This is the first of a three-part installment on improving Private Label Strategy.
In 1987, Loblaw Companies Limited (LCL) launched its private label President’s Choice ‘The Decadent Chocolate Chip Cookie’, which was developed for the adult palate and made with real butter and real chocolate chips. The Decadent Cookie was developed from a consumer-centric point of view, well ahead of its time. Available in only 20% of Canadian grocery stores, it had grown to be the #1 cookie in Canada in 1990.
Since then, LCL has continued to have success in the private brand sphere. How have they been able to reach and sustain this level of success? LCL has built their tiered private brand strategy from a customer–centric point of view that used 3 critical pillars: brand vision, sourcing and category management. We examine the first pillar below.
What Brand Vision Works Best?
Without a clearly articulated vision for each tier within a private label strategy, you can’t win. This vision must start from a consumer-centric point of view that ensures that the product meets certain emotional or functional benefits that have been identified as those the consumer wants. The brand vision needs to be simple, obvious and easily understood by consumers. When developing products within each tier, you must ensure that all facets of the product meet your defined criteria. For example:
- Our store brand is equivalent to the national brand at a price that is lower by at least 25%.
- Our premium brand consists of products that are unique within a category, at a price point that is equal to national brands.
- Our health brand has a maximum of 10% of your daily fat, 5% of your daily cholesterol and sodium, and no artificial ingredients—all put together in environmentally friendly packaging.
Use Packaging To Communicate Your Brand Vision
Every aspect of your product must match the brand vision. For LCL, President’s Choice is their premium brand. The Decadent Cookie used premium ingredients to create a unique, higher end product. In addition to being made with real chocolate chips, the Decadent cookie had almost 40% more chocolate chips than the leading brand, a fact that was clearly communicated to the consumer through premium packaging with mouthwatering pictures of the product.
Packaging also helps to distinguish branded products and communicate each brand vision to the consumer. LCL recently created an ultra-premium private label line of products under their ‘Black Label‘, with all products from different categories having the same look and feel. This communicated to customers that these products were best in class within each category. In addition to being ultra-premium, these products were designed with gourmet cooks in mind. Products like Porcini Mushroom Glaze and Pumpkin filled Triangoli appeal to gourmet cooks as well as those aspiring to go beyond a simple Tuesday night pasta dinner.
Train Staff To Understand Multi-Tiered Strategy
Operationally, your private label brand vision has to be brought to life in-store, so your employees must be trained on the multi-tiered strategy. If they can’t tell your private label story back to you, then you have not clearly communicated the brand vision to them. When taken to the next level, staff training could also require that staff take customers to an aisle to increase the possibility of a private label sale. The best staff training turns staff into brand ambassadors by allowing them to try many of the products. Like a good waiter, staff who will espouse the benefits of their favourite products while taking customers to the shelf are your best salesmen.
Leverage Digital, Traditional, and In-Store Customer Touchpoints
Many merchants do not leverage tools at their disposal to communicate their private label vision to consumers. Your in-store signage, website, flyers and social media platforms must support the private label brand vision. One of the best tools for driving private label sales is with a merchant’s loyalty program. By offering greater consumer incentives for private label purchases and following up interactions with a call to action, you’re guiding existing—and already brand aware—customers down the sales funnel. Of course, if the products were developed from a consumer centric point of view, then guiding them down the sales funnel is even easier.
Leading private label merchants do look beyond their existing stable of communication tools, however. With its “Insider’s Report”, LCL was a pioneer in designing custom publications solely to promote its private label products. LCL also produced a stunning cookbook to celebrate the launch of its popular line of President’s Choice “Memories of…” sauces, which were the vanguard to gourmet global tastes in Canada. Today, custom publications are the cost of entry into private label.
Understanding and developing your brand vision is the most critical first step to creating a successful private label strategy. Simply put, a brand vision is your roadmap to success. Define and stick to the criteria for each tier and use packaging to bring the vision to life. Once you’ve ensured that stores are operationally supported to execute the vision, and have used all communication tools at your disposal to tell the story to your customers, everything else will fall into place.
In our next installment, we’ll examine the role of sourcing in private label strategy.