Ready for retirement?
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No matter how much a retailer invests in developing and marketing a store brand, its never guaranteed success when that brand hits shelves. And if that brand fails to perform as expected, then the retailer-owner needs to know whether it simply needs tweaking – or needs to be laid to rest.
Private Label => Store Brands asked two brand-development experts – Ben Ball, senior vice president, Dechert-Hampe, Northbrook, Ill.; and Andres Siefken, chief marketing officer, Stamford, Conn.-based Daymon Worldwide – to weigh in on the topic.
Private Label => Store Brands: What steps should a retailer take to determine whether or not a store brand is ready for retirement?
Ben Ball: I should start by stating that I am not a big fan of \"retiring\" brands to begin with. The term \"retirement\" implies the brand has had a long life to begin with. If we use the term \"euthanize\" and broaden the discussion to include brands that never got going to begin with, this is a different discussion. Most [brands that companies attempt to launch] – store brands or otherwise – dont deserve to live very long.
One obvious scenario that does call for retiring a store brand is when it is a \"banner brand\" and the banner is discontinued. Store brands that have earned a following can almost always be transferred to a new banner.
The other scenario for retiring a brand could be when it is linked to a stereotype that becomes unacceptable. It isnt a store brand, but think Aunt Jemima.
It doesnt have to be ethnic, though. We almost did in Betty Crocker once until the agency came up with an update that resonated with women of the 80s.
Andres Siefken : The way we approach the decision to retire a brand at Daymon is by carefully analyzing its \"health\" in terms of how successful its been and by measuring key factors, including on-shelf velocity of key items within the brand portfolio, sales performance during consecutive periods of time and, most importantly, brand loyalty. There should be guardrails in place to help retailers assess brands as they mature, such as tracking quality, consumer relevancy and sales on a regular basis so its easier to determine when performance is declining and corrective action should be taken.
If careful investigation reveals that brand loyalty is completely lost, then a retailer has no other choice but to retire the brand. But before making a final decision, its imperative for retailers to take a deeper look at the situation from both the consumers and their own perspectives.
Retailers should try to understand how consumer perceptions have changed toward the ailing brand compared to when it was new and successful. For instance, why has product relevancy slipped? Is it no longer filling a need, or are there too many superior options available?
Retailers should ask themselves, \"How big is the brand in my store?\" and \"What impact, if any, is to be expected to category sales and/or my stores reputation?\"
The bottom line is brand loyalty. Even if a brand has passed maturity and sales are consistently declining, if theres still significant brand loyalty, there may be opportunities to re-energize the brand.
Whether its by re-inventing packaging, re-energizing the brand through new flavor line extensions or changing communications to ... raise awareness and more actively engage existing and new consumer targets, there are strategic ways to make a floundering brand new and exciting.
PLSB: When an own brand is ready for retirement, what must a retailer do to put it to rest properly?
Ball: Respect the brands fans and retire it with dignity. Let them know their venerable old favorite is being put to pasture and have a \"goodbye event.\" But dont just let it bleed to death on the shelf to run out packaging and inventory.
Siefken: The retailer must develop a comprehensive retirement plan, preferably in conjunction with both marketing and merchandising teams to ensure that all possible impacts on overall product category sales and the retailers reputation have been assessed.
A crucial part of that plan needs to be figuring out how to best avoid losing sales from the consumers of the retired brand by instead converting them to a new offering you either have or will soon introduce. The new offering or brand should actively build off the learnings gleaned from the retiring brand so the retailer can be sure of its ability to gain trust and relevancy in the marketplace.
PLSB: Conversely, what pitfalls should a retailer avoid when retiring a private brand?
Ball: Make sure the brands following has really dwindled to the extent you think it has. Sometimes \"stalled\" (what others might call \"stable\") brands are replaced simply because the management team is ready for something new. Again, assuming the brand has any sort of following, they are probably going to agree with me that it doesnt need to be retired to begin with. They will think that anything the \"new and improved\" replacement has could have been incorporated into the old brand to begin with.
Siefken: We see a lot of retailers around the world trying to bring smaller venture/control brands (those not directly linked to the stores) ... to satisfy a specific, perhaps short-term consumer need. When those brands are past the point of maturity, its best to not let them linger too long and instead pull them from the shelf as quickly as possible. If theyre not expanding sales and category sales, they dont deserve to be on shelf.
PLSB: Any other comments?
Ball: It is very, very hard to establish a brand with a true following. The mistake we make most often is underestimating how hard it is to launch a brand and then riding losers for too long. Any retailer lucky enough to have a brand old enough to warrant the term \"retirement\" should think three times before throwing granny over the cliff.
