Store Brand Success Formula
By Peter Berlinski

This year’s Store Brand Leadership Award recipients offer us valuable insights in how to develop and execute a world-class store brand program that enables their respective retail companies to enhance the profitability of their merchandise mix.

As we see it, the formula for success in a retailer’s store brand go-to-market strategy include five key ingredients that we have embraced to measure the performance of our Store Brand Leadership Award recipients. They include:

1. Product Innovation. Traditionally, mainstream retailers have positioned their respective store brands as product quality equivalents to the leading national brands in their trading areas. More recently, price-impact or economy brands have pushed their way to the forefront of the store brand mix in response to belt-tightening by consumers. These two store brand tiers clearly emphasize the price side of the price + quality = value equation in the consumer’s mind.

The ability of these two store brand tiers to build customer loyalty is only as strong as their price is low … and their quality is acceptable.

To build a rock-sold bond of customer loyalty to their store brands, retailers need to climb the ladder of product innovation and enter the land of premium quality. As Doug Palmer points out in this issue’s cover story: “For a store brand product to be considered premium at A&P, it must offer a unique attribute or it must represent the best quality in the category in which it resides.”

2. Packaging Design. It is interesting to note that all four retailers in this year’s class of our Store Brand Leadership Awards program are either currently implementing a comprehensive packaging redesign program or have recently done so.

The driving force is obvious. The battle to win the shopper’s heart and wallet is won on the shelf. Store brand label graphics must catch the consumer’s eye and compel her to pick up and try the product at hand.

3. Marketing. Notwithstanding the supremacy of packaging design, store brands need to be supported by comprehensive marketing campaigns that include advertising, promotional and in-store merchandising programs. A few time-tested marketing techniques include: on-pack and on-shelf Compare To signs, star treatment in weekly ad circulars, extra bonus points for purchases by loyalty card members, and in-store sampling of new product introductions.

4. Employee Involvement. Store associates serve as the frontline troops in the execution of the go-to-market strategy developed at headquarters. As such top management needs to develop their people assets as goodwill ambassadors who champion their store brand offerings to customers. To this end retailers need to implement formal store brand training and product information programs. Indeed, Shoppers Drug Mart has implemented a comprehensive certification program to train a designated employee in each store to explain SDM’s organic food program to customers.

5. Quality Assurance. Award-winning label designs are for naught if the quality promise outside is not delivered by the product quality inside. All first-class store brand products offer an on-pack Quality Assurance Guarantee. Many also employ on-pack Customer Toll-Free Hotlines, and on-pack Use By or Best By date codes.

We invite you to read the Leadership Award profiles in this issue to learn more about their winning ways.