The following guest post comes from Christine Sech, Executive Strategy Director at Interbrand. She has a passion for private brand and is looking forward to leading a panel discussing “The New Frontier of Private Brand Design” at the upcoming Velocity: My Private Brand Conference.

Until Kroger’s Simple Truth, I never considered a private brand a destination driver, or a core part of my lifestyle. Sure, the fashion exclusive designer partnerships at Target and the novel Trader Joe’s “Two Buck Chuck” Charles Shaw wine drew my attention, but not enough to capture their names on a shopping list or consistently visit these retailers.

Personal choices, such as my commitment to healthier living and organic products, as well as the need for convenience, made me a ripe target for a brand like Simple Truth. I’m not alone in my affinity, as the brand has grown to 1,400 products and $2 billion in 6 years. I’m not sure if it was a stated role, but in my opinion, this private brand is a disruptor. It helped Kroger broaden its equity, enabling “healthier” choices to be seen as an everyday, affordable purchase versus a niche, premium purchase.

How can other private brands similarly drive traffic for a retailer?

Fulfill the needs of the largest spenders
Per FMI and IRI’s Power of Private Brands report, “Nearly all U.S. Households (97%) are purchasing some form of private brands at retail outlets that sell food products.”* While dollar and unit share spent is highest among Millennials, Gen X spends the most dollars. Net, consumers feel good about purchasing private brands, and they are looking for options across categories. Aligning product offers with their existing and emerging needs and lifestyle choices will create a stronger connection.

Evaluate the role of Brand Portfolio Strategy
Developing a portfolio strategy based on human-centric needs can create a point of difference and motivate loyalty. Equally important is aligning the portfolio strategy with the business strategy and purpose. Amazon now has 76 private brands, with over half in clothing categories. While price tiering is a common strategy, Amazon is creating multiple brands to seemingly cover all trends in a single category, like sweaters. For efficiency and effectiveness, a good principle to follow with your portfolio is to cover the market and target consumer groups with the least number of brands. There may be a gap in the market, but is there always a market in the gap? If the portfolio includes brands that generate meaningful sales but lack a differentiated consumer benefit and positive equity halo back to the business, perhaps a larger ROI may be better found with another brand or category.

Curating a destination driver
Creating a destination brand, whether in the physical store or online, is an effective way to drive association and engagement. This is why you see retailers like Macy’s creating a shop-in-shop experience for their I.N.C. brand or Target’s launching of “Hearth & Hand” with Magnolia, an exclusive brand at Target with Chip & Joanna Gaines. Taking those brands off the shelf, so to speak, drives awareness and enhances retailer perception. This unique experience also generates traffic and transactions.

Provocatively then, what is the next evolution to the harness the collective power of a portfolio? Perhaps it is to leverage the private brands, as a whole, to reinforce the business purpose and the position of the retailer as a core partner for consumers’ lifestyles.


Christine Sech Executive Strategy Director
Christine leads the Strategy discipline for Interbrand’s Consumer Team. She has been in the CPG space for over 20 years helping build brands in a wide range of categories including Food & Beverage, Household Care, and Health Care. She specializes in brand, innovation, and design strategy. Her passion is helping clients and brands to be bold and deeply connect with consumers.

Along with her experience at Interbrand, Christine’s background includes marketing strategy and consumer research with Westfield Insurance, Nielsen BASES, and IRI.

She has a B.S. in Marketing from Miami University and an MBA from Case Western Reserve University.

 

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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.