Private Brand as Media: Using Your Brands to Build Customer Loyalty

Scott MauteWith upwards of 12 million viewers, AMC’s “The Walking Dead” certainly gives advertisers access to hordes of American consumers. But of course, it all depends on the target demographic you’re trying to reach. If the agency is peddling the likes of Ax Body Spray, the new “Assassin’s Creed” videogame or the Hollywood remake of Stephen King’s “Carrie,” then buying time on a show filled with brain-eating zombies is … well, a no-brainer. After all, “The Walking Dead” is a massive hit with the 18-to-49 rating. But of course, if you’re pitching products such as Celebrex or subscriptions to Readers Digest, you might want to steer clear of horrific gore fests and go with the kind of traditional sitcoms and dramas proffered by CBS.

Reach plus the target demographic. It’s advertising 101. And yet even as they spend vast sums on both traditional and digital media buys, many American retailers could reap powerful benefits by using private brands to deliver targeted messages right to their most valued customers. The key is to start thinking differently about the role of those private brands. Yes, these are products. But private brands also represents a medium of mass communication unto itself—with a targeted reach that can be as impressive as any traditional media buy.

Ad campaigns are all about consumer impressions. But think about the multiple impressions created, day in and day out, by the Private Brand lineup in retail environments. To be specific, every private brand purchase carries with it three distinct impressions:

  1. When the consumer sees the product on the shelf (presentation);
  2. when the shopper buys the product (purchase);
  3. and, finally, when the consumer actually consumes or uses the item (product experience).

Let’s say a major national grocery chain happens to sell 50 million units annually across a broad spectrum of private brands. Not only will this translate into a whopping 150 million impressions annually, it will also give the company the ability to precisely target those impressions: For example, a grocer aiming to woo more affluent shoppers and compete with the likes of Whole Foods could ramp up its organic, non-GMO, premium line, all the while smartly branding it to send a clear message to these consumers about the chain’s commitment to quality and sustainability.

In this way, presentation, purchase and product experience can powerfully shape customer loyalty and bolster the company’s brand. This is a big departure from the traditional, product-led approach to private brand: “How do we source product at a good price, get it on the shelf as quickly as possible and sell as much of it as we can?” Where is the brand building in such an approach? Where is the appreciation for the sales and marketing value of well-executed private brands?

A brand-led strategy is one in which you consciously tell a story. Every part of the process—the packaging, merchandising, product type (organic, natural, premium, etc.)—is seen as an opportunity to create a favorable impression.

Chains such as Safeway, Trader Joe’s, Wegmans and Kroger understand these dynamics. They have been using private brand to build stronger loyalty. The benefits here are twofold: It allows them to enjoy the profits generated by higher private brand sales, but it also helps them save money on traditional (and often extremely expensive) media spends. Indeed, private brand stalwart Trader Joe’s doesn’t even bother with traditional media. Its newsletter, The Fearless Flyer, isn’t the company’s primary ad vehicle—that role is played by the private brands in Trader Joe’s stores.

For years now, brands have used traditional media to tell a single story. For Volvo, that story hinges on safety. For Geico, it’s all about saving money. Likewise, you can use a diverse array of private brands to weave a thematically coherent narrative, so long as consistent elements of that story—i.e. particular brand attributes—echo throughout the respective private brands. For example, Walgreens brands—names like Nice, Good & Delish, Ology, Pet Shoppe and more—combine to form a go-to-market strategy that supports a happy and healthy lifestyle. Walgreens has developed a private brand portfolio based on its target consumer, not just on category-related considerations.

A Super Bowl ad makes lots of impressions, but only lasts 30 seconds. A brand-led private brand strategy will deliver results over the long term. This is simply a more powerful approach than the traditional focus on securing low cost product and putting it on the shelf without leveraging its sales, marketing and branding potential. Amid tenacious competition as well as trends such as consolidation, Internet retailing and product commoditization, can today’s retailers really afford to take such old-school strategies into the 21st century? Well, it’s important to play nice, so we’ll avoid calling them “The Walking Dead.”

Private brand industry veteran Todd Maute is a Partner at brand agency and retail design consultancy CBX. He can be contacted at: todd@cbx.com.