Here is the final post of a three post series from Dean Crutchfield. He quotes A.G. Lafley, who said “When times are tough, you build share.” According to Dean:
“The time is now for calibrated boldness from retailers with private label as the center stage for growth.”
Increase Market Share: Enabling customers to compete
Three of Three
By Dean Crutchfield
Speed to Market
All successful strategies are destined to fail at some point and retailers need to be adaptable and flexible by building a responsive private label business that’s more adaptive to the changing business environment. Therefore, the business priorities of senior executives are more than likely to change from strategic to more tactical as the economic situation improves.
Therefore, the drive to remove time from the supply chain, and so improve a businesses ability to respond to the new trends, the known sales data and basket analysis, is paramount. This is a top-line profitable sales driver: the more products sold at full price, the less often discounted goods and “trading down” will be prevalent.
For this to be achievable, it can’t be done in isolation, as it counts on understanding a number of interrelated factors: shared values with the customer, the private label portfolio “good-better-best” brand strategy, ROI expectations, retail style, and skill and personnel requirements.
Increasing Market Share
Good-better-best is a tremendously useful framework, but you can’t win by design against brands that have originality and years of heritage: A simple solution to a complex problem is often simple, straightforward — and wrong.
We need to assess what is the future of private label and what the brand opportunity is for U.S. retailers to ramp up their portfolios to levels enjoyed in Europe. Additionally, retailers must understand what the growth and proliferation of private label brands mean for the role of the retailer brand and what the right brand architecture framework is for all retail brands (own and private label brands, contract brands, partner and licensed brands, category and service brands) and how they can work better together.
Profligate amounts of money and resources are spent on either launching, acquiring or maintaining brands. From line and brand extensions through to sub-brands and channel extensions, brand marketers launched a phalanx of 12,000 new products into retail in just a single year. Eighty percent of these eviscerate, all in the attempt to capture market share and build multi-brand strategies to capture the hearts and wallets of customers.
Procter & Gamble’s chairman, A.G. Lafley, would tell you “When times are tough, you build share.” The time is now for calibrated boldness from retailers with private label as the center stage for growth, but it’s best tackled as a brand. This is especially true as the consumer movement from a “we” to “me” culture enables private label brands to help consumers compete (to get what they want).
Dean Crutchfield is a New York-based brand consultant who has worked on major private label programs for Tesco, Staples, Carter’s and most recently the creation of Target’s Up&Up brand.