This is the second guest post in a three-part weekly series 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 – part two
Penetration is not the goal
For years there has been a mentality to set very precise store brand penetration targets within retail organizations. Penetration targets within the relevant channel, versus the competitive set, and written in a way that argue for x% increase over the next three to five years. Plans are written that address the number of new items to be developed, and the necessary merchandising and promotion to get to the goal. Blah, blah, blah.
Penetration is a purely functional measure, and it can be forced rather abruptly. I mean, let’s face it, if you wanted to get to 100% penetration in condensed soup overnight just take Campbell’s and Progresso off the shelf. You can get there by strong-arming the assortment. Now this would be a stupid thing to do, because you would be ignoring true brand loyalties that exist within the category, but it illustrates the malleability of the measure.
We should be spending more time developing our brand credibility, through better design, websites and social media strategies. It is remarkable how many retailers confuse internally-facing positioning with communication that lives externally. Case in point is Kroger’s Mirra beauty care line which describes itself as “for family-focused women seeking effortless beauty”…. is that really what you want to say? Sounds more like an internally facing statement.
Consumers will buy more private brands if they are created more credibly and feel like brands in their own right. Look at Target. Look at Via Roma at A&P. Look at Waitrose and Boots in the U.K.
These are store brands by their own design and marketing virtues that have increased penetration, but more importantly, have engendered true brand loyalty. Assortment, merchandising and me-too product development didn’t contort these outcomes, it was the credibility of the brands themselves that was the primary driver in their success. In the future, we should be looking to loyalty as a better measure than penetration.