Private Brands: What’s Different, What’s the Same, What’s Next?

Christopher Durham Aug 30, 2010 3

This is the first in a series of three guest posts from Rob Wallace the Managing Partner, Strategy at Wallace Church, a Manhattan and San Francisco based brand strategy and design firm working with both private and national brands such as Target, P&G, Whole Foods, Nestle, Coca-Cola, Bacardi, Dell and over 40 other clients in every product category. Rob speaks on brand identity issues at Columbia Business School and conferences throughout North and Latin America, Europe and Asia.  He is a published co-author of “Really Good Packaging Explained” and well over 25 articles. The series will appear the next two Tuesdays.

Merchants vs. Marketers
Private Brands: What’s Different, What’s the Same, What’s Next?

As Private Brands begin to rival– if not eclipse– national brands in many categories, there is much to be learned from both the differences and the similarities between the branding processes that drive them. The goal of this three part series of articles is to deconstruct the differing objectives, distinct strategies and unique processes that unite and separate private and national branding so as to determine next generation best practices for all products.

What’s Different: Marketers vs. Merchants and Their Primary Motivations
When it comes to the branding process, perhaps the largest differences between private and national brands are driven by those who ultimately control them.  National brand marketers are motivated by differentiation and innovation, identifying the emerging trend — or in many cases creating a new consumer experience– and tying their brand to it.  As a result they seek to design a singular and unique brand experience.

Traditionally, retail branding has been driven by a merchant mentality.  Merchants “own” a section of the store and seek to optimize profitability in every square inch of that space. They design the in-store experience across many brands, ensuring that they have addressed all relevant consumer needs. While marketers manifest their unique brand experience through proprietary brand design, merchants have traditionally leveraged existing category cues, adopting the leading brand’s perceptions and offering the same experience at a lower price. This is, of course, changing dramatically.

What’s the Same: Strategic Design Drives Meaningful Differentiation
The former “me too” Private Branding strategy has now given way to a well crafted, well defined and proprietary Private Brand experience, which like national brands, is primary communicated through brand strategy and design.  The great success of well planned, well designed Private Brands, such as Safeway’s O Organics or Starbuck’s retail coffee line, prove that Private Brands work both inside and outside of the retailer that invented them. This blurs the line between private and national brands and the processes that generate them.

Merchants are now brand champions. Marketers are now category managers. Retail brands are attracting the smartest marketing and design management minds away from traditional CPG’s. Retailers are also working with elite brand strategy and design consultancies, evolving traditional CPG branding strategies to be more efficient and effective without compromising the final deliverable. And this investment in a brand identity strategy and design is paying off.

What’s Next: A Unification of the Branding Process
With notable exceptions (to be discussed in future posts) we see that many of the same national branding processes are now being adapted by Private Brands.

  • Pre-Qualifying Brand Positioning: The same diligent effort used to position national brands now determines a Private Brand’s unique positioning, its hierarchy of messaging and how to best articulate the brand message. In all cases, the most successful brands use research to pre-determine their brand’s value proposition, defining its unique place within the category, which in some cases also includes predetermining the visual strategies that best evoke brand perceptions before initiating the package design process. This helps synthesizes all brand communications at every consumer touch point.
  • A Higher Design Aesthetic: Both national and Private Brands are enjoying a rising tide of interest in simple, effective, intuitive and evocative design. As a result consumers demand more effective design at a higher aesthetic in both national and Private Brands, again blurring the former distinction between them.
  • Design Drives Value: An increasing number of Private Brand builders are proving to their executive management that branding and design drive profit.  This incremental profit can be realized by justifying higher margins and/or better targeting its core consumer experience (and stealing share from national brands in the process).  These retail brand leaders are quantifying their investment in branding, and when they do, they prove that brand identity design generates a higher return than advertising, promotion or any other effort.

What’s Your POV?
You are invited to participate in this on-going dialog by adding your comments.  Only with shared insights will processes advance. Your insights are critical to our mutual success, so please contribute.

Rob can be reached at rob@wallacechurch.com

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Christopher Durham

Vice President of Retail Brands at Theory House

Christopher Durham is the founder of My Private Brand and the VP of retail brands at Theory House, the branding and retail marketing agency. He is a consultant, strategist and retailer with close to 20 years of real-world retail and corporate experience creating, launching and building billion dollar Private Brands.

3 Comments »

  1. Tom Ewing - T Marzetti Company Aug 31, 2010 at 10:51 am - Reply

    What’s next – Private Brands as tools.

    As retailers become more focused on owning the shoppers, they will use their brand or range of brands as tools to gain the big shopping trip from their shoppers more frequently than they get today. Some brands will be economy brands, some brands will be indulgent, but all of them will work to give shoppers more satisfaction than they get at other retailers so the shopper gives them more of their food budget. Brands have to be relevant, and as retailer brands become more relevant to shoppers, they will help determine where the dollars are spent.

    • myprivatebrand Aug 31, 2010 at 11:00 am - Reply

      Thanks Tom
      I appreciate your comments, you are right, “Brands have to be relevant”
      Christopher

  2. Neil Shackleton Sep 1, 2010 at 4:33 am - Reply

    Great article,
    The age old problem for brands has always been marketeers not ensuring the right metrics are in place to quantify success and then embarking at knee jerk reactions that ultimately pull apart what any relationship with the core consumer.
    Brand strategy ensures the packaging and its evolvement remains focused on the brand identity.

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