Editor’s Note: Looking within
Call it what you want, but retailers are paying more and more attention to private label or store brands as a way to differentiate themselves from the competition and make more money.
Take the recent alliance between Kroger and Walgreens that allows these giant chains to buy together and source jointly for their store brand products. It is just the latest move by chains to find ways to efficiently purchase products from private-label suppliers at a higher volume and at lower costs.
According to a Dec. 11, 2019 article from our sister publication Store Brands, which covers the private label/store brands industry, the companies will be able to “leverage resources from one another, such as Kroger’s 37 manufacturing facilities (where they manufacture some of their own brands) that Walgreens can potentially use, and Walgreens’ sourcing company in Hong Kong that Kroger can leverage.”
Top executives at both companies emphasized that the collaboration will allow them to better serve their customers with unique merchandise that will offer value.
Welcome to the first days of the third decade of the 21st century. Over the first two decades, retail has changed like never before. The rate of change will only accelerate in the coming years, and the best retailers — including Walgreens and Kroger — realize that they must take the appropriate measures to stay ahead of the curve.
Developing more private-label options is one big step in that direction. But the products must be at the same level — or higher — than that of the national brand equivalent in every way, from the packaging to the quality of the merchandise, and offer better pricing. And, they must be merchandised in such a way that the consumer no longer sees them as simply a less expensive alternative.
Consumer expectations are evolving at a head-spinning pace. Retail no longer is just about going to the store to pick up some things. On top of everything else, it must be an experience for the shopper, who now has the option of sitting at home and ordering online at any time of the day or night.
To ultimately be successful in this environment, retailers must offer these shoppers the best of everything, from the experience and the assortment to the pricing of merchandise. Do this correctly and you stand a good chance of surviving the decade. Fail at this? Well, that is not really an option anymore, is it?