From the Summit: Building Shopper Centric Store Brands Models

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July 19, 2011

Joe Ennen

It was a day filled with insights, buzzwords and even warnings to the private label industry as the Store Brands Decisions Innovation & Marketing Summit kicked off in Chicago. Roughly 250 industry executives gathered at the Intercontinental Hotel to discuss the critical role store brands play and the opportunities and challenges that lie ahead to advance innovation and marketing.

Store brands market share and acceptance is growing, but still has a ways to go. According to Safeway’s Joe Ennen, senior vice president, consumer brands, nearly 70 percent of shoppers say private label products are as good, or better than national brands, but store brands comprise just 23.5 percent sales. "This gap must be bridged," Ennen said in the opening session,  with a renewed dedication to innovation, commitment to quality products, consistency across all brands and categories, and better alignment with manufacturers to build brands.

Too often, there’s a disconnect, or “de-coupling,” between the retail banner and its store brands, resulting in inferior products that hurts the entire industry. “One bad experience with a private label can kill opportunities for all retailers,” said Ennen. “Not just for that category, but for all categories.”

Sohrab Vossoughi

Packaging plays no small role in the success. Sohrab Vossoughi, founder and CEO of Ziba Design, outlined ways store brands can improve presentation to better stand out and add value for the consumer from the point of purchase to the end of the product’s lifecycle. Simply redesigning Costco’s Kirkland Signature moisturizing soap and packaging increased sales 200 percent, he said.

Dan Hill, president of Sensory Logic Inc., discussed the many ways consumers connect to products, with logic ranking below emotions. Knowing how your customers feel about a product can mean the difference between success and failure. Eye tracking identifies what consumers are looking at, in which order and at what intensity, while facial coding shows their emotions. The levels of emotion can even tell a CPG or retailer what price to charge: a focus on price forces rational evaluation, ultimately disappointing the customer. But the feeling of joy causes concern about price to disappear, allowing retailers to actually charge more for store brands than anticipated.

Martin Cregg

Store design was the topic for Martin Cregg, president of ChaseDesign, who warned that the rise in electronic shopping is forcing retailers to scale back new formats. These much smaller stores are reducing SKUs or eliminating product categories altogether. The challenge for private label will be competing online as shoppers take to mobile commerce, he said. The consumer is shopping online with greater frequency. “Make sure your brands are there too,” said Cregg.

This message continued as Catherine Roe, head of CPG at Google closed the final session. Consumer interaction and time spent online is growing fast. The number of users engaging in mobile commerce is expected to double, from five billion to 10 billion globally in 2020. “There is a new path to purchase,” she said. “Store brands aren’t super active in this space and it’s a huge opportunity.”

• Participate in the only industry event focused entirely on store brands innovation and marketing. The 2012 edition of the Innovation & Marketing Summit will be March 12-13, 2012 in Chicago. To receive updates CLICK HERE

Shoppers are now more likely to encounter a product online for the first time, rather than the store shelf. The average consumer spends one hour on research before going to the store, and purchase decisions are made before leaving home. Store brands need to be on the virtual shelf to be considered, showing up in price comparisons and searches in addition to using integrated online marketing to drive awareness, she said.

As the Store Brands Decisions Innovation & Marketing Summit ended its first day, a clear message emerged -- for the industry to reach its potential, investment in innovation must be made, consistency and quality must be rigorously adhered to, and an online strategy devised. -- By Laura Heller

Read These Related Articles:

• Live Blog Day 2 from the Innovation & Marketing Summit
• From the Summit: A Roadmap to Store Brands Success
• Social Media to Expand Reach of the Innovation & Marketing Summit
• Live Blog Day 1 from the Innovation & Marketing Summit
• Blending the Best of CPG and Retail to Achieve Store Brands Innovation

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