Compared to a decade ago, when most retailers still were emulating the national brands, the strategy behind the creation of store brands has changed dramatically, according to George Miketa, executive vice president, sales for Minneapolis-based Snacks Holdings Co. In a May 1 panel discussion (moderated by Progressive Grocer’s Store Brands’ publisher, Steven Lichtenstein) at the Food Marketing Institute’s (FMI) 2012 Private Brands Summit, held in conjunction with the FMI Show in Dallas, he said retailers now are looking for differentiation to create loyalty.
“Private brands are no longer the low-cost solution at the shelf,” added panelist Laura Sturdevant, director, product development – private brands for the Deerfield, Ill.-based Walgreen Co. “You’re going to hear about differentiation a lot today; that’s what every retailer wants.”
But the differentiation so many retailers desire calls for a much more strategic — and collaborative — approach to product development, as well as to branding and design, said panelist Todd Maute, partner at CBX, New York. The products must connect emotionally with consumers if they are to be a success, he added, noting that CBX is starting to see retailers and manufacturers looking at packaging innovations as another way to differentiate.
And collaboration for private brand differentiation really starts with a commitment to co-creation by all parties involved, Miketa said.
“Why not get the retailer involved from the start?” he suggested.
For its part, Walgreens now relies on external partners and agencies to get critical insights related to consumer wants and needs, Sturdevant said. Such insights will be even more important for differentiation going forward.
“We want to be pushed; we want to be pulled at the same time,” she said.
Collaboration between the retailer, the manufacturer and the branding/design firm during the product development and launch process is important, but Maute noted that the work doesn’t end at launch. A collaborative approach also can involve all the parties in the development of merchandising and marketing strategies — and evaluation of the results.
Ultimately, collaboration in the name of store brand differentiation works best when every person’s role and responsibilities are well-defined, Maute noted.
And clear communication is critical.
“It all starts with communication,” Miketa stressed.