Thinking Inside the Box

August 7, 2008
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Dollars and Sense!

Private label is a great way to improve your position and that of your time- and cash-strapped consumer - but it takes strategic thinking.

In North America, we can be lulled into a sense of false security by the current sales growth in our private label business. But we really need to focus on the fact that unit sales are down! Yes, folks, down.

This is a shock to everyone, especially to those of us who have been forecasting an end to the glacial growth in our business. For some time now, we have seen signs that suggest we could expect some significant growth. Major retailers have been doing so much great work in growing the business, and tons of research suggests consumers are growing in confidence and awareness. So what’s going on here?

It would appear that shoppers are not moving away from the brands as we might have expected. Industry numbers suggest a large number of categories still have extremely low penetration numbers, and the growth in some categories is not sufficient to move the needle up the dial in total.

So what should we be doing? Well, first we must consider the current economic situation in our own marketplace and see where private label could provide an added incentive for our customers. We have an opportunity to present our private label programs as a point of differentiation between first, the brands, and second, our competitors. It might be difficult to grow penetration in high-penetration categories, so let’s get to the next group and actively ramp up our product introduction plans. In every category, we will be able to find knowledgeable and willing suppliers to sit down and talk category strategy to win share and improve margin. So what are we waiting for?

Private label is a really great way to improve your position and, just as important, the position of your time- and cash-pressed customers. Of course, it takes strategic thinking. But you’ll find tons of resources to help you if you don’t have the people or the time to do it.

Not making the time, however, is possibly the worst thing you could ever do. Especially right now. After all, it’s a matter of dollars and sense.

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