The Private Brand Movement held in Chicago September 28-29th, provided knowledge and information on private brands, and more specifically the shift of private labels into private brands. Additionally, a focus of many sessions included fundamental strategies for retailers o improve or introduce private brands and ways to manage these brands.Major recurring themes that emerged throughout the event included: consumers’ acceptance of private brands, own brands become more than just national brand equivalents, and private brands are here to stay.
Shift from Private Label to Private Brand
Though the recession helped growth among many private labels, private label growth began before the US recession. As consumers began to purchase private label products, they started to accept them and even became pleasantly surprised with many products. Initially, private label products were retailers’ efforts to offer products that were equivalent to national brands, at a significantly lower price. This started as a short term solution to boost profit. However, as consumers increasingly purchase private label products, retailers have begun to take notice and are stepping up efforts to evolve their private label offerings. Within the past year, several retailers have relaunched their private label products to become true brands. These include Target, Safeway, Duane Reade, Bloom, Walmart and Kmart.
Success in Private Brands
In order to be a successful private brand, retailers need to implement several strategies to engage customers and encourage trial and repeat purchase. Retailers need to manage private brands as brands rather than products, they need to focus on the customer and introduce products to help meet their needs and provide solutions for them. In addition, differentiation and innovation will be keys to successful private brands. Not only will consumers continue to seek value, but unique products that they are not able to find elsewhere. Differentiation will come in a variety of ways including innovative packaging and design and new products.
The Future of Own Brands
Retailers will continue to look for opportunities to expand or introduce private brands in many categories. They will no longer replicate national brands, rather focus on innovation to create original products. The look and feel of packaging must also be compelling. The old generic black and white look of store brands is completely outdated. Upgraded packaging will create visual appeal and will resonate well with shoppers. Retailers have a great advantage in uncovering customers’ needs through their own network of shoppers. They will use insights gleaned from consumers to help develop products and promotions around them. Consumers will seek authentic products, value is no longer compelling enough, they desire experience and authenticity when shopping for products in a crowded marketplace.
This post was provided courtesy of Ali Lipson of Euromonitor.