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Store brands get nimble

Retailers have made strong progress with their store brand portfolios in recent years, but many are zeroing in on some of the unintended consequences of the predominantly follow-the-leader era.

They’re moving, for example, to evaluate the SKU bloat that can result from going head-to-head with CPG companies in diverse products and categories, and they’re also working to make their store brands more visible online. (Historically, retailers have been quite responsive to major moves by CPG companies, but many were slower in their pursuit of digital progress for their store brands.)

What’s behind these changes? Epic events are forcing retailers to be reactive, proactive, creative and nimble. That means doing whatever it takes to strengthen your own brands, from adjusting your SKU mix and sources of supply, down to scrutinizing your pack size and visual and verbal identities.

Revisiting SKUs, Brands and Design
Over the past few months, we’ve seen a great many retailers start to get more serious about rationalizing SKUs in their store brand portfolios. It’s a response to major shifts in what people are buying. One exec at a manufacturer described nixing production on 70% of their regular SKUs to improve efficiency on behalf of retail customers. The goal was to stave off product shortages by churning out the most-popular store brands 24/7. Suddenly, all those ancillary, lower-margin items seemed way less important. 

In asking themselves how to respond to shifting consumer needs, retailers should also be rethinking their store brand portfolios. The goal should be to get even stronger by making sure that the overall mix of brands is fully optimized in response to market and consumer trends related to value, health-consciousness, sustainability and more.

From a creative and design standpoint, does your current approach build your brand, or are you delivering a functional message determined by supplier inputs? Now that you’re rethinking your features and benefits in response to shifting consumer trends, it’s important to make sure you convey these positive changes in creative ways on the pack, too.

Here are some further questions for your consideration:

  • Do you need the current depth with respect to product categories?; 
  • Are you developing — and eliminating — the right items based on consumer research into current trends? Let’s say your market research points to a rapid increase in plant-based diets and healthy eating overall. Once you have confidence in the longevity and importance of that trend to your portfolio, you know exactly what to prune — not just to add — in alignment with your master strategy; and 
  • From a methodological stand-point, how can you respond and react faster — for example, by taking full advantage of efficient approaches like design thinking and agile scrums? Can you be proactive and actually get ahead of the competition? 

Digital Focus 
In addition to looking at what people are buying right now, chains are thinking harder about how people have started shopping and the ways in which this could affect their store brands over the long term. For example, many discounters, grocers, home-improvement chains and other retailers continue to post massive increases in online sales.  

Habits forged over a two-year period are bound to persist. That means store brands need to ramp up their online and digital presence — something that is much easier to accomplish when you offer a tightly focused mix of brands and SKUs, with eye-catching and communicative design. 

An Opportunity for Progress
In business and in life, epic events force all of us to engage in honest reassessment. That’s precisely what’s happening today with many decision-makers at store brands. By fully embracing the challenge of being reactive, proactive, creative and nimble, you can position your store brand portfolio for current and future growth.

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Store brand industry veteran Todd Maute is a Partner at CBX, the New York-based brand strategy and design agency. He works with clients across multiple channels of trade including grocery, pharmaceutical, mass, pet specialty, consumer electronics, convenience, office, home improvement, warehouse clubs, and auto parts supply; [email protected]

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