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Exclusives: Merchandising Trends

Private Label Merchandising Today

As private label evolves, associated merchandising tactics must likewise change with the times.

April 1, 2014
Trans

In order to gain current insight into the best merchandising practices for today’s private label retailers, Douglas J. Peckenpaugh, editor-in-chief of PLBuyer, sought perspective from Jeff Weidauer, vice president, marketing and strategy for Vestcom.

Douglas J. Peckenpaugh: How important is shelving location when seeking to maximize merchandising impact?

Jeff Weidauer: The importance of shelving location depends. For a well-known product that shoppers will seek out, shelving location is not as critical as it is for a new or lesser-known brand that needs the advantage of being seen on the shelf.

DJP: How are retailers changing the way they shelve their private label brands these days?

JW: We aren’t seeing a significant change in this area. Most retailers are slotting their store brands next to the competing national brand, particularly if it’s a national brand equivalent (NBE) and there is a price advantage.               

DJP: Is it always advantageous to merchandise equivalent national brands and NBE private label products side-by-side?

JW: While it is standard practice to merchandise equivalent national brands and NBEs side-by-side, it’s not always the best approach. Depending on the category and the store brand equity, it may make more sense to group all of the private brand products together.

Categories that make sense for grouping are those where the shopper is thinking about the category vs. the product. A couple of examples would be soups or organic products where it’s easier to shop them in a “brand block.”

DJP: What are some best practices for merchandising national-brand-better (NBB) private label products?

JW: The first and most-important thing to do when merchandising national-brand-better private label products is to treat them like national brands. Don’t compare them with the national brand.

Retailers need to see their store brands as a viable offering for their customers that they are proud to stand behind and truly believe provides higher quality and greater value. This is not cheap food cheap. It’s an extension of the retailer’s banner brand and should be given all the support needed to help build on that banner brand equity.

Additionally, focus on the unique aspects that the store brand delivers beyond price. That means communicating those differences at the shelf edge where the shopper is most likely to see them.

Since retailers ultimately control what’s on the shelf edge, they can make certain that, while providing educational insights for shoppers, they are putting an emphasis on store brand items. By providing incremental data points about the private brand products in a certain category, there is a connection to be made with the shopper that can cross to other store brand categories.

Information such as health benefits or recipe ideas can be presented, along with the benefits of the store brand that will ultimately reflect on the retailer’s overall brand image. This “halo effect” can be a significant benefit to retailers as they work at differentiating themselves from competitors in areas other than price. A strong private brand creates an overall loyalty for the retailer.

Remember that products change, competitors change, and the needs of shoppers change. Private label product information should change on a regular schedule to keep the message fresh. After 6 or 8 weeks, shelf edge information—as with any POS material—becomes part of the landscape and is no longer effective. Change things up on a regular basis.

DJP: Do merchandisers employ similar tactics these days when merchandising national brands and private label products? What are the differences?

JW: Private label products still tend to be the red-headed step children of the merchandising world. National brands act as category captains, and private brands get whatever is left after the name brands take their share.

DJP: How can retailers maximize merchandising tactics across their entire portfolio of private label products?

JW: Retailers can maximize merchandising tactics across their entire portfolio of private label products by looking at each category and making decisions based on the needs of the category. There is no “one size fits all” solution to merchandising, so what works in one category likely won’t work in another.

DJP: Have you seen any particularly effective approaches to cross-merchandising private label products?

JW: The most effective cross-merchandising tactics are those that take into account how people shop. Cross-merchandising should be an attempt to assist the shopper, not just a way to sell more.

The ideal cross-promotion will tie a strong item to a lesser one, or a promoted item with a regular-priced one. Retailers can work with organizations such as the PLMA to find out what is selling and what products are good to be paired together. National brand CPGs may also be willing to help, especially if a non-competitive private label item is being coupled to its product.

When it comes to cross-merchandising private label products, keep in mind these important tactics:

• Cross-merchandise complementary products—retailers should choose products that go together, e.g., tuna and mayonnaise

• Choose products that create a solution for shoppers, such as putting together a meal

• Add unique value to the purchase

• Flag all the products in all the locations in the store to make them easy to find, and tell the shopper where they are

• Offer cross-promotions every day, and change them out regularly

DJP: Should retailers consider merchandising tactics an extension of their overall branding?

JW: Absolutely. Merchandising has a tremendous impact on shopper experience, and it’s that experience that sets the brand image in the mind of the shopper as much as any advertising.

DJP: How is the advent of “Big Data” changing merchandising tactics?

JW: Big Data is changing merchandising tactics because better information—properly used—is always preferable.

 Being able to monitor a planogram in real-time based on shopper behavior and make changes is a reality. The ability to gather and use broader and deeper shopper information can now mean the difference between a brand being successful or not.  

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