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Saturday, October 24, 2020

From “Me-Too” To “ME”: The Opportunity for Private Labels to become Brands

With the coming of age of modern retail including specifically, online retail, consumer access to and exposure to product choices has exploded. Growing affluence and ubiquitous access to product information has also created a higher degree of “aware consumers”. This in turn, is catalyzing/ altering shopping behavior across segments where consumers are making choices that are not influenced merely by brand legacy, familiarity or the influence of advertising anymore. 

Mr. Dhanjay Balodi, Executive Director & CEO, Encept
Mr. Dhananjay Balodi
Executive Director & CEO
Encept

Instead, shoppers across modern and online retail are seeking “authenticity” and “good for me” as markers of brand choice. More and more shoppers are willing to flirt and experiment with new products. Consequently, a more layered and multi-faceted appreciation of “brand value” – what eventually determines consumer consideration and choice – has emerged. 

And this is good news for private labels.

The first phase of private label programs at retailers cottoned on to this shifting consumer behavior and created their own store brands. The strategy was simple: Mimic the category leader through packaging and incentivize the shopper to choose the store brand as an alternative product albeit cheaper, that could deliver equivalent functional value. But is being just a “cheaper alternative” a sustainable strategy? 

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THE “ME-TOO” TO “ME” OPPORTUNITY FOR PRIVATE LABELS  
While “cheaper alternative” may be a practical starting point to build a customer base, sustainability and profitable growth of private label programs will reside on a long-term focus on brand value creation. For private labels, the transition from “product” to “brand” resides in a strategic focus on building differentiation and brand value as against a sales push purely based on price. Fortunately for retailers, they have the critical advantage of being in direct interaction with consumers. This provides first-hand shopper insights and data analytics to help sharpen product value propositions, innovate on products, create new categories, optimize SKU mix and clarify brand messaging – all the vital ammunition required to create “differentiation”

At the heart of what influences and creates brand value for private labels is the unmistakable role of packaging. Designed well, packaging can highlight “uniqueness”, demonstrate “authenticity” and reinforce “credibility” – essential markers of brand value. Even in the absence of any intrinsic uniqueness or innovation in the product or a strong brand legacy for endorsement, well-crafted packaging can trigger a “pick-me-up/ know more about me” effect on shoppers at the store shelf – what we at Encept Brand Design call the Moment of Truth Stimulus.

CREATING MOMENT OF TRUTH STIMULUS WITH PACKAGING
Winning at the “Moment of Truth” boils down to what your packaging does to stimulate curiosity, trigger consideration and enable choice. Based on Encept’s experience working in the private label packaging space across global markets, here are some thoughts private labels could use to build brand value

Demonstrate authenticity. Resonate with consumer value systems: Private label consumers are “aware consumers”. They know what seems true and what doesn’t. Specifically, across F&B and personal care categories, consumer choices for products are clearly skewed towards those that enable healthy lifestyles. “Good for me/ my family” messaging such as “organic”, “gluten-free”, “sugar-free”, “parabens-free”, “no chemicals” etc., communicated with clarity & substantiation is key. Yes, with aware consumers, authenticity trumps aspirational, exaggerated claims amplified by any intensity of mass media advertising. 

Design for omni-channel: More and more products are being purchased online. Packaging design must aid clear and easy navigation across product range with SKU size, product variant, Veg/ Non-Veg, Sugar-Free and other product selection criteria presented clearly on the pack. Use of appropriate “hero images” can enhance buying experience significantly for online shoppers. The design language – treatment of graphics and imagery, choice of fonts and colours etc., must be “digital-media friendly”.

Premiumize. Keep production values high: The quality of packaging material is the first indicator of what the actual product quality may be. Shabbily slapped, cheap-looking packaging printed badly says your manufacturing process could be unhygienic and that you are ready to compromise on ingredients quality to fit a price point… 

Espouse contemporary values: Private label consumers are real people in a real world dealing with real problems. With environmental consciousness at a high and plastic waste a serious issue, being conscientious is a great thing. “Responsible consumerism” is a winning stance for brands to take.

Enhance product experience: Leverage of technology such as augmented reality to enhance consumer engagement and product experience and build loyal consumers is an exciting opportunity for private labels to differentiate. 

Growing consumer sophistication calls for more evolved approaches to private labels management. The need to shift from a “Me-Too” to “ME” is obvious.  Even as retailers are busy growing their private label portfolios with the introduction of new products and expansion into new categories, a clearly thought out branding strategy will be crucial. Needless to say, packaging will be at the heart of communicating and driving this transition. 

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