Private Label Buyer
Focus on Digital

Where Technology Is Leading Private Label

December 2, 2013

Bill Gates once said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” At the risk of under-anticipating the changes we may see down the road, let’s take a look at where technology can take us.

The future is already here. The in-store shopping experience is quickly becoming a very different from the one we have known. Mondelez International just announced a new shelf technology that can identify the age and sex of passing customers. RFID technology has reached a point where it can simply and affordably be printed right on the label. Cell phones—which have already adopted NFC/RFID technology as a standard—see their processing power growing exponentially every year. Multiple technologies are in development to precisely geolocate shoppers within a store. This means shoppers can now get deals, coupons and offers as they pass by products in the aisle. Cross-merchandising will no longer need displays—the store will be able to “sense” what is in a shopper’s cart and offer suggestions. At home, those same RFID chips, coupled with new apps, will keep inventory of what is on hand, and let consumers know when they need to stock up.

Future shopping trips will not necessarily mean going to where the item is sold. Many retailers already offer online shopping with thousands of items not available in their stores. Staples, for one, is partnering with other companies to create a vast and seamless ecommerce experience that will increase its online offering five-fold. Others may follow the Amazon model, selling any (and every) thing imaginable under one virtual “roof.” Some may even skip inventory altogether, and simply showroom products they offer for same, or next-day, delivery. At-store pickup, home delivery, and drive-through “dark stores” will make it easy to get whatever we want, wherever and whenever we want it.

Selling is “all about me.”Before the advent of the digital age, retailer sales programs were one-size-fits-all. Today, digital ads and promotions can be tailored to each customer based on their individual buying preferences and purchase history. Kroger and Safeway—among others—are already doing this. Of course, each customer will have an app to check the price of the same item down the street, so those promotions need to count.

 This is all fun to imagine, but what does it mean for store brands? The one thing that unites all of these visions is increased—and more individualized—interactions between the consumer and retailer. And each retailer is the sole arbiter of the roles that brands will play. As pricing for national brands becomes increasingly transparent, it is store brands that will provide the point of difference. We can all echo the lines from the 1980s group, Timbuk3, “The future’s so bright, I’ve gotta wear shades.”