5 Success Factors For Private Brand Retailers

Integrated Solutions for Retailers presents these two interesting Private Brand reports the first on office supply giant Staples and the second on a report from Aberdeen titled 5 Critical Success Factors For Private Label Retailers.

Private Label Sourcing At Staples Brand Group

A Case Study Interview with Shawn Auler, Director of Operations and Procurement, Staples Brand Group

  • Learn how Staples Brand Group drives global sourcing for a multi-billion private label business.
  • Learn how Staples Brand Group drives the lowest possible product costs with 99% on-time deliveries across global suppliers and customers.
  • Learn how Staples Brand Group uses Arigo STM Suite to track costs and shipments at lowest levels across their supply chain.

Staples Brand Group (SBG) is responsible for private label products carrying the Staples brand name. SBG’s goal is to deliver iconic products that become distinctly associated with the Staples brand name and that make customers drive past the competition to buy these specific products. The Staples brand strategy is focused on delivering national brand quality with lower prices and better margins. Staples Brand Group is one of the top profit margin business units in the company.

SBG offers a wide range of products from items as simple as pencil leads to complex, engineered products such as ergonomic office chairs. One of the most memorable Staples brand products is the Staples Easy button. Other well known Staples brand products include the MailMate shredder, the One-Touch™ stapler, and the Better™ Binder. Some products, such as notebooks, are fashion items that require different colors for different countries and color changes every year. Staples Brand Group has more than five thousand product combinations offered to customers around the world.

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Case Study: Private Label Sourcing At Staples Brand Group

5 Critical Success Factors For Private Label Retailers

In the present economy, even as retailers are compelled to find ways to improve sourcing operations, re-design supply chain processes, and reduce cost of goods sold, private label retailing is showing signs of continued advancement. Aberdeen data shows that reducing costs (58%) and enhancing sourcing operations (44%) have emerged as the top two strategic focus areas for improving margins in the current economy, according to retailers that are selling private label goods. This research brief outlines the evolution of private label merchandising strategies not only to attain margin gains, but also to enhance the retail supply chain via higher adoption of compliance, trading partner collaboration, and supplier risk management related business capabilities. Aberdeen will also detail some key Best-in- Class private label retail capabilities and enablers to improve overall sourcing, procurement, and supply chain operations.

In the present economic conditions, the retail demand-supply network is undergoing increasing levels of complexity in terms of costs and margin. Our data indicates that retailers selling private label products in their stores and channels are achieving 1.14 times higher year-over-year improvement in gross margin return on inventory investment (GMROII) compared to retailers that sell branded products. GMROII is a key metric in retail that determines the retailer’s income on every dollar spent on inventory. It is also the product of inventory turnover rate and gross margin percent.

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Research Report: 5 Critical Success Factors For Private Label Retailers

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.