Keys to building a private brand management team
In a continuously disrupted landscape, many retailers are realizing the potential for private brands to not only improve margins, but to also attract customers, build baskets and drive loyalty. However, given retail’s traditional reliance on CPG companies to develop and cultivate brands, capabilities around true brand management are often limited.
Retailers leaning in on private brands would be wise to establish and elevate brand management capabilities to improve the likelihood of success of any private brand strategy by establishing a clear and coherent brand architecture, identifying white space opportunities, developing brand platforms, creating and launching product, and sustaining brand health over time. Retailers such as Target are recognizing this and establishing brand management teams to oversee the portfolio of private brands, define strategies and lead execution.
Picking the team
First, it’s critical to define your strategic objective. For example, at a macro level, what is the goal or relative prioritization across building equity, driving traffic or improving margin? At a category level, what are the goals within each category and how are they the same or different? Relative to competition, what do we observe and how should we differentiate ourselves? And most importantly, from the consumer lens, what are the unmet needs or tensions we hope to solve? Answering these questions will help inform the size, shape and skillsets of the brand management team you establish — as well as their goals and priorities.
When considering the team and governance model, it is vital to have one clear owner over brand management, ideally with competency or experience in marketing branded consumer products or services. The team should likely sit under marketing or merchandising, based on the company’s unique circumstances. More important than establishing a line of reporting is building out a broad cross-functional representation, including key partners across customer insights, product design and development, marketing, merchandising, supply chain, and strategy.
Brand management routines should be overseen by a steering committee including executive leadership from these functional areas.
Set up brand architecture
With a strategic objective, team and governance in place, the next order of business is to review the existing brand architecture. Chances are, over the years, private brands proliferated with positioning and that may have become less clear over time. The easiest way to do this would be to lay out the main categories or departments of the business and a basic tiering of “good, better, best” within each category or department.
Look for potential overlap and gaps, as brands may have drifted up, down, and on top of each other over time. Similarly, are there white spaces or opportunities? For example, Target’s review of its essentials portfolio, anchored by its Up&Up brand revealed inconsistency in positioning across categories, competing as a national-brand equivalent in some and an opening price point in others. Target has worked to clean this up and establish Up&Up consistently as a national-brand equivalent (or “better”) brand and launched Smartly to play as an opening price point (or “good”) brand. Similarly, Ever Spring was launched as a premium (or “best”) brand for many categories.
In addition to the visual check, it is important to have a consumer perspective informed view of the total portfolio? What is the relative brand health? Do consumers understand the roles for each brand the way they were intended? Is there consistency in positioning from their vantage point? How is the brand performing against key performance indicators such as sales growth, profitability, brand equity and net promoter scores? The answer to these questions should help make a clear decision whether to maintain, invest, reposition or sunset a brand.
Ready to launch
Once the brand architecture is cleaned up, the team can turn its attention to launching brands and developing innovation platforms. This requires adopting a stage-gate process under the oversight of the steering committee.
A stage could include roughly five stages: landscape analysis, brand development, product development, launch and sustain. This process should be applied to every category roughly annually. In landscape analysis, insights from the consumer, competitors and the current portfolio should be pulled together to assess how the current offering is performing, confirm changes to current brands, and identify white spaces.
The first gate should confirm the problem to solve. The second stage focuses on the creation of a brand identity and positioning. This includes a name, a brand identity, and product guidelines and guardrails. The third stage then dives into product development fully informed by the brand strategy and product guardrails. The specific approaches to product development vary by category, but should be iterative and tested with consumers as much as possible.
With the brand and product portfolio in place, the team is ready for launch. Unfortunately, most retailers (and CPGs) invest a great deal in launch and fail to follow up with support in years two and three. It is critical to commit to multiple years of support to ensure the long-term success of a launch.