The Private Label Strategy

February 6th, 2012

Are you thinking about new private label sourcing strategies in 2012?

Today’s post is by Mark Davis; Vice President of Operations and CTO at SafeSourcing. 

Virtually every retailer, especially those in food, fuel and pharmacy, has some plan in place for private label products in their sourcing strategy.  The commitment, creativity, and relevance with which companies apply this strategy vary, but some of the new trends are remaining constant as the private label movement continues to expand and change.

today’s blog we will look at some of these trends and how they are affecting the private label sourcing strategies in retail today.

More than just cost – Historically, the biggest reason for private label strategies comes down to reducing costs.  Without the overhead of huge National Brand advertising companies found that offering a comparable private label product at a greatly reduced price drove increased margins and sales.  As time has gone by, the perceived gap of quality between private label products and National Brands as continued to close.  By controlling the source of the private label product, companies are able to enforce higher quality standards as part of the new contracts and agreements they make.

Variety – A significant advantage companies are beginning to realize in the process of evaluating their future private label programs is that they are finding that private label suppliers are beginning to offer as many, and in some cases more, variety of products than the National Brands can offer.  Being able to mix and match products from different suppliers can provide an overall private label offering that equals or surpasses National Brand lines.

Packaging flexibility – The newest trend in private label sourcing is the incredible flexibility offered in packaging and branding.  With the control over all aspects of how a product is marketed and branded, retailers can develop campaigns that fit tightly with the culture of the company and can be critical parts of corporate rebranding efforts.  Packaging that is unique and personal is able to develop the loyalty with customers that go far beyond being a location to buy thousands of products manufactured by other companies.  With good quality, lower priced, strongly branded products that can’t be purchased at the nearest Super Store retailers can create that brand loyalty that connects to their overall company loyalty.

For more information on helping to find private label suppliers and packaging experts that can help further enhance your company’s private label objectives, please contact a SafeSourcing Customer Service Representative.  

We look forward to your comments.

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