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Unit 13: Private Label Brands

Self Assessment Notes

State whether the following statements are true or false:
14. In order to have a consistent and compelling brand voice, retailers don’t need to understand
the contribution and role of proprietary or “own” brands within their business.

15. Private label was considered a moniker for consumer products that were lower priced and
lower value.

Case Study Private Label Strategy

n international multi-line retailer with over 1,000 store locations introduced a
new private label product in a limited number of stores in order to evaluate its
Aeffectiveness across a number of key dimensions.
1. The APT client decided to evaluate the product within two different in-store
merchandising contexts. The retailer wanted to evaluate the effectiveness of different
store signage in driving sales and the relative impact of end-caps that varied by
format type and store location.
2. Using a rigorous Test & Learn™ process, the client was able to quickly and reliably
assess the impact of the new product on the entire store.
3. The difference between the two formats was dramatic and led to immediately
actionable recommendations regarding investments in both in-store signage and
end-cap displays.

The Company
An international multi-line retailer with over 1,000 store locations.
The Challenge
To optimize performance, the APT client decided to evaluate the product within two
different in-store merchandising contexts. Format A was a much smaller format with a
more narrow overall range of SKUs, while Format B carried the company’s entire product
range. The retailer wanted to evaluate different in-store merchandising approaches at
both types of stores in order to determine the best signage and end-cap strategy for the
product introduction and whether the strategy should differ by store format. Specifically,
the retailer wanted to evaluate the effectiveness of different store signage in driving sales
and the relative impact of end-caps that varied by format type and store location.
The Solution
To do this, the leading national retailer used APT’s Merchandise Optimization solution to
set a reliable baseline for comparison – a control group of stores – that enabled data
analysts to isolate and quantify the impact of the new private label product on category
sales. Using a rigorous Test & Learn™ process, the client was able to quickly and reliably
assess the impact of the new product on the entire store.
In this case, the cannibalization impact of the Private Label product was smaller than
expected, suggesting an aggressive promotion strategy that might spur additional sales of
the new item. The high level of statistical significance reported on each factor provided
management with a high level of confidence in the potential of the new product to drive
incremental sales and increase margin.
Contd...

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