Tips for Growing Store Brands

Here is Tom Pirovano, Director, Industry Insights, Nielsen tips for helping stores expand their private labels as reported in Brandweek.

• Study the category consumer before going upscale. Consumer understanding is the common thread among top-selling brands. It’s not enough for a retailer to roll out a quality product in premium packaging.

• Disguise your premium store brands. Many consumers still associate private label with cheap knockoffs. There - I said it. But what if they don’t know it’s a store brand? Look to position premium store brands as exclusive products like Choxie at Target and Canopy at Walmart.

• Get your pricing right. The price gap between store brands and national brands varies significantly across categories. The same shopper who chooses private label bottled water for a 3% discount may require at least 20% savings for private label barbecue sauce.

• Offer multiple brands in multiple tiers. Although Costco may be the exception, most retailers are finding growth with multiple store brands. No one brand can stand for value and gourmet and healthy eating.

• Eliminate weak links. One bad product experience can hurt the entire store brand, not to mention the retail banner itself. Product quality needs to be consistent across each store brand. Your brand’s perceived quality is only as good as its weakest SKU.

• Drive trial. If your store brand is really as good as the national brand (or better), let your shoppers try it. Offer a free package with a $50 purchase. Consider a trial size or in-store product demos.

• Promote your store brands. There’s a wide range of feature ad support for private label. Using ECRM’s Marketgate data, we found that private label’s percent of feature ads ranged from 45% at Wegmans to 25% at HEB to only 10% of ads at Publix.

• Don’t be too quick to drive out value brands. Some value brands can drive lower price and higher margins than retailers can achieve through private label. The shampoo category is an excellent example with some well-known brands at very low prices.

• Embrace a cause. Use package labeling to show how your store brand supports local suppliers, promotes health & wellness, saves the environment, or funds local charities. You’ll find that many of these causes attract similar consumers. Regardless of sales performance, taking the high road can help to build a retailer’s image.

• Understand the difference between strong sales vs. strong brand equity. Walmart’s Great Value brand claims to be the #1 food brand across categories, but would shoppers ever choose Great Value over a national brand at the same price point?

What other tips can retailers use to grow their private labels?

Check out his article for a bonus tip!

Value Your Shoppers' Time

A recent post on RetailWire.com discusses how a survey conducted by BuzzBack Market Research found that even though shoppers are shopping for bargains, they want to save time and want the buying process to be easier. Here’s a sample from the post of what consumers are searching for when they shop:

• Fifty-three percent are using the internet more frequently to research products and prices;
• Forty-six percent want to receive price comparisons, product reviews, coupons, promotions and store sales information online or via e-mail;
• Forty-nine percent are switching between retailers, 'shop hopping', to get better value;.
• Twenty-six percent are making more frequent shopping trips to take advantage of promotions;
• Twenty-one percent are shopping at stores with more flexible hours and 17 percent are increasing trips in line with pay day.

What are some examples of companies that offer their consumers product reviews, coupons, promotions, and exceptional customer service? Zappos.com comes to my mind, but what are some others?

Consumers Opt for Quality Time with Loved Ones Over Traditional Gifts This Valentine’s Day

According to the National Retail Federation, we'll see a dip this year in Valentine's Day spending. This isn't too surprising as the economy has weighed heavy on customers.

Traditional gifts, such as candy, flowers and jewelry will see a slight decrease in popularity this year with more consumers preferring gifts of experience and gift cards. Almost half (48.2%) of all consumers plan to celebrate Valentine’s Day with a special night out, compared to 45.3 percent last year, and 12.3 percent will give a gift card, compared to 11.3 percent last year. Greeting cards still remain the most popular choice, though the number of people planning to purchase one is down from last year (56.8% vs. 62.8% last year). Nearly 48.0 percent of consumers will buy candy, 35.9 will buy flowers and 11.8 percent will buy clothing.

How will your company cope with this change in consumer spending?