Positioned To Sell

A little effort and creativity on the merchandising front can go a long way to boost store brand sales within the prepackaged lunchmeat space.

In today's typical supermarket, shoppers will find prepackaged lunchmeat in numerous varieties, styles and packages. Almost everyone appreciates the abundance of choices. But in the absence of effective merchandising, shoppers might have difficulty quickly locating the products they want — including store brand alternatives that typically represent a value in relation to the national brands.

But armed with the right merchandising and promotion strategies here, retailers could not only simplify the shopping experience, but also shine the spotlight on their own-brand items.

Location, location

When it comes to store brand product shelf placement within the packaged lunchmeat area, the jury is still out on what configuration works best.

"It's generally best to keep brands together," maintains Mark Russell, director of business management for West Liberty, Iowa-based West Liberty Foods. "Spreading them out and mixing them with competitive products will dilute the brand message and lead to poor visual appeal."

If a retailer wants to position its store brand as an equivalent to a certain national brand product, it should place the store brand item at eye level, he adds, next to or on top of the national brand item.

"Placing the store brand below the national brand will give the impression that it is a lesser or secondary option," Russell says.

Ben Ball, senior vice president with San Juan Capistrano, Calif.-based Dechert-Hampe Consulting, agrees that store brand items should be situated next to their branded counterparts — but he recommends organizing the department by product type.

"Merchandising private label — especially a non-banner brand — in a type, or segment, set next to the branded leader is the most effective strategy for store brands," he says. "If they have no branded segment counterparts in distribution, merchandise the store brand items together near the other 'specialty cuts' to get the maximum billboard effect for the brand," he suggests.

Grouping by product type does allow easy price comparison, notes Anne-Marie Roerink, a principal with San Antonio-based 210 Analytics LLC who also performs the research for the American Meat Institute's annual "Power of Meat" study. She adds that price remains an important motivator for product choice, especially when it comes to "switchers." And for organic products, the most common practice is to group all of such offerings together, she says.

And some retailers have opted for dual placement of prepackaged lunchmeats, in the "regular" lunchmeat department and in a separate area next to the service deli. Such a strategy has both advantages and disadvantages.

On the plus side, Russell says, retailers are able to target two distinct sets of consumers.

"In effect, it extends the hours your deli department can sell lunchmeat," he says.

And Roerink believes the strategy could optimize sales.

"There are definite advantages to casting a wider net and placing private label deli meats in two areas of the store," she says. "While some nine out of 10 stores feature deli areas, deli usage among most shoppers is occasional, at best, with more frequent usage of the regular lunchmeat area for routine purchases."

But retailers do end up with more SKUs to manage and maintain, Russell says, and such placement might dilute sales between the departments.

If a retailer does opt for dual placement, the area next to the deli should be reserved for premium prepackaged lunchmeats that are comparable in quality to those in the service deli, he adds, noting that service deli users expect high quality.

Ball agrees.

"Stay in the regular lunchmeat area with other packaged [lunch]meats," he advises, "unless you have a super-premium packaged store brand and you merchandise other premium packaged lunchmeats near the deli. Otherwise you cheapen the image of your deli and encourage trade-down — not a good thing."

Get creative in cross-merchandising

To really draw attention to store brand prepackaged lunchmeat, retailers could — and should — cross-merchandise the items with tried-and-true food product partners such as cheese and mayo. But they might want to also consider pairing them with items beyond those old-standbys to encourage new usages.

"Private label bread and bologna with mustard is boring," Ball stresses. "Try a premium sliced ham merchandised with fresh asparagus and a premium Italian dressing to promote upscale roll-ups for cocktail parties or summer entertaining."

And Alan Hiebert, education information specialist with the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA), notes that prepackaged deli meats were merchandised next to take-and-bake pizzas and pizza crusts at the IDDBA Show in New Orleans in June.

"Prepackaged deli meats can be a perfect topping for pizza," he says.

Store brand eggs make another potential partner, Hiebert says, as lunchmeats can be a perfect ingredient in omelets. And eggs already are one of the top-selling private label items in supermarkets, he adds.

Although they don't technically count as cross-merchandising, cooking demos present yet another option, Roerink says. For example, a retailer could hold a cooking demo in front of the deli to show shoppers how to prepare, say, a turkey and cheese wrap. It could display, on ice, all of the prepackaged lunchmeat and cheese right next to the demo station, along with recipe cards.

"[It's] a great way to showcase private brand offerings, capitalize on the power of sampling and offer an easy, healthy dinner solution," she says.

For retailers that do merchandise certain prepackaged lunchmeats next to the deli area, demos are critical to drawing new customers, Russell adds. Signage helps too, as lunchmeat shoppers could overlook this section.

Ponder promotions

In addition to merchandising efforts, the right promotional efforts can go a long way to build sales of prepackaged lunchmeats.

"Any price-based promotion is going to do well in today's environment," Roerink says. "In order to encourage trial and purchase, a coupon for a free package of deli meat along with the purchase of a nationally branded product can be powerful. Likewise, cross-promotions with other complementary private brand products tend to be successful."

But avoid "shadow" promotions — slashing the price of the store brand when the national brand is on promotion, Ball advises.

"You do not increase sales that way beyond whatever bump you are going to get from the national brand activity," he says. "You only trade down the margin for the entire category."

Consumers who buy store brand products for price are going to buy them regardless of the gap, Ball maintains.

"Don't unnecessarily increase [price] just because the store next door has their store brand price cheaper than yours," he adds. "People buying store brand on value — same quality but a lower price — are more persuaded by the 'same quality' than the 'lower price.' These are the folks grocers can delight with a truly high-quality product at a reasonable value."