This is the next in a series of interviews Christopher Durham, founder of My Private Brand, will conduct with private brand leaders around the world. Today, he discusses retail-owned brands and their evolution with Steve Gibson, Vice-President – Global Sourcing, Merchandising & Private Brands at the Vertex Award winning retailer The Source – a consumer electronics small box retailer with over 550 stores across Canada – and Vice-President of SeaLink Sourcing Group Limited – an Asia-based electronics sourcing company with offices in Hong Kong & China. A retail ‘lifer,’ he has spent 30 years with leading national retailers in Canada in merchandising, global sourcing, and product development, with a love for building private brands.
CD: What is your first memory/experience with Private Brand?
SG: I remember, as a young man in the grocery store with my mother back in the late 70s, looking at the Loblaw’s ‘No-Name’ iconic yellow packaging and asking her why there was no name? She explained to me the concept of the store brand and the value that it created. That has always stayed with me.
CD: What does the future of retailer owned brands look like?
SG: The future will continue to be strong provided the store brands continue to offer value – whether that be price, features, quality, tastes, etc. Private Brands began as a ‘me-too’ offering, and have greatly evolved since then. If we continue to go down the path of innovation and value, we will see continued success.
CD: Retail and the shopper has dramatically changed over the last few years (mobile, online, social media, Amazon, Google). How have your Private Brands responded to these changes?
SG: We’ve used these tools to help us accelerate our Private Brand sales. Our own website allows customers to rate our products and provide feedback. The positive feedback provides other customers with confidence in our product. Any negative feedback we investigate and integrate into future product development.
We’ve also utilized online stores in other channels, such as Amazon Marketplace, to list our Private Brands. This not only expands our potential customer base, but also builds brand credibility as customers see our product in several channels.
CD: What private brand accomplishments are you the proudest of?
SG: Definitely our HeadRush brand (headphones and audio). This has come the farthest in terms of brand evolution – product quality, form factors, packaging, price points, customer feedback. And of course, winning a Vertex award.
CD: How have your private brands evolved over the last few years?
SG: I think it’s fair to say our brands are in a constant state of evolution. In the electronics business you just can’t stand still. Product lifecycles continue to get shorter and shorter based on the new technologies that continuously emerge. Our brands started with a solid foundation covering the opening price points, typical of where most private brands are positioned. As we gained acceptance from our customers, we continued to elevate to higher price points, which were also successful. A great example would be our HeadRush earbuds – when we first introduced the brand, we were selling opening price point $9.99 earbuds. This year we just began offering $99.99 earbuds. If anyone would have said even a year or two ago that we’d be carrying $99 private brand earbuds, I would have been extremely hesitant.
Other things we have done to evolve our brands are:
- Utilize any customer feedback we receive in creating future product,
- Continuously focus on quality and improve product wherever possible,
- Consider the cost and value of adding extra features, and
- Invest in all packaging elements – the creative, card stock, inner trays, etc.
CD: Is private brand a strategic priority for your organization?
SG: Yes. The margin in consumer electronics National Brands overall is extremely thin. Private Brands contribute significantly to the bottom line.
CD: What role should design play in solving private brand/retailer problems?
Design is key – not only at the packaging level, but the item level as well. No one wants an ugly product in an ugly box. Design is your first impression with the customer. If the design does not catch the customer’s eye and appeal to them, the rest is academic.
CD: What advice do you have for retailers trying to take their brands to the next level?
SG: Treat it as a brand and not a private label. Give your own brand the same treatment and amount of resources as you do the National Brands. Get as much input as possible – listen to your customers, stores, and merchants. Pay attention to your competition. Have an end goal in mind and then work toward it. And I can’t say enough in terms of innovation. Don’t stand still.
CD: What advantages does Private Brand have over National Brands. What disadvantages?
If built right, value is the primary advantage. You take product similar to a National Brand and offer it to the customer at a lower price or take a more feature-rich product and offer it at the same price. It gives the customer an alternative to the National Brands and creates a loyalty when the customer is happy with their purchase.
Disadvantages can be where you have not strategized properly – for instance, a lack of innovation leaves you to compete only on price advantage, and if that disappears for whatever reason, then you have nothing left to fall back on.
Another disadvantage could be a quality or other issue that arises and can damage your entire brand. All it takes is one bad experience to do significant damage.
CD: How did you get into the Private Brand business?
Purely by chance. By beginning a direct import program early in my career, I realized very quickly it would not amount to much without a Private Brand to tie it all together. That was back when Private Brands were essentially positioned as ‘me-too’ without a lot of emphasis on innovation. It was definitely a learn as you go experience.