Here’s the thing about the retail industry: As much as you’d like to believe that your store is different from the one across the street, it's really the same — at least when it comes to branded selection. So much so that up to 98 percent of stores’ branded item assortment is also carried by the competition.
According to Daymon research, private brands currently average 9 percent of available items and 20 percent of total sales. If we look at growth over the past couple of years across the industry, within that 98 percent assortment, we've seen the biggest gains from tertiary brands, not A brands or private brands. One of the more interesting findings was that private brand uniqueness has a higher correlation with loyalty than national brand uniqueness. And just last month, we saw that year-over-year sales trends for private brands have spun back positive.
Given all of these factors, we're left to ask: If product selection isn’t at the top of your list to help differentiate yourself from your competition, what else are you doing to keep shoppers coming back?
Shoppers today are looking for ways to be disloyal. They aren’t interested in seeing the same thing — they're demanding better service, selection and experience. It’s up to you to prove to shoppers that you deserve their loyalty. There’s a wealth of possibilities across the store, and it starts with your own brand. Here are a few thoughts on how to make the most of this retail climate:
- Use targeted analytics to optimize category management and merchandising at national and regional levels.
- Take back control of store shelves to give consumers a better, more targeted shopping experience by using a dedicated in-store execution model.
- Use the new label requirements as an opportunity to redesign packaging to educate and inform consumers.
- Leverage all elements of packaging — from the design to the packaging itself — to communicate your story authentically and create a connection with shoppers.
- Continuously scan the globe for long-term strategic sourcing hot spots.
- Turn associates into brand advocates to tap into the power of personal recommendations and word-of-mouth marketing for private brands right at the point of purchase.
- Make your store a destination rather than a distribution point for national brands through in-store engagements that are unique and ownable.
Data is coming at us from every direction. It’s important to remember that at the end of the day we're trying to connect to human beings. What people will remember most about their shopping experience is how they felt at the end of it, so give them an experience to remember. Teach them how to cook an entire meal with your branded ingredients, make the store layout convenient, and create meaningful experiences for shoppers that will help them connect with the product and understand how they can incorporate it into their everyday lives.
When the human aspect is addressed, you’ll be able to achieve what you need to grow your business: faster speed to shelf, more productive categories that drive sales and margins, higher service levels and fewer out-of-stocks, and higher shopper likability scores for the in-store experience.
Jim Holbrook is CEO and a member of the board of directors of Daymon, a company dedicated to building successful private brands and delivering high-impact experiential consumer marketing and in-store services.