WEST DES MOINES, Iowa -- This past fall, Yesway added candy and baked goods to its stable of private-label products. It was the next step in a private-label program that we intend to take beyond a low-price strategy. In fact, we believe there are several product categories we can own with a three-tier strategy: value, national-brand equivalents and premium.
It began with the launch of Yesway-branded bottled water in mid-2018. As the private-label product segment consumers are most comfortable with, it made sense as a starting point. Within one month, Yesway bottled water was the best-selling water in our chain. As our customers build a comfort level with Yesway brands, we have the opportunity to add a second and third tier. For bottled water, this includes Yesway Water Plus, a smartwater-like product, which aims to fulfill our brand promise to provide a terrific shopping experience.
That experience means having the right product at the right price, and that is why we offer a range of products for different customers and need states. For the price-conscious customer, we have national brand-quality products at value-driven prices.
Customers looking for a more elevated product and wanting to indulge more will find that our premium products fulfill that need. Also, having premium products balances our offer and helps us capitalize on all merchandising opportunities in the store, from impulse buys at the strike zone to destination trips for food and dispensed beverages. Consumer data shows that customers are very much willing to try and trade up into different product tiers for categories such as salty snacks, meat snacks, chocolate and nuts.
We see our private label as an opportunity to further connect the Yesway brand to our customers. We take inspiration from Starbucks’ ability to create a tribe of loyal customers who will only buy Starbucks coffee. We want our customers to feel that same connection to our brand. This loyalty has to be earned in the eyes of our customers.
There have been challenges. For example, we underestimated the customer response to our packaged bakery in certain markets. Due to supplier shipping constraints, we did not have enough product to meet demand. There is nothing worse than having a marketing campaign in full swing and no product on store shelves. Since then we have taken corrective measures and have worked with our suppliers and distributors to ensure adequate supply.
Private label is an opportunity to connect the Yesway brand to our customers.
Working with the various suppliers was another big challenge. Some are strong in terms of project management and communication. Others are not. This variability needs to be factored into the project timeline. Any retailer getting into private label should build in more time than they think they’ll need.
Thankfully, the project and individual products were in store on time and the customer response has been strong.
In 2019, we will layer in new categories and premium offers that align with seasonal trends. We also see opportunity to innovate with bold and spicy flavors for premium meat snacks, healthier non-GMO-type options, and nuts and trail mixes.
Our loyalty program will be the engine that drives our private label. In January, we rolled out item-level fuel rewards that allow customers to earn and then stack fuel rewards when they purchase Yesway products. We also have member pricing, double points and clubs for our loyalty members on all Yesway products.
It is an exciting time for us and even more so for our customers coming into their local Yesway store. Consumers who are comfortable buying our private-label products are our best customers. They come in often, and they’ll tell others about it. That’s what we want to grow the Yesway brand.
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Darrin Samaha is Yesway’s vice president and brand manager. Yesway is based in West Des Moines, Iowa, and operates 150 convenience stores. Reach Samaha at [email protected].