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03/13/2015

Listen internally, externally to drive store brand success

It takes time to develop a successful store brand program. But listening both internally and externally can help retailers develop a successful private brand program a lot faster, said Sean Thompson, senior director of private brands for Dallas-based 7-Eleven Inc., during his Feb. 26 presentation at Store Brands' 2015 Innovation & Marketing Summit, held in Rosemont, Ill. It’s this kind of listening that has helped 7-Eleven develop what now is its largest innovation product pipeline ever — and position itself to launch almost 200 store brand SKUs in 2015.

Take an internal approach

In terms of internal listening, Thompson noted that when his team began developing its innovation pipeline, he approached 7-Eleven  in Japan, which is renowned for its private brand products, seeking to understand what private brands mean in Japan, how 7-Eleven develops them, and how they are different from the store brands at 7-Eleven outlets in the United States. He was astonished by how the company constantly invents and rolls out new items, focusing on everything from product quality to even the amount of space items take on shelf (as real estate in Japan is very expensive).

One particularly unique item he pointed out is the rice ball. Not commonly found in stores or restaurants, the rice ball traditionally is made at home, typically wrapped in seaweed and containing fish, plum or another filling.

“So here is this concept that people were making at home,” he said, “[and] they wanted to bring out to the public. … And this quickly became one of their most successful items,” selling about 2.4 million rice balls a day across the country.

And it wasn’t enough to bring the product to market — 7-Eleven in Japan continued refining it post-launch, Thompson added.

“What’s really crazy is that they will alter this several times a year,” he said, noting that the company modiies packaging to make it easier to open, makeit consumable without having to touch it directly, create unique fillings and more.

Go outside

As for external listening, Thompson — when he was still somewhat new to 7-Eleven and private label — said he began calling U.S. and Canadian retailers across various channels to learn best practices for developing a great team structure, creating and executing a recipe for success, and more.

“They were really willing to share,” he stated.

His team also traveled to various cities across the country to speak with thousands of customers to learn what 7-Eleven does well — and not so well — in the store brand sector. The tean learned that customers have a huge level of trust for 7-Eleven and its private brands, Thompson noted. It also learned that store brand packaging rated well compared to competing brands.

However, store brand products needed to work harder at “breaking through,” Thompson explained. By listening to what shoppers said, his team discovered that 7-Eleven’s brands needed to be more relevant to women and millennials.

Responding in two categories of opportunity, 7-Eleven developed the 7-Select Go Smart! Brand for better-for-you items and the 7-Select Go Yum! Brand for premium, indulgent products. An interesting example of customer-centric product development here is the latter brand’s sea salt caramels: Thompson’s team, understanding that 7-Eleven patrons tend to have a “saltier palate” than others, specified to its manufacturer partner that it wanted the chocolate-covered caramels to be topped with “just a little bit more salt” than usual.

“It’s really, really important for us to understand customer needs, stay close to the customer, figure out how to get the stuff displayed right in stores, how [to] get people in the know, and literally to create packaging that can speak to the quality of the product,” he stated.