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Retailers ‘Push the Envelope’ for Innovative Brand Design

It’s more than a coincidence that so many retailers – 73 in all – are being honored this year for Private Brand design excellence through the Vertex Awards. This recognition speaks to the industry’s determination to break out of old stereotypes and make Private Brand into a highly innovative draw for consumers.

“Design is more important than ever in capturing customers’ attention for Private Brand,” said Jason Bidart, vice president, Private Brand Programs, Fairway Market, in comments at Velocity: The My Private Brand Conference, held recently in Charlotte, N.C.

Fairway won a Bronze Award for a Vertex entry. “Private brands really need to stand out against all the national brands,” Bidart said.

The Vertex Awards, now in its sixth year, spotlights winning retailer design strategies across the globe, encompassing a wide range of product categories. The awards are celebrated between two venues by global regions. The winners from the Americas were honored at Velocity in Charlotte, N.C. in April. Those from Europe, Asia, the Middle East, Oceana and Africa will be celebrated at the Velocity Europe conference October 22, 2019, in Lisbon, Portugal.

To see an exhibit of this year\’s Vertex Award winners join us at
Velocity Europe in Lisbon Portugal, October 21-23.

“We’re honored to be recognized in this way,” said Jeff Gamsey, vice president of Private Brands, Boxed.com, during the Vertex presentation ceremony in Charlotte.

\"\"Boxed was one of two winners of the inaugural Retailer of the Year Award, given to retailers that achieved the highest overall scores based on their winning entries. The other winner was Ahold Delhaize-owned Dutch grocer Albert Heijn.

“We hope to continue to push the envelope and do great things with design, and want to thank our team,” Gamsey said. “It’s super fun working with them to create, new and beautiful products.”

\"\"The Publishers Choice Award for North American was awarded to Office Depot, for its TUL Pro Pens. Marjolijn Chung-Elbert, Design Manager, underscored the imperative of strong package design in Private Brand.

“We need to push the status quo a little bit to be unique in the marketplace,” she said. “Packaging a great way to do that as it’s a way to interact with the customer right from the start. So it’s about user experience, bringing a bit of surprise, and a spark of joy. We spend a lot of time making sure product looks right, feels right, works right.”

Christopher Durham, president of My Private Brand, and co-founder of the Vertex Awards, said the 73 winners, representing a who’s-who of progressive retailers, are part of a record setting 412 entries from 33 countries. These retailers highlight “the absolute best in package design from around the globe, including the first-ever entry from India,” he said.

One of Velocity’s keynote speakers, Gil Phipps, Kroger’s vice president of Branding, Marketing, and Our Brands, said package design is essential to relaying Private Brand proposition.

“I think packaging helps people to develop relationships with the brand,” he said in an interview. “You want people to feel fantastic when they buy and use your product. If the product is great but the package is something they can’t be proud of, then they can’t feel as wonderful about the brand. So it’s a really important component.”

\"\"April Snider, Art Director, Retail Business Services at Ahold-Delhaize, pointed to the generational momentum for private brand, which inspires companies to emphasize innovative design.

“Right now there’s a trend to make Private Brand seem more modern,” she said, citing the significant interest of Millennials in Private Brand. “We showcase products with clean modern design. We draw the customer in with photography, giving them an idea of what it will smell like, the sensory experience.”

\"\"Steve Kent, Advertising and Creative director, Harris Teeter, said that design helps private brand to shine, and is especially crucial for the most innovative products, “to really shout to the consumer what makes them important and better.”

Harris Teeter was honored for items in its HT Traders line, including a gelato and pizza. Kent said Private Brand is a winning platform for differentiation.

“What excites me most now is the ability to express ourselves more creatively through private brand, and to break away through our HT Traders brand,” he said.

To see an exhibit of this year\’s Vertex Award winners join us at
Velocity Europe in Lisbon Portugal, October 21-23.

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Five Key Takeaways from Velocity: From Branding to Social Responsibility

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.

  1. \"\"

    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.

  1. 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?”

  1. 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.

  1. 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.”

  1. 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.”


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Dig Deeper to Understand Amazon’s Private Brand Strategies

\"\"Amazon has big designs on Private Brand growth, but you need more than a general understanding of its strategies to gauge the real impact.

That is the view of Christopher Durham, President, My Private Brand, who delivered a forceful presentation on this topic recently.

In his keynote address at Velocity: The My Private Brand Conference, held in Charlotte, N.C., Durham said too many observers – from analysts to politicians – generalize and stereotype Amazon and its intentions. He urged Private Brand industry players to avoid the trap by drilling deep into the e-commerce giant’s plans within Private Brands and categories.

“You need to be very careful,” he said. “Analysts tend to only take a shallow look with broad assumptions.”

\"\"The Need to Get Specific
He pointed to a recent study that delivered sweeping conclusions that Amazon faces big challenges in Private Brand. The study, from e-commerce research firm Marketplace Pulse, sparked a series of media headlines that spread the message that Amazon is failing in Private Brands. Among those headlines:

  • “Amazon’s Getting Schooled in the Private-Label Game.”
  • “Study: Amazon Brands’ Sales Duds.”
  • “Amazon Private Labels a Flop?”

Durham said the clickbait headlines gave the false impression that Amazon is on the ropes in Private Brand. That may be a comforting message to competitors, but it doesn’t reflect the reality, he warned.

“That study mostly talked about Amazon Basics,” he said, a brand that sells everyday items, in categories from electronics to home necessities. “It’s the biggest brand, has been around the longest, and has the most SKUs. It’s really an old-school private label. Compare that to the men’s fashion brand Buttoned Down, selling 101 SKUs in men’s wear. It’s very different. It shouldn’t be judged in the same way as Amazon Basics.”

Amazon’s Private Brands are “a huge business, and not a failure,” he said. “Amazon is launching aggressively.”

Bullish Outlook for Efforts
In fact, he said, Amazon’s future is Private Brand. That is already underscored by more than 130 Private Brands across virtually every category; the Whole Foods portfolio of Private Brands, which includes Prime Pantry tie-ins; and Amazon’s full control over its ecosystem.

According to Amazon, Private Brand sales represented about 1% of its overall business, or about $2.77 billion in 2018, Durham said. However, Amazon is not very transparent about its strategies or its Private Brand penetration. There is no transparency into how the number is calculated, what sales are included, what brands or what categories. Additionally, it is unclear whether they include both First Party sales and Third Party sales. Further muddying the waters is Amazon’s  intentional confusion of the term Private Brand, given its more than 400 “exclusive labels.”

One thing that’s clear is the surge in interest in Amazon’s Private Brand. Durham said that audience traffic on the My Private Brand website underscores this point, with a ten-fold spike any time there’s an Amazon story.

Durham cautioned Velocity attendees to go beyond surface-level insights about Amazon’s Private Brands in order to look deeper.

\"\"“If you’re in a specific category and are concerned about Amazon, consider what their goals are in that category or with their brands,” he said. “Is it a margin play? Is it a bargaining chip? Are they trying to differentiate? Are they trying to win? Amazon does not believe every brand or product launch needs have the same goals or be disruptive. Sometimes they just want to steal some share.”

Even more important than the number of Amazon brands is the wide variety of missions, he said. There are “private label” brands, including Amazon Basics and Amazon Elements. There are immersive brands for interacting with Amazon’s ecosystem, such as Echo, Kindle, and Fire. There are brands specific to certain categories, including Wag, Presto and Happy Belly. Lifestyle brands include Good Threads, Stone & Beam, and Belei.

\"\"Learning from Failures
Durham said one of Amazon’s biggest strengths is its ability to learn from failures. “Some of Amazon’s Private Brands will fail,” he said. “All won’t. They will learn. They have learned from failures before.”

Amazon tried to jump into the phone market a few years ago with the Fire Phone, a Private Brand that was too expensive and didn’t have the right features, he said. It led to a $170 million write down. It was dubbed, ‘The Fire Phone Debacle’ in media headlines.\"\"

Another example was Amazon Elements diapers, which didn’t succeed in quality.

However, Amazon learns lessons from every failure, Durham said.

“Within a short time they pulled the diapers,” he said. “They later relaunched diapers under the mama bear brand, with good reviews. They learn what to do by learning what not to do.”

Durham said Amazon’s success is driven by the central operating principals of founder Jeff Bezos.

\"\"Bezos said, “The biggest needle movers will be things that customers don’t know to ask for. We must invent on their behalf,” Durham relayed. “Bezos also says, ‘Failure needs to scale too, and if we don’t take big enough risks, then it’s a problem.’”

Concluded Durham, “I believe Amazon still behaves like they are young. They are still joyously fearless. That means retailers and the private brand industry need to pay attention. Move faster than you ever have before.”


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Lessons From a Publix Brand Innovator

\"\"He was an early Private Brand disruptor who proactively led Publix Super Markets into an era of innovative brand design. Later, he spearheaded successful refreshes of Publix’s iconic logo, and helped drive differentiation for in-store design.

However, Tim Cox, Publix’s Director of Creative Services, gives much of the credit to his team – rather than himself – for success in enhancing the Publix brand.

“It’s a lesson that has served me very well over the years,” he said during a keynote session at Velocity: The My Private Brand Conference, held recently in Charlotte, N.C.

“I always tried to surround myself with people who are better than me, and always hired people who were better than me.”

The Publix executive was interviewed on stage by Christopher Durham, President, My Private Brand.

Cox’s tenure at Publix has spanned different eras of Private Brand development in the industry, from an earlier period when food retailers primarily emulated national brands, to the increased innovation of today.

Importance of Boosting Innovation
He spoke candidly about Publix’s transition through those periods, and the role he and his team played in helping to drive the retailer towards greater innovation, beginning about 15 years ago.

“Grocery retailers were leaning on the equity of national brands,” he said, noting that he and his team were looking for an opportunity to help Publix break out of that mold.

They took it upon themselves to initiate research and develop new concepts.

“It’s not typical for the creative team to initiate projects,” he said. “But in our minds, we felt there was equity in the Publix brand, so we developed concepts to leverage that.”  Those ideas focused on simple and clean designs to differentiate from all the brands whose messages were “shouting” and “screaming” on shelves.

Durham responded by observing, “Today you would be called a disruptor, because you went in a different direction.”

Nevertheless, Cox acknowledged that initially, it was difficult to sell the new concepts internally, because it represented such a new direction. The first redesigned package – a macaroni and cheese product – appeared on shelves around 2003, at first meeting with some customer resistance. However, shoppers changed their attitudes as more items were rolled out.

“Customers noticed all the products looked like they went together,” he said.

Jump ahead about 15 years, and today those basic design concepts are still the focal point for the roughly 3,000 SKUs in the main line.

Meanwhile, Cox observed that today the relationship between the creative team and the rest of the organization is highly collaborative.

“Today you need to be more agile and get to market as quickly as possible, so you need to get advocacy up front,” he said.

\"\"Evolving Design for New Eras
Over the years, Cox and his team have gradually updated the Publix logo and how it is used across categories. At first, this involved relatively minor tweaks, like adjusting the letter spacing. By the time digital marketing became more important, the team realized the logo needed to work better in the digital space, including as a homepage icon. That led to the creation of a “brand mark” that better integrated with sub-brands in deli, bakery, pharmacy, Aprons, and Publix Premium. Those brands were then able to leverage the equity of the Publix Circle “P,” the brand mark.

Even more recently, Publix made further updates to the logo for its main line, transitioning from the black circle that contained the logotype, to making the black dot the actual Publix brand mark. That move is fostering even more synergies for the entire brand experience, across products, packaging and store.

In making updates, Cox said he was always aware that logo redesigns were not about “fixing something.”

“My team was able to work on a brand that had so many fans,” he said. “So I never had to work on a broken brand, and I recognize that’s a great benefit. 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.”

\"\"Cox said that today GreenWise is “our fastest growing line.” It’s “both a product brand and a brick and mortar store brand.”

A recently opened GreenWise store in Tallahassee, Florida, underscores the latest in-store design directions. The store focuses on natural, organic and specialty items.\"\"

“We did something fresh and unexpected,” he said. “Clever use of typography and illustration create a touch of playfulness in an environment that is otherwise clean and simple. The store is easy to navigate, with open sightlines.”

In reviewing his Publix career, Cox said he values the “people-focused” culture of the retailer, and also the expertise of the designers he’s worked with over the years. On that latter point, he cited another key lesson he’s learned.

“Trust seasoned designers, because they think more like customers than anyone else I know.”


RETAILER INVITATION

I would like to personally invite retail private brand executives from around the world to take the Velocity Stage. Velocity is the perfect opportunity to demonstrate thought leadership, tell your story, build your brand or push the industry forward.

There are two opportunities:

Email Christopher Durham and speak at Velocity.


 

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Walmart Eyes Bigger Mission in Private Brand Growth

\"\"Private Brand has become a mission-driven strategy for the world’s largest retailer.

In a passionate keynote presentation, Jack Pestello, senior vice president, Walmart Private Brands and Manufacturing, said the retailer’s ambitions are no less than to drive sustainability, trust, and innovation, and to change the industry.

“We use Private Brand to lead the way on sustainability,” he said at Velocity: the My Private Brand Conference, held recently in Charlotte, N.C.

Pestello pointed to the retailer’s stances on palm oil and post­consumer plastics and cited an emphasis on end­to­end supply chain.

“We focus on good brands that deliver trust with customers. We want to be good for customers and for the world.”

Boosting Quality Drives Loyalty

Pestello said the Walmart Private Brand portfolio, which includes brands such as Great Value and Sam’s Choice, is “the world’s biggest and fastest-growing.” It is growing 2.5 times faster than the company’s closest competitor, according to a data point he relayed.

“In the last month, 70% of Americans have shopped at a Walmart, and 90% of those have put private brands in their cart,” he said. “It is an unbelievable household penetration.”

However, when Walmart started its journey to reinvent Private Brands four years ago, it realized the effort needed to reach beyond just price.

Price is very important to Walmart, but “the days of sitting around and haggling over 5¢ are gone,” he said. “We have to think about efficiency, ask farmers how they grow, and then help remove costs from the system.”

He continued, “Price matters, and we have invested in price. But customers buy one time on price, and after that they come back for the quality.”

The retailer brought in new team members and gave them a mandate to improve private brand quality. Much of the work was energized by the company’s mission-driven focus.

“We have purpose, it’s about changing peoples’ lives, and saving people money so they can live better,” he said.

Focus on Clean Label, Transparency

A key driver has been the importance of social responsibility, including through clean label products.

“It’s a professional and personal passion,” he said. “It’s beyond clean label, it’s about sustainability, and how do we make a better product and think differently. Is it sustainably grown and harvested? Do we pay people to work at a fair wage?”

Transparency is a central part of the effort, because, “If we’re not transparent, the end of the story is told by our customers,” he said. “We want to tell the customers where the tuna was caught, and how it was processed, and in what country. And where it was canned. And we want to do that across thousands of products. We want to tell the whole story, and drive better products at lower cost.”

Pestello positioned the strategy as connecting with the big picture of supply chain, engaging with farmers and other stakeholders, and considering how to feed the world of the future. “We’re thinking about the entire supply chain, back to how are we feeding our calves, visiting farmers to see what they are feeding cattle, and thinking about the-end to-end supply chain. We’re in this for the long haul.”

Walmart is driven by other important factors in its Private Brand development. These include collaboration with suppliers for innovation, fostering an omnichannel environment for customers, and maintaining a strong fresh perception because that “gives you credibility across the store.”

The company’s ubiquitous presence across America makes Walmart’s case unique, because its shoppers have such a wide variety of needs, given that Walmart’s. customers mirror America’s customers. Pestello indicated this requires deep research that goes beyond merely crunching numbers.

These efforts include examining customer home pantries and shopping along with consumers in stores. The retailer aims to never forget that its journey has moved from private label to Private Brands, with an emphasis on “customer-led brands” that “aren’t just me-too.”