By Christopher A. Durham: President & Chief Strategist, My Private Brand
Largest Worldwide Private Brand Competition is Changing Retail Owned Brand Design
Almost three years ago, the publisher of this magazine, Phillip Russo, and I sat in a little café in Amsterdam, discussing our publications, the opportunities for Private Brands, and PLMA’s World of Private Label international trade show we had just attended. A few drinks and a good cigar later, we had a handful of off-the-wall ideas we truly believed could change private brand. That conversation was the spark that ignited the Vertex Awards. And now, two years after its inception, the Vertex Awards are the largest worldwide competition devoted exclusively to the art of Private Brand package design. More than simply size, it has become a catalyst for change and opened the eyes of the world to the depth and breadth of Private Brand’s potential globally.
Private label is booming, and with the slow pace of economic recovery, we can expect this to continue for some time. Consumer habits – including having ‘downtraded’ to private label during tough financial times – are now ingrained. It’s unlikely that national brands will ever recover that lost ground.
This perfect storm is creating increasing opportunities for private label. This is good news for private label manufacturers and for the retailers because the direction of travel for private label is in trading-up consumers: and in so doing, retaining consumer loyalty while increasing prices to national brand levels.
My expectation is that at PLMA in May, manufacturers will be talking more about premium products, leading in product innovation and delivery of segmented, niche solutions for targeted markets. If not, then they are missing the economic opportunity of the whole generation. Manufacturers, take note: now is the chance to shift your business from being price driven to being value driven.
Segmenting shoppers who are most inclined to buy
By Perry Seelert, Co-Founder and Strategic Partner, Emerge
By Vasco Brinca, Senior Vice President, EMEA LA, Daymon Worldwide
Western Europe is well established as a Private Brand leader with the majority of EU-based consumers showing strong trust in Private Brands as good alternatives to leading brands. As Private Brand pioneers, Daymon Worldwide has long-encouraged our retailer and supplier partners around the world to treat their Private Brands as viable brands in their own right versus price-based alternatives to name brands.
Yet as consumer acceptance of Private Brands grows, particularly in the EU, a new battle is emerging as big retailers must now compete with the increasing proliferation of discounters for share of wallet. Aldi in the UK, for example, has captured enough share of the market to become the 6th largest grocer in the country, surpassing Waitrose.
Considering that leading brands in the marketplace can afford to significantly reduce their prices for special occasions or promotion periods, it’s important to note that building loyalty around the lowest price is not a strategic or sustainable means to combat discounters.
As retailers strategize how to keep their Private Brands relevant against discounter competition, we recommend the following considerations as a means to elevate offerings as “can’t get anywhere else” options.
By / Bruce Levinson, Vice President, Client Engagement at SGK
