Embracing a Product-Led vs. a Brand-Led Mindset in Private Label
The traditional way that retailers have developed their own-brand programs has been via product-led initiatives and by tier. More often than not, they’re not leaning into a brand-led approach, which may be limiting their brand, their impact, their potential customer loyalty and also their revenue.
The difference is significant.
A product-led approach is driven by finding or sourcing a new product, and then determining whether it belongs in an opening price point, is a national-brand equivalent or could fit best within the premium tier, based on the product’s specifications. A brand-led approach, on the other hand, necessitates that you lead with your brand’s purpose and therefore enables a retailer to think bigger and plan with long-term brand loyalty aspirations.
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Think of it this way: Instead of saying, “We need an oat-based creamer or a new health-conscious yogurt because someone else launched one,” which often translates to “Our competitors did it, so we need to do it also”— a brand-alternative mindset. A brand-first mindset shifts the thinking toward “Because we recognize that health and wellness is important to our customers, we should develop a better-for-you brand with products across the entire store that will meet consumer needs in a meaningful way.”
This approach is much broader and much more impactful, requiring different behaviors – develop versus “find.” Think broad, in terms of category or department, as opposed to a SKU level. Plus, it will give you an opportunity to develop a portfolio of products with a strong brand that can have much greater reach than what the national brands can deliver.
This approach challenges retailers to think beyond individual SKUs to a brand-first mindset to build something that can scale and evolve. That’s how you future-proof your position in a market that constantly changes and evolves.
It’s About Value Proposition, Innovation and (Sometimes) Imitation
Shifting to a brand-first mindset requires intentionality. It’s just as much about innovating as it is about providing a brand that offers a meaningful, sustainable and scalable value proposition. Because when you stop thinking product-first and start thinking brand-first, you start thinking about a different set of criteria and magic happens — at an exponential level.
To do so, you need to understand your customer, have a keen understanding of trends, foresee fads, collaborate with every department, and ultimately consider the whole range of possibilities that a meaningful brand story supported by relevant products can deliver across the entire store. To be clear, in addition to expanding your core offerings, it’s important to look outside the box to build a product and brand with purpose. It’s about going a step further to create a framework that gives your entire brand a stronger, unified identity bolstered by credibility.
For years, private label followed the same pattern. Let’s take the “all natural” segment, for example, which is where it started, before becoming all about organic, then low-cal, low-carb, low-sugar, gluten-free, dairy-free, etc. Each iteration interpreted “better-for-you” in a different way, but when products are reduced to singular attributes instead of fitting into a bigger brand strategy, you end up with a highly fragmented brand message.
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Don’t get me wrong – brands are living and evolving things and may have to pivot as markets shift. You must be thoughtful and thorough when defining your brand message. This will ease decision-making when opportunity knocks, and it always knocks.
Consider that each major retailer adds anywhere from 300 to 500 new products to its shelves every single year. And when you get into the habit of perpetually adding new SKUs inspired by a feature or flavor but without a clear set of brand rules in place, you may wind up with a chaotic assortment of products and a confusing brand image. Clarity of where and how the product fits the brand is key to developing a strong following — a.k.a. building brand loyalty.
Define What Your Brand Stands For
Don’t react to trends. Instead, seek to grasp whether that trend fits your brand’s message. For instance, maybe organic is still a priority, but regenerative products are the new hot commodity. Perhaps plant-based is still viable, but not as important. Defining what needs to be communicated at a brand level versus a product level is key, because consumers will begin to understand what the brand stands for and the product feature or benefit becomes a supporting cast member to the brand itself. If you sort the characteristics you need, and tackle them at both a brand level and a product level, scalability will become much easier.
Then — and here’s where the real fun comes in — you need to source or develop products that fit the brand. In some cases, you’ll want to innovate and create a differentiated product. In other cases, replicating will do the trick and allow for a quicker go-to-market strategy. Either way, you need to embrace intentionality; otherwise, you’ll end up with a fragmented portfolio — an issue that plagues more than a few major retailers.
Remember that brand clarity is always a good thing, as it will minimize confusion as markets and product trends shift.
Think Ahead and Evaluate Consistently
Let’s not forget that private label has always been the value counterpart to national brands, but value is so much more than price alone. Quality at a reasonable price is almost always cheaper. Inflation is driving people to purchase more private label now, so if you invest in defining your brand purpose and gaining consumer attention now while you build your brand, you’ll have put in the groundwork to keep shoppers’ loyalty after inflation rights itself.
That’s because while consumers don’t get emotionally connected to price or value (that’s a functional thing), if they’re connected to the brand, and the brand just happens to give them the price point (value proposition) they need, then, you’ve captured lightning in a bottle — or, perhaps it’s better to say, loyalty in a bottle.
Also keep a steady eye on the horizon to gauge what’s happening with consumer trends, flavor trends, health and beauty trends, and adaptation. Identify them early, assess the scalability and then go incorporate them into the brand you’re building.
Partner with team members across every department to explore the breadth that the brand can have. Team up with your manufacturer partners to collaboratively develop new opportunities for growth.
Fortunately, you can build the ship while driving it, creating a parallel path. It starts with evaluating what you currently have and accessing whether your brand message is clear.
You might already have some items that fit the category of this new brand, or you could end up moving SKUs across brands. Either way, be open to it — don’t fear a bit of reorganization.
Plus, the love and loyalty created for a well-defined brand could have a halo effect for the banner brand and ultimately help make your store a destination. That’s a win-win.
