From the Summit: A Roadmap to Store Brands Success

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July 20, 2011

By Laura Heller

SBD Exclusive from the Innovation & Marketing Summit

Editor's Note: Stay tuned for more in-depth coverage over the next several weeks of the dynamic speakers and strategic topics discussed at the Store Brands Decisions Innovation & Marketing Summit.

Day two of the Store Brands Decisions Innovation & Marketing Summit began with new research from the Food Marketing Institute and Kantar Retail that identified opportunistic areas for deeper collaboration between store brands trading partners.

John Failla, founder and president of  Store Brands Decisions

There’s a need for more consumer-driven insights and commitment to product safety and quality, according to Patrick Walsh, senior vice president of industry relations of the grocery trade association, noting that there’s also a notable gap in priorities. Retailers ranked innovation as their number one priority, which did not even appear on manufacturers' top five list. Consumer insights topped the list for manufacturers, with that priority ranking number four in importance to retailers.

At the heart of  true partnership is trust, which minimizes the knee-jerk reaction of pushing back on funding responsibility for joint endeavors such as research, innovation and new product development. A panel of industry executives explored these topics, and while all agreed on the core issues, each reinforced their point of view of why the partnership gap remains wide in certain areas.

Collaboration panel from left to right: Edward Salzano, LiDestri Food & Beverage; Ryan Briggs, Supervalu; Kevin Hunt, Ralcorp Holdings; and Patrick Walsh, FMI.

One way retailers and manufacturers are joining forces for a common purpose is through the Global Packaging Project, a consortium formed to create common language and standards around sustainable packaging. Results of this two-year project will be published soon, according to Kim Lymn of Target Corp., and Roger Zellner of Kraft Foods, who is also co-chair of the project.

Erin Young, associate principal of McKinsey & Co. provided attendees with a roadmap to achieve a successful store brand strategy. There is no single organizational structure that lends itself to store brands success, Young said, but rather variations based on goals and timelines. One thing is certain, the growth of store brands depends on the dedication of top leadership, the development of teams devoted to new products and a store brands strategy, and the authority to implement across categories and throughout the organization, according to Young.

John Seal, Burke Inc.

Customer segmentation can help develop a store brands strategy beyond basic value positioning. John Seal, senior vice president of Burke Inc., outlined the many ways shoppers can be grouped around store brands purchasing patterns, behaviors and attitudes, but echoed Young’s advice that knowledge is a waste of research dollars without an implementation plan.

“Understanding your customers does not lead to action; often research is but a door stop, a big heavy binder of results that never gets used,” Seal said. “Be intentional about what is on your shelf and who it is for.”

Matt Egol, Booz & Company

There’s also change afoot in the marketing world with the word “shopper” slowly replacing “consumer,” said Matt Egol of Booz & Company. “There’s an evolution in shopper marketing occurring that’s really important to follow -- the shopper is different than the consumer.

Even when it’s the same person, there’s a different mindset when they’re in shopping mode.” CPG companies are investing heavily in shopper insights and tailoring marketing to the results. Store brands and retailers are in a unique position to use these insights to position and promote store brands in new and powerful ways, said Egol.

• 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

The industry often looks to Europe as a shining example of private label success and where retailers are more consistently using store names, or banners, on private label products to create greater branding and marketing impact. European retailers like Jumbo are even changing existing labels to store names, and improving sales in the process, according to Koen de Jong, founder and CEO of consultancy IPLC.

Switching gears to the fast-growing health and wellness category, afternoon presenter Thom Blischok, president of global innovation and strategy for SymphonyIRI Group said, “Affordable wellness represents a $300 billion opportunity for store brands,” noting he predicts private label household penetration in the category will be 35 percent in the next five years as consumer continue to be financially pressured and search for value-oriented ways to manage their health.

The closing retailer panel from left to right: John Failla, Store Brands Decisions; Katherine Lenhoff, Loblaw; Kurt Denman, OfficeMax; and Maurice Markey, Sam's Club.

Those same customers will increasingly engage with brands on Facebook and other social networking sites. “We believe social media has the potential to be the great equalizer for store brands in the battle to increase share over national brands,” said Store Brands Decisions Founder and President, John Failla. To that end, Reggie Bradford, CEO of Vitrue, explained how retailers and manufacturers can market and manage their brands in the world of social media. “People spend more time on Facebook than on MSN, Yahoo! and Google combined,” Bradford said. “You need to sit up and pay attention,” noting that national brands are using social media to interact with customers globally and tailor messaging to local audiences.

It was a day of insights, data and new ideas but putting them into play is a challenge, as the final panel of the day made clear. Loblaw’s Katherine Lenhoff, Kurt Denman of OfficeMax and Sam’s Club’s Maurice Markey voiced their frustrations with some of the structural limitations within their own organizations, the need to deliver clearly defined brands to customers, and engage with new media to drive sales and shopper loyalty. But Lenhoff was quick to note that “all of those challenges are really opportunities.”

Read These Related Articles:

• Google: Marketing Store Brands Online
• From the Summit: Building Shopper Centric Store Brands Models
• Live Blog Day 1 from the Innovation & Marketing Summit
• Social Media to Expand Reach of the Innovation & Marketing Summit
• Blending the Best of CPG and Retail to Achieve Store Brands Innovation

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