Using the Secondary Market as a Strategic Channel for Testing, Learning & Growth
On February 25, 2026, Spoiler Alert hosted a fireside chat between Elizabeth Eberle, SVP of Marketing at Spoiler Alert, and Kevin Ryan, CEO of Malachite Strategy & Research and one of the CPG industry’s most trusted innovation strategists.
The “Value, Velocity & Visibility in Innovation Launches” conversation explored a powerful shift underway in U.S. retail: the rapid rise of discount, closeout, and off-price channels, and what that means for CPG innovation strategy.
What emerged wasn’t just a discussion about excess inventory. It was a reframe.
The secondary market is no longer simply a release valve for at-risk product. It’s becoming a strategic channel for consumer discovery, innovation testing, and long-term growth — ushering in a new era of secondary market innovation.
Below are the key takeaways from the discussion.
From Fringe to Force: The Evolution of Value Retail
Discount and off-price retail is no longer niche. It’s winning trips, dollars, and loyalty across income levels.
Retailers like Grocery Outlet, Ollie’s, TJX, Ross, and Burlington continue to post strong growth. But what’s driving this momentum?
According to Ryan, inflation is certainly part of the story, but it’s not the whole story.
Two broader shifts are at play:
1. The End of the “One-Store” Mindset
Consumers no longer rely on a single centralized retailer. Instead, “circuit shopping” (or visiting multiple stores for different needs) is now the norm.
In his and other industry-wide research it has become clear that consumers regularly dabble in traditional grocery, club, DTC, discount, specialty, and more. Shoppers are mixing and matching.
2. The Disappearance of Stigma
Secondly, discount shopping is no longer viewed as a compromise. In fact, and especially in today’s economy, it signals smart frugality. Even affluent consumers are embracing value channels — not out of necessity, but by choice.
As Ryan noted, the mental shift mirrors the rise of club stores decades ago. What once felt alternative now feels mainstream.
And that mindset shift doesn’t reverse when the economy improves.
The Treasure Hunt Effect: Why Consumers Keep Coming Back
While price may draw shoppers into discount channels, it’s not what keeps them returning.
The real driver? Novelty.
Consumers describe these stores as entertainment. Unlike traditional grocery, which can often feel overwhelming and like a chore, discount retail delivers surprise, discovery, and scarcity.
Ryan highlighted three behavioral hooks:
1. Novelty
Shoppers encounter brands and SKUs they wouldn’t normally see side-by-side in conventional grocery stores when “treasure hunting.” Legacy brands sit right beside premium, natural, and niche offerings.
2. Scarcity & Urgency
If you don’t buy it now, it might not be there tomorrow. That uncertainty fuels impulse and repeat visits.
3. Safe Exploration
Consumers can trial new brands at lower price points much easier through discount retail. An $8 beverage at a premium grocer becomes a $2 trial opportunity at discount.
That trial dynamic is a critical piece of the growth puzzle, and too often overlooked by CPGs evaluating the role of secondary market innovation in their broader growth plans.
Affluent Consumers Are Shopping Discount — and Why That Matters
One of the most important insights from the conversation that emerged was: higher-income shoppers are increasingly frequenting discount and off-price channels.
This doesn’t contradict economic polarization. In fact, it reflects it.
Ryan described today’s “K-shaped economy,” where both economically constrained and affluent consumers shop the same channel, but for different reasons.
Even six-figure households are often living paycheck to paycheck. They may have disposable income, but they still prioritize smart spending.
For them, discount retail serves as a low-risk trial environment. They’ll experiment at $2, and if they love the product, they’re willing to repurchase at full price elsewhere.
That reframes the secondary market from brand risk to brand discovery — a foundational shift in how brands should think about secondary market innovation.
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From Clearance to Innovation Lab
Traditionally, CPGs have viewed discount and secondary channels as:
• A place to move excess inventory
• A liquidation outlet
• A margin recovery mechanism
While those functions remain important, the webinar challenged brands to consider something bigger:
What if discount retail is an innovation testing ground?
CPG companies are under increasing pressure to move faster. Trends spread at TikTok speed. Teams feel urgency and FOMO (aka fear of missing out) to launch quickly.
But speed without learning is expensive.
Ryan proposed that value channels offer a powerful in-store testing environment. Unlike TikTok or traditional research methods, discount retail offers:
• Real consumers
• Real purchasing behavior
• High discovery mindset
• Strong trial receptivity
Instead of only reacting to excess, brands can proactively use the channel to support secondary market innovation — testing new SKUs, limited runs, packaging variations, or emerging trends with real shoppers in a discovery-driven environment.
The opportunity? Move beyond reactive liquidation toward intentional experimentation.
The key missing piece, as discussed, is data integration and partnership. But structurally, the consumer behavior is already there.
Could Brands Develop SKUs Specifically for Discount?
An audience question during the webinar raised a compelling point:
If brands create club-specific and dollar-store-specific SKUs, will they begin designing products intentionally for discount channels?
Ryan’s answer? Yes. And it’s likely.
But unlike dollar stores, where strategy often centers around price-point engineering, discount/off-price innovation may center around discovery.
The most forward-thinking brands may design:
• Trial-forward pack sizes
• Premium or niche innovations primed for exploration
• Limited-time or experimental runs
• Products built for urgency and impulse
The secondary market, and specifically discount retail, rewards curiosity. Brands that lean into that psychology may unlock new growth paths through more structured secondary market innovation strategies.
Five Macro Trends Shaping the CPG Landscape
During the webinar, Ryan also shared highlights from his recent FMI Midwinter keynote, outlining five major forces reshaping food and CPG.
These trends contextualize why alternative channels matter more than ever.
1. The Metabolic Mindshift
Driven by GLP-1 medications, wearables, and metabolic awareness, consumers increasingly believe they can actively manage their metabolism.
This shifts how they evaluate food, beverages, and health products.
2. The Rise of Walled Garden Grocery
Traditional grocery retailers are building ecosystems to keep shoppers inside their environments. By blending physical shelves with digital ordering, private labels, and delivery integration, these big box stores are actively exploring new ways to keep shoppers from “running further away,” to find their next item or purchase.
3. Transparency as Table Stakes
Consumers are relying on third-party apps to evaluate processing, ingredients, and health implications now more than ever before.
4. AI Algorithmic Assistance
It’s not unlikely that AI agents may soon shop on behalf of consumers. Because of this, CPG brands must learn how to optimize not just for shoppers, but for algorithms.
5. Economic Bipolarization of Consumption
And lastly, the K-shaped economy is widening. Brands must serve both value-seeking and premium consumers equally, and often within the same household, today.
Discount channels sit at the intersection of this polarization — making them increasingly important within forward-looking secondary market innovation plans.
What CPGs May Be Misunderstanding
So what can we all learn from this expert analysis of the state of today’s consumers and how brands can learn from value channel retailers?
That the discount shopper is not homogenous.
In reality, the parking lot full of a mix of vehicles, incomes, and motivations tells a much more nuanced story.
Some shoppers seek savings.
Others seek novelty.
Many seek both.
And Ryan’s advice for brands that haven’t visited these stores recently was simple: Go.
Just as club and hard-discount channels evolved dramatically over time, secondary retail is evolving too. And brands that view it solely as an “end-of-life” channel may miss its role in innovation strategy.
The Bottom Line
Discount and off-price retail is not a temporary inflationary response. It represents a structural shift in consumer behavior:
• Shopping as entertainment
• Trial as smart frugality
• Discovery as a loyalty driver
• Innovation moving at social speed
For CPG companies rethinking launch strategies, portfolio agility, and long-term growth models, secondary market innovation may be more than a safety net.
It may be a strategic growth channel hiding in plain sight.
To learn more about how Spoiler Alert helps CPG brands convert excess inventory into revenue while building strategic relationships across the secondary market, visit www.spoileralert.com.
