Consumer Insights are the Key to Store Brand Innovation

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July 8, 2009

By Maureen Azzato

The store brands world must do a better job of understanding the consumer so it can deliver more products consumers want that will make their lives more convenient and easy, according to Andres Siefken of Daymon Worldwide, a store brands broker.

When used correctly, private brands can be an important strategic weapon for retailers to win on all fronts with the consumer, said Siefken in his presentation at the recent Food Marketing Institute Private Brands Summit in New York.

"I see many presidents, vice presidents, CEOs and owners in the audience, and I have very, very bad news for your today. You are not the boss of private label anymore. The boss of private label is the consumer," said Siefken, vice president of marketing and consumer insights for private brands broker Daymon Worldwide Inc., based in Stamford Conn.

He asked the audience if they believed they understood the consumer as well as consumer packaged goods companies such as Procter & Gamble. "Most likely the answer is no, but what are we going to do about it?"

In order to truly connect with consumers, he said retailers and suppliers must better understand the consumer mindset. As a starting point, Siefken outlined four key mega trends driving consumer behavior, which he said were not evident before the recession.

• Survivalism: Many consumers are thinking about and anticipating the worst and "are going to stores and stockpiling," Siefken said.
• Trading down: Consumers are trading down, but not necessarily only on price. "They could be going from national brands to premium private label," he added.
• Cocooning: Picking back up on a trend of the late ‘90s, consumers are saving money by spending more time at home with their families, eating at home and watching more television.
• Consumers want to live better on less. "No one wants to trade down on lifestyle. Many people are looking for new products and alternatives to continue living their lifestyles, while also saving some money," he said.

Value doesn't mean the same to everyone, Siefken said, adding that for some it is price, while for others it is the ratio between quality and price or product benefits and price. Retailers focused on these nuances are realizing significant success using fundamental brand building practices.

Harris Teeter, for example, has developed "consumer targeted brands where each brand in the portfolio connects with specific shoppers," Siefken said. Others, such as Wegmans Food Markets in Rochester, N.Y., are category management focused and have set the objective of being the number one or number two brand in every category.

Retailers winning with private brands are also merchandising and marketing their brands more aggressively, including using advertising, in-store media, social media and better store placement of their brands on endcaps and other high-impact zones.

"CPG brands are not the only advertised brands anymore," Seifken said. "It is in our hands to make sure that private brands now become the brand of choice to consumers. We need to make sure we innovate and put the right products on the shelf and let the consumer decide."

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