On Dec. 21, 2020, 7-Eleven Inc. President and CEO Joe DePinto took to Twitter to share with the world that the convenience store retailer reached a milestone: the company hit $1 billion in private brand annual sales.
"We'll continue to innovate our assortment to provide customers with high quality products that also provide an incredible value. Congrats, team @7eleven! #7Eleven #PrivateBrands," the tweet said.
7-Eleven — which operates, franchises and/or licenses more than 71,800 stores in 17 countries, including 12,000 in North America — began its 7-Select private brand line in 2008 with just 87 items. Thirteen years later, the retailer now offers roughly 1,500 in-store items under two private brand lines, 7-Select and 24/7 Life by 7-Eleven.
Driven by the combination of its customers' desires, market trends and products that will most benefit its franchisees, 7-Eleven looks at categories where it feels there is untapped potential to determine which products to add to its private brand roster.
"But every product we consider for 7-Select must pass a high hurdle before we are going to offer it," Amy Werth, senior director of private brands for 7-Eleven, told Convenience Store News. "We must be confident that we have created something that is better than or equal to competing national brands, and we want to be able to offer it at a price that is more affordable."
When it comes to attracting customers to its private brand products, 7-Eleven looks to current shoppers who are open to trying private brands. These are consumers who love finding new brands and products they can recommend to their friends, as well as consumers who want value for their money but also want to stand out from the crowd.
"Our private brand target market, besides being motivated by a great price/value opportunity, are also looking for something unique that enhances their lives," Werth said.
At the end of 2019, the nation's largest convenience store chain launched its second private brand line — 24/7 Life by 7-Eleven — to mark a clear delineation between 7-Eleven's nonfood private brand products and the packaged foods found under the 7-Select brand. Today, 24/7 Life offers 300 products, while 7-Select offers 1,100 SKUs.
24/7 Life — which encompasses electronic accessories, over-the-counter medications, health and beauty aids, cleaning supplies, paper goods, office supplies, wine accessories and travel-size toiletries — helped contribute to a 10 percent year-over-year gain in 7-Eleven's private brand sales in 2020. Part of that was also a result of shopping patterns changed by the COVID-19 pandemic, Werth noted.
"We saw great results from our nonfood private brand items such as cleaning products, paper goods and over-the-counter medicine in 2020. Part of that is a result of shopping patterns changed by COVID-19, with many consumers picking up home essentials at our stores instead of at big-box retailers, or having us deliver to them," she said. "With an expansive assortment of nonfood products that fit the needs of our customers' varying lifestyles, 7-Eleven is meeting a critical need in the convenience shopping market."
The change in consumers' shopping patterns during the pandemic has reiterated the need for brands to offer value to customers. For example, 7-Eleven saw the usual morning rush fall off as many people were not stopping for coffee and a snack before going into the office. On the other hand, afternoons surged as people working from home offices needed to take a break.
"As the COVID-19 vaccine is further distributed and people re-establish their daily routines, we'll attract customers by offering deep value on proprietary food and beverages. We expect promotions on our private brand products will sustain our increased afternoon trips and fill-in grocery needs, and will bring back immediate-consumption customers, especially in the morning daypart," Werth explained.
Looking to the future, hitting the $1-billion mark in sales of its private brands will continue to shape 7-Eleven's long-term merchandising strategy to drive customer loyalty and retention, as well as improve margins for its franchisees.
"7-Eleven is known for finding new and better ways to offer consumers their favorites and for finding new things that become consumer favorites. In a word — innovation," Werth told CSNews. "Our success has been based on a strategy that is now almost 100 years old: find new ways to do things and new things to offer that attract and excite customers.
"Today, as the world's largest convenience store chain, we will be constantly adding new items that customers are looking for, and we will be constantly improving the quality of our core items as expectations change and elevate. Our private brand products are the heart and soul of this strategy," she concluded.
Originally published at Convenience Store News.