Private Branding Shift At Sweden’s Hemkop

Christopher Durham Jan 6, 2011 0

This guest post comes from frequent contributor Rob Wallace the Managing Partner, Strategy at Wallace Church, a Manhattan and San Francisco based brand strategy and design firm. The post is focused on his recent trip to the Pacsem Conference in Sweden and corresponding store visits.

Private Branding Shift At Sweden’s Hemkop

The Pacsem Conference, a pan-European branding summit, was recently held in Karlstad Sweden where insights on European private brands were provided by a number of speakers.  I had the chance to add to the discussion by delivering a talk entitled “Redesigning Innovation- The 10 Best Practices of Design-Lead Innovation” on of the value of applying Design Thinking to the most complex brand architectures.  Please feel free to browse and download all of the presentations at http://www.packagingarena.com/pacsem/program

While there I audited several Swedish retail environments and questioned both shoppers and store personnel on the health of private brands in Sweden’s supermarket retailer, Hemkop.

Consumers reported that, unlike the great market leaders ICA, Coop, Axford and Bergendahl, which together represent over 85% percent of share, the struggling Hemkop brand has been perceived to be over priced and a poor value for the dollar (or kroner!)   According to the Hemkop folks restocking the shelves and their consumers interviewed, this perception has hurt the brand.  And as a result, Hemkop have been extending their private brand offerings to fill the value gap.

This retailer now has two private brand tiers, their store brand, aptly named “Hemkop”, and a second tier more curiously named, “Eldorado”. It’s not hard to discern their tiering strategy from the two brand identity architectures. Hemkop is clearly attempting to be the national brand equivalent while the Eldorado brand is, as one consumer aptly put it, “extra cheap”.

Both the Hemkop and Eldorado private brand strategies and their identity architectures were, in my opinion, overtly functional, expected, and devoid of emotional relevance.  That is until I noted an important change in what I perceived to be new identity strategy for the Hemkop brand. A new unifying black background significantly increases the quality perception of the Hemkop spice and sauce offerings.  The much more own able and playful experience evoked by their new popcorn brand redesign brings a much-needed emotional engagement to the brand. Could this signal that this Swedish retailer is finally embracing the value of design? While they have a long road ahead of them, Hemkop seems to now understand that a retailer’s private brand experience drives the entire retail perception. Stay tuned for future posts as this expected renovation continues to evolve.

Rob Wallace is 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.

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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.

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