PLMA 2022: The Six Dimensions of Price-Value Image
During one of the opening seminars at PLMA’s 2022 Trade Show, Jon Hauptman, president of Price Dimensions LLC, detailed the need for retailers to have a strong “price-value image.”
Hauptman outlined the “six dimensions” of price-value image during his speech, titled Should I Stay or Should I Go, which focused on the best private brand pricing methods that will attract and retain shoppers. With food and beverage inflation still high heading into the holiday season, speakers at the PLMA show stressed that private label assortments will remain key next year.
Hauptman named the six dimensions of price-value image as everyday base prices, promotional offers, known-value item prices, value assortments, merchandising and price communication.
“A retailer needs to have strength in each of the six dimensions,” said Hauptman. “Think of it like a six-link chain. Weakness in only one link of the chain compromises the integrity of the whole."
He called everyday base prices and promotional offerings the “no-brainers” for retailers when it comes to attracting customers through private label.
“Value three, known-value item prices, is the recognition that there’s a subset of items in every store that disproportionately impact price image,” said Hauptman. “These are the items that shoppers are most likely to know the prices of. However, getting there and determining what these known-value items (KVI) are is the trick. Any great KVI portfolio needs to have representation across the store. Where the puck is headed at retail is personalized KVI’s… where I know as a retailer what’s most important to you and your household and what drives you to the store, so I can send you special discounts.”
Hauptman called value four, value assortment, the most important of the six to those attending PLMA’s 2022 Trade Show. He said that having options in every category that shoppers can trade to is critical for those looking to stretch their shopping budget.
“Typically, that is done through store brands, increasingly those price-point store brands,” said Hauptman. “Whether or not they do trade is secondary. Shoppers are more comfortable going to stores where they have options to stretch their budget. The one thing that’s interesting here is that everybody is a value shopper in one category or another. However, there’s no consistency between households demographically in which categories you would be willing to make a trade to store brands. It’s important to have it available so that any customer can come into the store and see that ‘there are options for me to trade to, I don’t have to go elsewhere.’”
Finally, Hauptman touched on the final two dimensions, merchandising and price communication, which he described as the two that “take the credit” for the other four dimensions.
“These are critically important. Retailers are defining through their marketing themes what savings means in their store, and it very often includes their store brands,” he said. “Having strength in all of the six dimensions is about removing barriers that shoppers have to want to shop at one store or another."