Store brands: why Indian stores are n’t getting it right??

Store brands are a profitable proposition for retail chains to lure customers and build loyalty. Many stores believe the store brands are successful when they are targeted for generic products and targeted at customer who buy mainly based on a lower price tag. Many retailers, including Reliance, Foodworld, Spencer, etc seem to believe in this logic. Indian retailers have brought in their store brands for commodities such as Sugar, Spices, Washing liquids, etc. Unfortunately, many customers are not enthralled by poor packaging or by supposedly lower price tag. Walk through aisles show huge discounts, buy-one free offer galore for many of the store brands. Why has this strategy failed?. Globally, most successful store brands or private labels are not cheap. Nor they come in cheap packaging. Many a store brand come in cool design and has low everyday prices. Target since mid 1990’s has focused on creating successful store brands and emphasizing on design. Target ensures their store brands do not look like hands-me downs. Publix is another retail chain that has successfully created generic brands into cool brands. Indian retailers must take a look at what Loblaw of Canada has done with its “President Choice” brand.  It is a premium line of product, often with a separate section and prominent aisles. President choice (PC) is targeted at grocery and household products, and focus is on consistent quality. In store branding is enhanced by separate section, PC products are promoted as being equal or better than name brands. No price comparison with national brands. In fact, many of their storefronts, promote through a secondary signage of President Choice. Importantly, their brand promotion has used PC as a generic promotional platform for products other than President Choice, but with a tag line that refers to “people who bring you president choice”.  Closer home, one of the smaller retail company that has done better with its home front brand is M.K. Ahmed group. Their store brand, “Aathica”, has is not low price, is targeted at few groceries, and competes against the national and local brands. In some segments it focuses is on groceries for a particular community, say Malayalee or Tamilian. Simple, consistent packaging with active sales push has seen this brand available across other small Mom-and-Pop stores. So what must larger retail formats do?. Retailers must first define a clear store brand strategy. They need to define why they are into it and what is its positioning. What to emphasize price or quality. Retailers must identify for what products they would extend this brand and how do plan to sustain it. They also need to plan how consistently would they enhance the brand experience in the storefront and how they can use dedicated aisles for it. Without a comprehensive plan and execution, store brands are not going to yield sustainable and predictable revenues and customer loyalty.  

A.P. Deevika

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