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We have entered an age of significant change in the retail world. And as these seismic shifts take place, you need to ask yourself how your corner of private label will weather these changes. Will you embrace this new era and seize opportunity, or will you slip through the cracks of redundancy?
Multiple forces are gaining momentum that will soon coalesce into a historic galvanizing point for the retail industry. Retail channels—convenience, drug, discount, traditional and specialty grocery, warehouse, and beyond, both food and nonfood—continue to blur. We are approaching an “omnichannel” model for retail, where the consumer shopping experience seamlessly travels from traditional media and desktop digital to mobile and into brick-and-mortar, with marketing playing a part throughout.
Peapod, Safeway, and AmazonFresh are still the biggest players in online grocery retailing and delivery. The current market is still relatively small, currently at $6 billion—around 1 percent of the over $850 billion U.S. retail market, per IBISWorld. But AmazonFresh is expected to expand beyond Seattle and Los Angeles into 20 markets in 2014. Walmart is also joining the fray, currently trialing home delivery in select markets. IBISWorld projects online retail sales and e-commerce will grow at an average annual rate of 9.4 percent through 2016 to hit over $290 billion. You absolutely have to expect that every major player in retail is exploring this avenue.
As these factors coalesce into a megatrend, catalyzing the most-significant changes in retailing since the supermarket—and overall retail—boom in the years following World War II, one point will reign supreme: retail branding.
And private label is the primary key to maintaining ongoing engagement with your customers. But the branding of those private label lines, in concert with overall big-picture retail branding, requires complete integration with the omnichannel model in order to achieve maximum effectiveness, from websites to apps, digital marketing, traditional advertising, any and all promotional efforts, merchandising, etc. And while the supply chain continues to innovate at ingredient, product, packaging, technological, and other levels in order to stay one step ahead of the game—aspects you can build into your private label lines—retailers need to reconsider the framework of their brick-and-mortar components, as well as every detail related to their online presence.
Digital and brick-and-mortar can peacefully coexist, even nicely complementing each other when astutely managed. But retail private label offerings should remain at the forefront at every step along the way.