PRIVATE LABELS AS BAER DESIGN GROUP SEES IT

In ACNielsen’s recent study of consumers’ budget-balancing tactics, 42% of those polled included “switching to grocery private labels.”

While the boon of the in-house brands continues to grow exponentially (both in consumer and retailer response), Frank Mayes, a seasoned private-label consultant, notes that important trends are happening inside this growing industry that shouldn’t be ignored, lest one rush in like a fool after gold.

He tops his lists with improvement of quality, increase in upscale products and innovations and, as we discussed last week, marketing-oriented brand names and packaging designs. He also notes that shorter packaging runs are now economically feasible bringing in many more vendors than before. This last observation opens up the door to the smaller retailer.   

When asked what kind of retailer should consider private label, he begins by

saying, “It’s hard to imagine any retailer who should not. The concept of “wedding” the consumer to the store demands private label, as does the fact of extra profitability.”

But upon further questioning, Mayes urges careful consideration for quantity. Over-estimating invites problems of product obsolescence, which will kill the return on your investment.

However, as mentioned earlier, since vendors are offering a variety of products stretching well beyond the safe basics (bread, milk, eggs, etc), accommodatingly shippable quantities have ensued. Always the proponent of the design element, Mayes emphasizes that, “A packaging designer who understands this can help develop formats that are adaptable to economic packaging runs.”

But to those operating under that mark, several options are recommended. For starters, consider tying into your wholesaler’s private-label. Or, if you happen to

be upscale, you can go with a program of “ultimate quality” that eschews low price as a selling point. Of course now - with the right research - there is no reason to not opt for creating your own program.

In any of these cases, you must rudder the project with a clear understanding of who you are targeting so as to tailor the product, product assortment, and packaging design to that audience. As Mayes says, “The consumer expects that the private-label product will be at least as good as the product he/she normally purchases, perhaps even better – and at a saving. The packaging must communicate this rapidly.”

Next week, we’ll discuss the importance of first assessing how to position your brand, before you move forward with the design that will, in effect, “communicate this rapidly.”