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Retail Buying

Notes 5. Keep in mind that history repeats itself: Leading retailers such as A&P, Kroger and Sears
have all practiced challenging periods over the past 50 years – some of which was specifically
attributed to an overreliance on their “own” brands (primarily due to perceived
advantageous profit margins) versus national brands that innovate and, most outstandingly
versus customer service. At times they were considered outlets for their own brands more
than consumer-centric retailers dedicated to fulfilling customer needs.
In order to get ahead and stay in advance of the “private label” evolutionary curve, it is key to
develop a coherent holistic strategy that takes into account the current market fluctuations and
as well as the yet-to-be defined outcomes. If you are going to be your own brand marketer, you
must adopt the more sophisticated techniques of SKU optimization, line management, brand
equity evaluation, consumer expressive and rational feelings and innovation to compete on a
parallel basis with the best and most innovative brand marketers – because your customers
expect you to. The changing landscape will generate sometimes surprising winners and losers
because marketing is a combination of discipline and imaginative innovation – some of which
fits within the context of a retail environment and some of which is antithetic to it.

13.5.1 New Paradigm of Private Label

In the past, private label was a moniker for consumer products that were lower priced and lower
value. Retailers fostered them as they represented a growth engine because of high returns in
terms of margins and profitability on a relatively small investment.

As the industry continues to advance, there is increased acknowledgement that this approach to
private label management may allow for near-term gain, but can have a detrimental impact on
a retailers’ long-term success.
There has been a rapid shift in mindset about the role and requirements for today’s private label
brands. Retailers are evolving to a new definition and greater focus for these proprietary offerings
to elevate their stature and influence on the current and future business strategy.
Today’s private label brands need to embody the attitude and demeanor of an “own” brand.
“Own” brands are relevant to the broadest set of audiences. The trade feels an affinity and desire
for the “own” brand to prosper. The consumer is loyal to “own” brands and seeks them out as an
integral part of his/her lifestyle. The retailer celebrates and nurtures the “own” brand as a vital
embodiment of its brand proposition that will build and sustain a greater degree of loyalty.

This new paradigm of private label thinking requires that retailers consider an arsenal of often-
overlooked business and branding tools to further success.

Notes Category management and brand management must work together to fuel the
marketing strategy. One cannot replace the other. Both product and positioning points of
difference set the “own” brand apart in consumers’ minds. A consumer-centric approach is
at the heart of “own” brand development and elevates above the product-centric thinking
of the past.
In order to have a consistent and compelling brand voice, retailers need to understand the
contribution and role of proprietary or “own” brands within their business and also within the
lives of their consumers. “Own” brand products, branded communication and expressions should
all be developed in accordance with this thinking.
When “own” brands are appropriately created and steered, they have the potential to reach their
pinnacle of success. In doing so, they create a persuasive connection with consumers, drawing
them into a retail store, but more importantly, becoming an essential, experiential and
indispensable lifestyle choice that they embrace over the long-term.

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