This guest post comes from Velocity Conference attendee James Butcher, CEO at Solutions for Retail Brands (S4RB)
This year’s Velocity: the My Private Brand conference brought together a collection of private brand executives and suppliers to discuss the future of private brands. Velocity made it clear that retail growth is driven by private brand.
As Jack Pestello, (SVP Private Brands, Walmart U.S) made all too clear, “you can get people to trade down on price,” but you need quality for them to stay. As you would imagine, with the prestigious Vertex awards announced at the event, there was a lot of discussion about design and branding. The consistent theme from Gil Phipps’ (VP Kroger brands) opening presentation to the closing presentation by FMI’s Doug Baker was that we are no longer discussing private labels but private brands.
Too often the two terms are used interchangeably but rarely has it been clearer that you cannot transpose the two. Private label may be about putting a retailer’s brand on a product, but for too long it has been about just that – the label. A label which signaled a lower cost but all too oft a lower quality alternative to the national brand. It served a gap in the market but which in Jack Pestello’s own words was “catastrophic” in terms of the brand value and perception. You can get customers to trade down on price, but that is not enough for them to stay. Customers want a product experience that will have them coming back for more because they want it; not because it is all they can afford. Products they want to buy because they like, but love them because they are also great value.
Private label – as the name implies – is about the label — the name on the pack. Strong private brands are about quality products that deliver on a brand promise. That also means some great packaging and winning brand design. But it has to be bound to products that deliver. The Velocity Conference made it clear that private brands are the key to differentiation. To loyalty. And to growth. The velocity of growth depends on the quality of the experience, which now more than ever means great branding combined with unique high quality differentiated products. According to one presenter, 90% of “national” brand products are sold by all competitive retailers. The message is clear; it is hard to win if you are all selling the same products. So private brands are the ways to differentiate, not only against fellow bricks-and-mortar retailers but also against the much-discussed march of Amazon.
For premium brands such Loblaw’s Presidents Choice or Metro’s Irresistibles retail teams need to ensure they go beyond ‘me too’ products and offer a differentiated experience, and with that deliver on transparency, clean label, and the attributes consumers expect from a brand.
Personally, I feel many confuse quality and consistency. Few would claim that a Big-Mac is the ‘best quality burger’ available, but wherever in the world you buy one (if so inclined) you know you will get a consistent quality; a consistent brand experience that loyal customers can trust. So, there are two dimensions to the ‘quality’ discussion. Yes, premium brands demand quality in the context of a ‘better’ experience. Innovation. Unique ideas. Authentic experiences.
But even for core price driven private brands consistent quality is always key. As a consumer, I need to know I will get the same experience every time, which deliver on the brand promise. This is why several retailers presenting discussed the challenge of a house brand across multiple categories where the promise can differ. And that is about the ‘brand’, not the ‘label.’ Whether you use the term own brand, private brand or store brand, there is little doubt the discussion is now firmly about the brand and retailers need to re-invent the way they innovate, develop, launch and package products – as a brand. Then partner with suppliers to engage them on this journey.
CEO at Solutions for Retail Brands (S4RB)
James Butcher is CEO at Solutions for Retail Brands (S4RB) and is an experienced director and entrepreneur with over 25 years’ experience in retail, as well as manufacturing and packaging for retail.
With an engineering background, James helped to transform retail barcode labeling for grocery retail at Prestek and then Markem and went on to revolutionize date and lot traceability coding for grocery packaging with Markem and then Videojet.
In the intervening years, James was the founding director of Claricom, which progressed to world market leader for Packaging Coding Management software and consulted to major retailers on barcodes, artwork management, and best practice coding and traceability It was during this time that James worked with several world-leading private brand retailers to develop best practice.