8 Steps to Building a Strong Private Brand

September 28, 2016

With the rules of retail and category management changing faster than ever, retailers are being called upon to rethink previous assumptions about what customers want and expect from their shopping experiences. We’ve discussed before, and I’ll say it again—if you are building sales projections and store floor plans with major national brands at the center and private label at the periphery, you are missing an opportunity to drive additional sales.

Recently, a retailer CEO commented to me, “I’m beginning to wonder why I even need to carry Tide.” While this comment may seem extreme, it illustrates that times are changing. The comment came up in the context of waning consumer demand for brands, reductions in trade budgets and in consumer response to trade promotions, and other realities facing retailers today.

There is still value in carrying Tide, of course, but maybe it’s time for your brand to be the foundation. At Daymon, we have seen this approach drive revenues and profits up for the entire category. Private brand wins the most, and the solid national brands benefit as well.

To drive total category sales using a strong private brand, pay close attention to the following:

1. Quality Product

It’s critical to establish and maintain the production of high quality products that customers know they can trust. Customers come to know what they can expect from brands very quickly, and it’s essential that your product be known for a standard of quality that will generate sales as it satisfies customer needs and expectations over the years.

2. Pricing

Price, along with quality, are two of the most important factors to a consumer. Daymon is known for our ability to source ingredients and products from around the globe, which enables our partners to offer the most sought-after products at competitive prices. We can assist in determining how your prices could be modified to bring a positive impact to your bottom line.

3. Promotion

Be sure that you are promoting not only sales and opportunities for savings, but also promoting the message of your private brand program. Displays and in-store demonstrations are also excellent places to showcase private brands. Beyond in-store promotions, websites and social media sites are important tools to highlight the popularity and recent promotions for your private brand.

4. Position on Shelf

One of the best ways to showcase your private brand is to make sure that it is receiving premium positioning on the shelf. This makes private brand products more accessible and sends the message to customers that they are worth the prime position right at their eye level. We’ve seen some of the following with our merchandising services – a category will be, for example, 70% National Brand, 30% Private Brand and it generates “x”. However, if retailers decide to focus on private brand by putting it in the center, they see increases in penetration from 30% to 40%, with sales and margins going up. Private Brand should lead rather than follow.

5. Product Availability

It may seem obvious, but I’ll say it anyway to underscore the importance: in order for your private brand to succeed, it is essential that the products actually be available on the shelves. Nothing loses a customer faster than not having items in stock. Who is overseeing your supply chain for your private brand? Private brand is different than a national brand and, because it is customized, it must be handed differently.

6. Packaging Design

Compelling and brand-consistent packaging is essential to generating strong sales. In addition to an interesting design to peak interest, be sure that the information on the label is communicating relevant details about the product the consumer is seeking. Private brand is the ideal place to get creative with your packaging design.

7. Employee Education and Enthusiasm

To build on brand loyalty, it is critical that your internal team of associates are living and breathing the values of the brand. To the extent to which your team models this passion and belief in the brand, this same devotion will be communicated to the customer. There is no better brand advocate than your own employees, and their enthusiasm can and will influence your customer’s choices while shopping.

8. Timing

When it comes to private brand planning, it is important to plan for a longer lead time and work further out than your normal category review process, since developing a robust private brand program will require more time. If you can’t, your program will likely struggle to adjust to the ever-changing consumer quickly.

Again, your private brand should lead rather than follow. By exploring these eight essential areas of private brand, retailers will be able to assess the current state of their private brand, and plan for an even more successful future with satisfied customers and strong sales.

What have been your experiences in building your company’s private brand? I would like to hear your thoughts and feedback — email me directly at JimH@daymon.com.