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  White Paper - Strategic private label is the icing on the cake in the retail business  
     
     
 
W H I T E   P A P E R
   
   
Retailing for
every moment
conversion
 
   
   
It has historically been
proved that the biggest source of income and profitability in the retail business is private label.
 
   
by Shombit Sengupta
 
Private label is the icing on the cake
   
   
   
Organized retail in developed countries has, in the last 31 years, strategized to add value to shoppers by
providing private label products at 20 to 30% lower
price than national brands



Shoppers there have been educated to expect multiple category products in the retail with only a few brands. As it’s difficult to advertise the numerous private label products, their first priority is to make private label into totally self selling objects on the shelf.

The products should implicitly connect to shoppers with a high balance
of cost, quality and aspiration while being of lower price than any
national brand.
  Cost Quality Aspiration
   
  There are 4 schools of thought regarding private label
branding that’s been implemented and has shown results
  1. Retail brand transcended to private label for basic category products, eg. Carrefour. A few other brands
    address premium or high value category products
  2. Retail brand transcended to private label while segmenting the basic, mid and high category products with sub     category branding, eg. Tesco

3. Retail brand transcends to all categories, eg. Walmart
  4. Private label kept totally isolated from the retail brand, eg. Intermarche in France
 
  In the 1970s and 1980s, a few retails created private label brands in every category to look like national brands.
Without proper communication these were considered fake and could not succeed.That’s why this chapter is totally buried, it cannot come back
   
   
   
Cross category brand architecture for private label
The 4 ways of handling private label that reciprocate success is mentioned in 1 to 4 above. A large number of categories can easily be fixed under one brand, but a minimum of 3 layers has to be created for the generic level product, branded category product and the exclusive branded category product.

Ideally the 3 levels should have their own very distinctive structural packaging as the illustarative architecture shows below. There will always be two types of architecture in private label: Basic and category differentiation. The main attraction to
be created here is the tangible benefit the shopper can intercept at the moment of purchase.
 
  It’s best to avoid copying any national brand as it confuses the shopper at the store. Doing
so would make the private label appear like a counterfeit brand.
A retail brand has the
responsibility of protecting
shopper value.
  Category differentiation architecture
 
 
 
The retail has to simultaneously invite shoppers for the store’s multiple choice of national or regional brands, as well as its private label as the shopper’s alternative choice, of course not counterfeit choice
  But a lot hinges on the store’s image. In the case of Harrod’s
in London, any product that
gets the Harrod’s stamp
receives its authenticity and
high premium value.
  A private label brand cannot be
stretched as much as you want, it’s
usage depends on the type of store.
High competence categories such
as electronics, telecommunication,
durable appliances, jewellery, fashion
accessories need to have different
private labels in the same store.
  Shining example of low price to high
price food category private label for
Reliance Fresh
 
 
 
 
A manufacturing company’s brand is highly focused on the category, and the manufacturer can choose
a distribution system for where he wants to sell
his products

But private label is captive sales only.Private label can apply an ingenious extendible architecture differentiating among a range of categories, quality levels, and variety inside each category.

This allows private label to control numerous, quality driven products with discipline and flexibility for easy understanding
so as to create an impact of being the high aspirational alternative to national brands.
 
Three examples of private label strategy and execution by Shining Consulting
Reliance Fresh   Reliance Fresh
     
Reliance Fresh  
Reliance Fresh Private label at
Reliance Fresh
stores categorizes
different hierarchy of
products from base
to premium value
 
Via   Private label Via driving the cosmetic category for
Intermarche in France
Monoprix   Retail brand Monoprix extended as private label across categories
 
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© Copyright of all original content in this website belongs to Shining Consulting and cannot be used for any purpose without written permission from Shining. The copyright of the different examples of brands and advertising used in this website belongs to their respective owners.
 
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