Private ‘label’ is being reinvented as Private Brand, as retailers actively work to build portfolios that engage consumers, differentiate and win.
That point was overwhelmingly confirmed at Velocity: the My Private Brand Conference held recently in Charlotte, N.C.
Speakers from a variety of retail channels outlined strategies around consumer insights, social responsibility, design and other areas in a way that created a unique picture of the state of the industry. That picture, rather than being static, shows an industry undergoing dramatic change. Retailers are actively reinventing their Private Brand portfolios and exploring a range of strategies designed to grow customer loyalty, innovation and profitability.
Following are five key takeaways from Velocity that demonstrate the dramatic changes impacting Private Brand.
REINVENTING PRIVATE BRAND: Retailers are moving along their journeys of reinventing Private Brands, and while there’s a lot more to do, they are increasingly relaying their success stories.
“We started this journey about four years ago,” said Jack Pestello, senior vice president, Walmart Private Brands and Manufacturing. He said that Walmart needed to improve Private Brand quality, and has achieved success by focusing heavily on that aspect. “We said, ‘we have to operate like we’re the brands we deserve to be.”
Fairway Market’s Jason Bidart, vice president, Private Brand Programs, described how the retailer has been reinventing the Private Brand efforts of this iconic New York-based institution
“We said let’s start from scratch to redefine, collaborate to build a cohesive program,” he said. “Let’s create brand segmentation to speak to different segments of our customer base.”
Wakefern Food Corp.’s Chris Skyers, vice president, Own Brands, and Laura Kind, Marketing and Packaging director, said their company’s Private Brand reinvention involves not just rethinking products, but also partnering with specialists and streamlining internal processes to accelerate growth. The retailer-owned cooperative operates 355 stores across 10 states.
- EMBRACING CONSUMER INSIGHTS:
Retailers are delving deep into consumer insights to support their Private Brands, according to Velocity presentations.
Walmart and Wakefern executives described shopper research that included visits to consumers’ homes to learn about their behaviors and preferences.
Metro’s Marie Horodecki-Aymes, who is director, Design, and Packaging for the Canadian grocer, pointed to consumer demographic data that showed how much the population has changed in the Toronto market.
Food Lion’s Millette Granville, vice president of Talent, Diversity and Inclusion and Organizational Development, urged the industry to understand the diverse nature of its customer bases. Food Lion gains insights through its business resource groups that address different customer segments, she said.
“Ask yourselves, ‘What will it mean to serve a more diverse customer base?’” she said. “How will you market to different groups to make sure you have what they are looking for?”
- PRIORITIZING DESIGN:
Retailers are placing a major focus on Private Brand design as they continue to improve their portfolios.
Publix’s Tim Cox, Director of Creative Services, described successful efforts over a period of years to upgrade packaging, design and the retailer’s use of its logo for branding.
“We had a lot of equity in the logotype and brand mark, so strategically we were trying to leverage the equity and incorporate it into other brands and the store environment,” he said.
Jeff Gamsey, vice president of Private Brands, Boxed.com, said the retailer’s Private Brand line, Prince & Spring, places a premium on telling stories through design. “Package design is key to how we engage with customers,” he said. “We add humor, food art, and tongue-in-cheek taglines.”
Meanwhile, at Velocity, design was in the spotlight with the presentation of the Vertex Awards.
- DOING THE RIGHT THING:
Social responsibility has become an important component of the Private Brand mission for numerous retailers, according to presentations at the event.
Gil Phipps, Kroger’s vice president of Branding, Marketing and Our Brands, said the Simple Truth Private Brand generates trust, with attributes such as organic, freefrom, fair trade and nonGMO.
He showed a clip of a documentary video produced from his sourcing trip to Rwanda, which relayed the importance of sourcing certified organic and fair trade items for tea, because not only does it provide the best quality product, “but also the best quality of life for the workers.”
Walmart’s Pestello said the retailer leverages Private Brand to drive sustainability.
“We focus on good brands that deliver trust with customers,” he said. “We want to be good for customers and for the world.”
- ENGAGING WITH SUPPLIERS:
A number of retailers pointed to supplier engagement as a differentiating strategy for their Private Brand businesses.
“We must partner with suppliers, and treat them well,” said Jason Ulichnie, vice president of Own Brands, Schnuck Markets. “We are looking for suppliers that want to dare to do something different with us. That’s how we’ll win; exclusively at Schnucks, product you can only get at Schnucks.”
Kroger’s Phipps said the retailer’s working relationships with suppliers have changed. “It’s more of a partnership,” he said. “We develop products together that are more successful. We work together in our test kitchens. We work on really unique seasoning formulations to bring new things to life.”