10

Retail
bRANDS
1
BM 10 : Learning Objectives

• The importance of the retail market

to bRAND management

• The growing role of retailer’s

bRANDs.

2
D.O.B. bRAND
Retail bRAND Management
MANAGEMENT

DEALERS OWN bRANDS

THE RETAILERS bRANDS
PRIVATE LABELS
--- NOT THE PRODUCERS bRANDS

--- BORN OUT OF CONFLICT BETWEEN THE

PRODUCERS AND THE TRADE !
3
Retail bRAND
D.O.B. bRAND Category Definition
MANAGEMENT

The retail category includes

1. Physical And Digital Distribution

channels
2. Grocery & Department Stores
3. Specialists In Drug
4. Electrical, DIY & Home
Furnishings.
4
Share of retailers bRAND’S in total sales - %

80
50
22
10 3
Fra/Ger Europe North Latin America Asia
America

5
Nielsen research 2013,
59,000 internet users across 58 countries

• 64% of
Respondents would
be open to buying
store or "value"
bRANDS 6
 Tesco Homeplus, Subway Virtual Store: Since people are extremely busy, on the go and
don't have the most time to shop, Tesco created a virtual shopping experience in the busiest
subways stations in South Korea. The merchandise was presented the same was as in stores,
except the buyer user his/her phone to scan a QR code instead of actually taking the
product. The product is added to their shopping cart, and when the online purchase is
complete, the items are delivered right after they get home
Retail bRANDS …4 MODELS

1) The Aggregator
bRANDS that are primarily providers of
manufacturer choice, environment and price
to mass consumers. e.g.
• Tesco
• Imtiaz Stores
• Carrefour
• Migros
• CSD
• Aldi
• Lidl 8
Retail bRANDS …4 MODELS

2) bRANDED Own Label

These are bRANDS that are primarily providers
of a private label proposition, environment and
price. e.g.

• Zara
• Marks & Spencer
• Service shoes
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Retail bRANDS …4 MODELS

3) Product bRANDS
bRANDS that are primarily providers of a
private-label proposition with the majority of
their product being distributed through third
party retail bRANDS. e.g.
• National Masala
• Adidas
• Olpers
• Sony
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Retail bRANDS …4 MODELS

4) Online bRANDS
bRANDS that exist only online and not
present physically e.g.
• Alibaba
• EBay
• Amazon
• OLX
• Shophive
• Homeshopping
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How do Retail bRANDS Evolve
• Some time ago private-label was exclusively focused
on a value or access proposition.

• More upscale, quality products were the domain of

bRANDed suppliers that were stocked by the retailer.

THIS IS ONE OF THOSE CLASSIC, PERCEIVED ‘RULES’

OF A MARKET THAT HAS BEEN BROKEN

• Private-labels of yesterday has forced retailers to

become “bRAND Managers”

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How do Retail bRANDS Evolve
 The starting point for DOBs is giving more shelf space to
DOBs

 Inflations & Recessions periodically give boost to down-

trading and DOBs.

 Price is the driving force of DOBs even in premium segments

 Consumers perception of DOBs is now of genuine bRANDS

 TESCO( #3) & MARKS & SPENCER(#10) were among the top
ten bRANDS in UK IN 2012, Aldi in 2014

 Online is encuraging retail bRANDS globally

 Wallmart and Amazon in USA, Alibaba in China 13

How do Retail bRANDS Evolve

Retailers bRANDS are able to sell at a level of price

which is about 15% to 20% less than the producer
bRANDs

Retailers now offer a full spectrum of private-label

products, moving beyond the value segments into:
• Luxury,
• Specialist Supply Sectors,
• Beyond…

14
How do Retail bRANDS Evolve
Now Private-label Is More Than Just Another Consumer
Touch Point, It Really Is The bRAND.

These days private-label often leads product formulation

and even innovation.

15
Retail trends 2015

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Retail bRAND Characteristics

Of all the market categories, retail

offers the broadest canvas for any
bRAND to show its true colors.

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Retail bRAND Characteristics
• The store is the heart of a bRAND.

• The store is the emotional center of a bRAND

• retailers focus on enhancing brand experiences.

• Selfridge's "No-Noise" campaign introduced in

January 2013 that featured name bRANDS with no
Logos.

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Retail bRAND Characteristics
The retailers’ proximity to consumer trends
gives them abilities to build a relationship with
their shoppers.
The Architecture That Retailers Adopt Within
Their Private Label Portfolio Varies…

Carrefour’s private label system has 12,000 product

lines… with a dedicated graphic system, differentiating their
products’ Visual Language from their store’s Visual Language.

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Retail bRAND Characteristics
1. Knowledge of customers, which enables it to serve
them better

2. Closer to the customer and more emotionally

involving

3. More competitive, the retailer bRAND will become

a tool for winning customers, enhancing customer
loyalty

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Retail bRAND Characteristics
4. Understanding of markets that gives birth
to a strategy.

5. Creation Of Environments

6. Engagement Of The People that bring the

bRAND to life

7. Supply of products that puts the bRAND into

the consumer’s hand

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Retail bRAND Characteristics

2014 Sales 84 b Euro

10,900 Stores, 35 countries 22
Retail bRAND Strengths
The retail store offers
great opportunity

to bRAND managers to gain

insights
into the minds of the consumers 23
Retail bRAND Strengths
 The great strength of most retailers is the sheer
number of people they do business with.
 Retailers largest fixed assets may be their space and
supply chain, perhaps their greatest assets are the
shoppers themselves.
 Leading retailers are catching up with their category
captains and other FMCG partners in terms of
shopper knowledge and sophistication

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Retail bRAND Strengths
The KEY STRENGTH of
the retailers is their
ability to gain

insights into the

minds of the consumers
on a daily basis.
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Retail bRAND Strengths
Increased shopper knowledge and in-store marketing
sophistication builds the business in critical ways.

1. It increases the buying power retailers have with manufacturers

which improves margins and keeps suppliers on their toes.

2. It solidifies the bRAND as a mainstay in the customer regime

3. Improved total store-shopper orchestration grows the market

basket by leveraging shopping occasions for additional items.

4. It forms stronger bonds with the customers which allows the

retailer to extend relationships into new categories.

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 Retail bRAND Characteristics
• True competitor to producers bRANDS
• No more linked to low cost/quality
• MIGROS in Switzerland Is the leading food bRAND ahead of
“NESTLE”
• Each developed economy has its great names of retail bRANDS

• WALLMART
• CARREFOUR
• SAINSBURY
• MAKRO
• ALDI
• Lidl 27
28
Retail bRAND Characteristics
• Stores are recognizing the use of their environments
to act as direct experiences of their bRANDS

• Retailers used to think in terms of location & size,

Now they think of space in terms of bRAND
experience and online convenience

• Retail bRANDS have some advantages over virtual

bRANDS in the on-line domain ; they have the
possibility of being experienced in both the real and
virtual worlds.
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RETAIL bRANDS .. DOBs DRIVERS

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Retail bRAND Management
CURRENT REALITY – PAKISTAN

• Utility stores
• Canteen stores department CSD
• Large un-branded sector evolving into dob e.g.
Tea
Detergents
Cooking oil

• Makro, Metro Carrefour, enter Pakistan

• Imtiaz stores
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 Retail bRAND survey 2010
Category %age who find retail
bRANDS as good as
Producers

Providing a good value for the money 89

Offering products that meet my needs 87
Offering products I trust. 80
Offering high-quality products. 73
Offering innovative products 69
Having appealing packaging 65

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Retail bRAND growth in USA

• 31.4% of food and beverage launches in the US in

2011 were own-label items.

This is 100% more than total launches in 2010,

a modest 8.7% in 2009

Source: Datamonitor

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Retail bRAND promotions investment

Retailers in the UK spent

more
money on traditional media
advertising than the
country's FMCG bRANDS
for the first time
in 2010
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Retail trends 2014
Lidl ASDA
supermarket Supermarket
launches chain has
range of overtaken
value fashion Marks &
clothing Spencer as
challenging UK’s 2nd
PRIMARK largest
and H&M clothing
retailer35
Retail trends 2015
• Payments by mobile
• Enhance the shopping experience
• No checkout counters

• Physical retailers or online

retailers ? Although currently 10% of retail sales
are made online , a full 50% are initiated online

• Aldi moves into smartphones with launch of cut-price

device….
• AMAZON too !
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Retail bRAND Online challenges
• Consumers are in control
• Comparison shopping environment
• Pricing comparisons easier
• New retail bRANDs:
1. Amazon
2. Ikea
3. Ebay
4. Google
5. Shophive PK
6. Homeshopping PK
37
Retail trends 2015
Sainsbury’s overtakes Asda to steal
spot as second biggest supermarket

38
Retail trends 2015

Asda’s top marketer says it

must focus on bRANDING,
not price promotions as a 5-
year strategy 39