This is the first in a three-part weekly series of guest posts from Perry Seelert the strategic partner of united* dsn, a design consultancy based in New York and San Francisco. In the series Perry asks some hard questions of everyone involved in the business of Private Brand.
The Self-Congratulatory Syndrome
I am going to go out on a limb, but I think a lot of people in the private brands world have gone Hollywood. Not in their appearance or red carpet fashion, no, walk the halls of the PLMA show and you will see some old school briefcases and maybe a clip-on tie if you are lucky. Hollywood is still safe with respect to owning the latest fashion.
Where we have gone Hollywood is in our aptitude to praise one another and be so congratulatory. Hollywood has the Oscars, a Walk of Fame, the Golden Globes, the Emmys, the S.A.G awards, the People’s Choice and dozens of other overdone forums, and our inclination to compliment one another doesn’t seem too far behind. There seems to be too much satisfaction in share increases, research showing how quality has improved, and ego in how we are finally a force to be reckoned with.
We need to deflate the egos to progress and take the next leap forward. The time is right for a strong dose of reality and an injection of honesty, because with an overarching acknowledgment that the private brand industry has developed significantly over the last 20 years, there is still a lot of outdated mantras that are holding it back. Here is a controversial and candid view of things we cling to in the industry that could use a slap in the face.
The 70-23% gap
At almost every recent conference we have heard analysts and retailers exclaim how the 70-23% gap is significant. The gap they cite is that 70% of consumers think that private brand quality is equal to or better than their national brand counterparts, but there is only 23% unit share in private brand volume in the food channel. A 47% upside or “gap”. Let’s debunk this a little bit.
The first thing is that this “% of consumers thinking store brands is equal to” research seems like it has been done forever. I am sure one view is that it needs to be asked every year to see how consumers’ views have trended over time. OK. The problem with it is that it forces consumers to respond in a way that devalues branding, because the question is so functionally-centered. Consumers don’t buy so rationally and so unemotionally, and if they did, then maybe this so-called gap would be relevant. Store brand quality should be a given anyway at this point in the industry’s evolution.
A better way to think about the private brand opportunity is ask yourself how many consumers have any passion or love for your brand? Isn’t this type of brand evangelism that Apple, Nike and Zappos attract with their legions of true advocates?
There is a big difference between consumers who say you hit the lowest common denominator for product satisfaction, through an “equal to” lens, versus a consumer who says that they cannot live without your brand, express their passion for it, and where it has true emotional meaning in their lives. Shouldn’t this be the higher order goal we rise up to rather than just settle for the functional and transactional role of private label? Shouldn’t we be thinking differently about the future?