exciting.
Today, $9 juices and $14 artisanal jars of almond butter are the norm. Millennials want specialized products, and they’re willing to pay dearly. That said, minimalist aesthetics are trending, and back-to-basics lifestyle items shouldn’t break the bank. Enter Brandless; the non-brand brand you never knew you needed.
This startup launched on July 11 with groceries, toiletries and household supplies on sale for $3 or under.
Think of it like a dollar store that actually stocks practical necessities instead of aisle after aisle of dusty Mexican candies. In the place of a hodgepodge assortment of knick knacks, it provides a highly stylized, curated collection of things people actually need. Like flour, granola, soap and salad plates.
In a piece for Medium, Brandless co-founder Tina Sharkey wrote that she and co-founder Ido Leffler believe the modern market is deeply flawed and that prices and production methods make consumers feel disconnected from their purchases.
She writes: “Your values have value and people should not be priced out of them. That’s why it’s time for a different kind of company. One that’s in direct and authentic relationship with its community.”
If that sounds like a bunch of mumbo-jumbo, that’s probably because it is. Sure, capitalism is evil, but Brandless isn’t selling inexpensive goods out of kindness. They’re doing it for the same reason anybody starts a business. To make money. The question is whether or not they can do so with such low prices.
Richard Feinberg, Professor of Consumer Sciences and Retailing at Purdue University, thinks that Brandless’ approach could work if they follow simple economic rules: keep their costs low and their profit margins high. But to do so they’ll have to significantly outsell their competitors. Which might prove difficult.
Feinberg estimated that brands matter to between half and 75 percent of the market. That’s why shelves are full of brands and brands spend millions for advertisements.
“Consumers will spend more for brand names because brand names mean something,” he says. But Feinberg added that about a third of the brands on those shelves don’t have enough brand loyalty to matter and that’s the corner of the market that Brandless is aiming for.
For many young people, brand names aren’t all that important. Feinberg says, “Loyalty is lower for millennials than boomers and other segments.” Bingo.
Avid millennial online shopper Miles wasn’t sold on the idea of Brandless at first. “It doesn’t sound appealing to me, it seems a little gimmicky,” he says. Miles mused that they must be selling kitchen staples in smaller quantities in order to hit that $3 price point.
But after looking at the website, Miles changed his tone. “16 oz. of salsa for three bucks? Actually that’s a pretty good deal. I’m into that.”