All Together Now
Marketing store brand products on a limited budget requires creativity and hard work. But retailers that engage the help of their supplier partners here could up the odds for success.
In an industry roundtable held during the Private Label Manufacturers Association’s 2013 Private Label Trade Show in November, Private Label ⇨ Store Brands sat down with retailers and private label manufacturers to talk about how they could find ways to work together to build engaging and cost-effective marketing programs for store brand products.
Our roundtable participants included Mark Coleman, vice president of retail sales, Catania-Spagna Corp., Ayers, Mass.; Jason Dobis, director of retail sales, J.R. Simplot Co., Boise, Idaho; Tim Erceg, purchasing specialist, Hy-Vee Inc., West Des Moines, Iowa; Fernando Gallego, national sales manager, Golden Gate Paper Co., Calexico, Calif.; Anna Kaplan, director, private brands, Katz Group Canada Ltd./Rexall, Mississauga, Ontario; Andy Nielsen, assistant vice president, Hy-Vee; Thomas Reali, senior director, own brands, the Great Atlantic & Pacific Tea Company Inc. (A&P), Montvale, N.J.; Beth Richman, vice president, sales, Albaad USA, Reidsville, N.C.; and Linda Whiteside, category manager, AWG Brands, Associated Wholesale Grocers (AWG), Kansas City, Kan.
We share with you here some very limited highlights from the hour-long roundtable.
Not without challenges
On the product marketing front, tight budgets remain a retailer obstacle.
“We don’t have the funding or the budget to go after it the way we would like to,” Reali said.
But limited funds certainly encourage creativity here. Reali noted that A&P has been engaging in some inexpensive social media efforts to market store brands. The company also has been working with a handful of branded suppliers on buy-one-get-one-free promotions to spur store brand product trial.
“In the month of December, we have five programs where we are giving free product on private label based on the manufacturer’s dime,” Reali said.
Hy-Vee is fortunate enough to remain in a growth mode — and that growth means larger budgets to market its own brands, Nielsen said.
“Private brand is a big part of our company,” he added.
But key to the retailer’s store brand-related marketing efforts is an educational process that begins with top management and filters downward into the stores, Erceg noted.
“We continue every day, weekly, monthly to make sure that the stores understand [the brands and products],” he said. “It’s very important for Hy-Vee.”
And Rexall recently launched brands that surpass national brand equivalents in terms of quality, so the marketing challenge for the company relates to communicating the products’ benefits, Kaplan explained. The retailer did publish a few standalone publications related to the new products, but is still looking to enhance efforts here.
“That’s the main challenge: How to communicate to consumers that these new products are actually better than the national brands,” she said. “It’s definitely an ongoing process.”
As a retailer-owned cooperative, AWG is in a unique situation on the private brands side in that it cannot tell its retailer members what to do, Whiteside said. But the company can ease the way for its retailer members here.
A few of the ways AWG does so is by operating a website dedicated to AWG Brands, hosting a mommy blog (where bloggers try and weigh in on specific private brand products) and making a commitment to packaging that portrays the high quality of the product inside it, she said.
“We have our products on a review … kind of a five-year cycle for the lifetime of the package, so that gets redesigned and stays current and stays relevant to what’s going on in that category,” Whiteside said.
Many suppliers are willing to pitch in where they can to help retailers market their store brand products. But the definition of partnership has to change if they are to do so with success, Dobis explained.
“A lot of retailers out there have online bids for private label and things like that,” he said. “That takes away from the collaborative efforts that we can put forward with retailers.”
“And to jump on that,” he said, “I think the more transparent we become as a manufacturer, the [greater] level of trust we [can attain] with our retailers to partner with them and discuss ideas and whatnot.”
Everyone talks about innovation in terms of products, Dobis said. But innovation also can be applied to merchandising — which is a critical part of product marketing.
“I think, as a manufacturer, we need to bring to retailers … innovative ideas,” he added.
Speaking of merchandising, Richman says that Albaad is able to work with retailers on bonus packs and retail-ready packaging, as well as to cross-merchandise private brand feminine care items used at different times of the month.
“If we can get the product into the customers’ hands, then they will come back for the repeat purchase because the product quality is there,” she added.
Coleman pointed to a program his company worked on that placed store brand Italian dipping oil right next to the retailer’s crusty bread section.
“The person buying that’s spending four bucks or five bucks for a loaf of crusty bread is the same person buying the Italian dipping oil. So why miss that impulse?”
Packaging, too, can serve as a marketing tool in that it can differentiate the retailer’s products from others on the shelf. And suppliers can be invaluable here, Gallegos suggested. For example, his company recently designed a toilet tissue offering to have 300 sheets (versus the competitor’s 264), but made the sheets themselves smaller.
“So the customer looks at the package and sees 300 versus 264, even though the square footage is the same,” he said.
‘A lot of retailers out there have online bids for private label and things like that. That takes away from the collaborative efforts that we can put forward with retailers.’
— Jason Dobis, director of retail sales, J.R. Simplot Co.