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Retail Buying

Notes With respect to the display’s placement within the store, the retailer was again able to
identify a clear and measurable difference between the two alternative merchandising
strategies. End-caps adjacent to the product aisle were largely ineffective, whereas
nonadjacent end-caps performed very well. These combined insights led to a customized
and highly-effective strategy for launching the private label product based on differences
in store format.
In support of the new product launch, the retailer sought to experiment with a substantially
higher level of Internet Search advertising than had been used in the past. Using the APT
Suite, the private label product team examined the impact of these search ads, which ran
only on certain days and in certain targeted markets, and measured both the absolute
impact of the Internet campaign on incremental new product sales, as well as increased
consumer awareness maintained during the period of “off advertising.”
In addition to understanding overall performance of the Internet campaign, the APT tools
provided the client with the ability to break down the overall result and identify specific
markets and customer groups that responded most positively to the new private label
product message.
The media-driven insights provided the Private Label team with the information necessary
to better target their search advertising and achieve a higher ROI than would have otherwise
been possible. APT’s Customer Subgroup Analysis allowed the company to break down
the results and identify the demographic correlates of Internet advertising performance.
Specifically, the advertising was demonstrated to be far less effective in areas with low
population density, such as non-urban environments. With the demographic data in hand,
the private label team had additional options for retargeting Internet content to expand
appeal and target spend in communities with greater overall media support ROI.
The Results
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.
Specifically, the test revealed that:
The product performed measurably better in the store format with a more narrow range
(Format A).
Format A stores received far less benefit from additional signage when compared to the
larger, more extensively ranged (Format B) stores.
Thanks to this ability to quantify the overall returns on the signage investment, the
company was able to make a highly informed, strategic decision regarding where to
invest in additional signage. Likewise, measuring the impact of the end-cap display
provided useful information to inform the roll-out. The end of aisle display was very
effective in the narrow range, small format stores, driving significant incremental sales,
but end-caps had negligible sales impact in the larger Format B stores.
Questions
1. Analyze the case and explain the process for buying the private labels.
2. In your opinion, what are the various support services for buying the private labels.

Source: http://www.predictivetechnologies.com/en/index.cfm/solutions/restaurants/business-issues/
menu-innovation/menu-innovation-case-study

13.6 Summary

 Private label brands were traditionally defined as generic product offerings that competed
with their national brand counterparts by means of a price-value proposition.
 Private label brands have clearly become a more instrumental priority for today’s retailers.

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