Trend Watch: Logistics and Transportation
2019 was a good year for private brands, and it followed another good year for store brands in 2018.
Market share for private brands continues to climb across the retail grocery segment. Market researcher IRI recently reported that private label sales have increased by nearly 4% in 2019, a number even more impressive when factoring in that sales of consumer packaged goods (CPG) increased by about 2%. IRI also reported that 99.9% of shoppers buy store brands today.
Dan Sanker, CEO of CaseStack, now a division of Oak Brook, Ill.-based Hub Group, believes that private label market share will keep climbing and that transportation and logistics will play key roles.
“Retailers are closest to consumers, and they’ll increasingly find ways to harvest data that enables them to outmaneuver big national brands,” says Sanker, whose company provides supply chain management services to consumer packaged goods companies, including for private brands. “To take advantage of this opportunity, private label manufacturers’ supply chains need to move even faster than national brands.”
Sanker believes that store brands will become the cornerstone in an ever-increasing competitive retail environment.
“These products are now a retailer’s differentiator, and cost is table stakes,” he adds. “This is another reason that retailers will need to always be in stock and on time while maintaining low logistics costs.”
Sanker says collaboration is crucial for retailers in the logistics and transportation process.
“Collaboration is the key for any brand and especially for private label,” says Sanker, whose company uses a proprietary software as a service platform for its collaborative retailer consolidation programs. “Retailers should collaborate to make sure that private label items have best-in-class supply chain management.
“When we at CaseStack collaborate with retailers to make logistics less expensive and more on-time for private label products, those improvements reflect well on the retailers. Preferred suppliers can then gain more physical and digital shelf space, leading to additional sales.”
In the digital sector, online grocery sales continue to climb higher — they have soared more than 15% on a year-over-year basis and now account for 6.3% of total grocery-related spending by U.S. households, according to Brick Meets Click, a firm that provides strategic guidance about how the U.S. grocery business is evolving.
Sanker says private brands offer retailers the chance to differentiate online.
“There’s an opening for private brands to become the tastemakers of retail, even more than national brands have been doing,” he says. “Logistics networks need to be low-cost, and they’ll have to be responsive, like the networks that have become prevalent in fast fashion.”
Sanker adds that CaseStack collaborates with retailers to make sure private label suppliers can out-compete their rivals by lowering costs of inbound logistics, reducing deductions and improving on-time delivery.
Sponsored content from CaseStack, a division of Hub Group, as featured in the December issue of Store Brands.