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CHICAGO -- Retailers may be doing a bang-up job with their private label programs, but if they're not marketing these products, they won't get the true value these programs can deliver, according to Todd Maute, v.p. of Daymon Worldwide, who spoke during the company's biannual event last week.
"Over half of an average store's 30,000 SKU's are exactly the same," said Maute. "A national brand will come out with a new product, then the next brand, and the next, then private label versions of the product are launched."
To differentiate in a world of 500 cable channels and Tivo, supermarket operators must become marketers and innovators, and private label provides an opportunity to do just that. "Brands are defined by individuals, not by companies and markets," said Maute. "And private label is a powerful medium to carry your brand's message."
To emphasize this point, Maute explained that each product makes three impressions with the consumer who buys it: first at the shelf, where it is initially presented to them, then when it is purchased, and finally, when it is consumed. With 500 million private label products sold each year, that's 1.5 billion impressions made to the consumer. For a retailer to generate that many impressions using traditional advertising, it would cost more than $20 million. Since the retailer is in control of its own private label program, it presents a great opportunity for marketing the store's brand message.
"The store is a powerful medium for marketing," said Maute. "The total involvement of all the senses creates a complex complete experience that lingers."
Examples of successful strategies retailers have employed to leverage their private label include:
Design "quirkiness" and humor: Trader Joe's employs quirkiness to great effect -- "in a way that only Trader Joe's can pull off," noted Maute -- in its private label package design, such as it's Joe's O's cereal.
Licensing and borrowed equity: Examples of this included Kmart's successful Martha Stewart and Joe Boxer lines.
Design: Unique designed products can set off products from the competition.
Celebrity endorsements: Bob Vila's Craftsman endorsement is an example of closely aligning celebrity with a related private label brand.
Perimeter branding: This presents a tremendous branding opportunity, said Maute. "Retailers should put efforts into their perishables branding," he said. "They tend to have a halo effect on other areas of the store."
What's most important for retailers leveraging private label in their marketing efforts, said Maute, is that they focus on the consumer, remain true to their brand, be different, and market this point of difference.
-- Joseph Tarnowski