PLBuyer: Where’s the In-Store PL Marketing?
Through a special arrangement, what follows is an excerpt of a current article from Private Label Buyer, presented here for discussion.
Secret shoppers sent out by Private Label Buyer have found very little in-store marketing for private label. To most of the magazine’s editorial board, this isn’t so surprising, reflecting an overreliance on national brands and their promotional funds as well as a general lack of support for store brands.
"Supermarkets are walking a fine line these days between driving sales in their own brands and promoting movement in national brands," said Carl Munyon, formerly vice president of corporate purchasing for Aldi. "The national brand promotional funding is in many cases too attractive for the supermarket to give up. Therefore, the private label does not get the in-store marketing that they would like to give it. Supermarkets should be doing in-store promotions of their own brands as part of a customer loyalty strategy … using a private brands marketing manager that focuses on key metrics for circular and in-store promotions of private brands could help drive improvement."
Craig Espelien, former vice president, business development, at Crossmark, a sales and marketing firm, believes that retailers typically heighten marketing efforts around private label during in the depths of a downturn but shift back toward national brands as the recession nears its end, partly induced by funds from tertiary or fringe brands trying to stay alive. Said Mr. Espelien, "This causes a loss of focus on the retailer’s PL, and a lost opportunity to establish their brand with a meaning that embraces price but goes beyond price."
James Rushing, a partner at Symphony Consulting, Symphony IRI Group, said in-store marketing is a huge opportunity, but retailers find it tough because of bottom-line pressure to keep marketing costs to a minimum.
"Furthermore, it’s difficult for retailers to spend the resources on strategizing about marketing products at the same level as a CPG manufacturer," he added. "I wouldn’t say it’s surprising, since it’s a bit of a foreign concept in the U.S. market. Retailers appear to struggle with measuring ROI, and, as a result, there’s less investment made. There are definitely opportunities to market, both in-store and out-of-store."
Going against the tide, Paul Osinski, senior vice president, commercial sales, with Salient Management Co., believes major retailers were adequately promoting their store brands.
"I believe the better retailers across the country support their brands in-store on a regular basis," said Mr. Osinski. "Remember that most decisions are still made at the point of purchase. If you have established your quality over time with your consumer, then your competitive pricing at the shelf is one of the strongest marketing messages you can make."
Discussion Questions: Are stores adequately supporting their private label brands with in-store marketing or are is it wiser to keep promotion spending at a minimum? What must they do to improve?