Retailer Features / Tactics
In & Out of the Box

Brands or Products? What Are We Building?

June 30, 2014

Are we brands or a series of comparative products with some unmemorable names on them?

There has been quite a bit of migration from the use of the term “private label” towards “store brands,” “own labels,” “own brands,” etc. Why does this matter?

I think it does matter, because how we think about our products and brands is crucial to the message we send our customers. We read much about the fact that “brands” are suffering out there in the big, bad world. Or that they are manufactured by an ever-decreasing number of mega companies that are systematically gobbling up the world and offering little room to maneuver for retailers or consumers in terms of real choice. This applies in many spheres of consumption. Retailers disappear—as do airlines, electronics, book stores, automobiles, mobile devices, newspapers, magazines, clothing and many other consumer products. And yet others thrive, merge and emerge.

Looking at the marketing of much of our store brands leads me to be convinced that the “same old same old” of yesterday still exists in so many cases. The communication of our products as a series of special offers, discount comparisons and items that look too much like their counterparts tells the customer that we are offering a whole lot of special prices rather than a series of unbeatable “brands” that are exclusively available in “our stores.” The lack of dynamic marketing is astounding.

It is high time we took a real hard look at what our customers really associate with in terms of the private label products they buy from us. Is it a matter of this particular product this week because of its price? Is it a matter of the massive off shelf display of an item this week that will be replaced next week by something else? Do they rely on the flyer or the impulse of a really good price? If that’s the case, then what are we building? Certainly nothing that is sustainable in terms of brand asset value.

If we build an awareness of “our brand has various assets” and use quality, price, guarantee, innovation, uniqueness, exclusivity, etc., then we have something to say to the consumer that they will recall and perceive as valid reasons to come to our stores.

If we rely on the weekly flyer and the coupon, then our days are surely numbered—or at least seriously limited.

Yes, of course, we all know that there is a large percentage of consumers that shop by coupon. But how is that we allow and encourage cherry pickers of items at low or zero margin to drive our business? I urge everyone to do a serious analysis of what their consumers understand about their private label offering and then look back at the communication we made to them over the last 12 months. What is the asset value of the brand rather than the asset value (read: margin) of the weekly sales? Starbucks is not driven by discount and coupon. Nor is BMW or Hyundai. We do not shop at Sephora or Joe Fresh because of weekly deals. We buy these cars, or drink the coffee, or buy the makeup or a pair of shorts because of the inherent value that exists in these brands. We go out of our way to seek them out. We recognise the brands and what they give us.

What can we say about the 3, 4 or 24 brands we carry in our portfolio? Most retailers spend more time and money building the brand of the store, the banner name over the door and the locations where they are found. Of course, we want the customers to know where we are and the services we offer. But ultimately, once we get them inside, we bombard them with products and messaging sold to us by these ever-growing owners of big brands available everywhere.

Of course, it is more important to most that their next quarter shows bottom-line improvement. The easiest form of resistance to that shareholder pressure is to take what we can get—by discounts, marketing funds, promotions, extended payment terms and the rest—but unfortunately not by communicating the value of our own “BRANDS.” How many retailers today can still not really accurately account for the “gap” in margin between “big brands” and the sum of all our SKUs that fall under the term “private label”? It’s a sad fact that while we have had category management for 30-plus years, we still can’t prove to ourselves that there is a gap. And a gap that we can and should grow!

Let’s all look to our brands and the products that carry them. Do they all have a real “reason to be,” and do they all resonate sufficiently with our customers that they know which stores carry them and can articulate why and when they buy them? Is our portfolio analyzed every 3–4 years, and do we take action on those products and brands that don’t?

Do we have a real social media and marketing plan to harness the power of what we might have on our shelves? Or are we harnessed to the treadmill of the flyer and the next discount from a major supplier?

As far as I am concerned, we should be able to call our own brands “big brands.” And if we can’t, then let’s all take a serious look at what we are doing.

 Till next time. 

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