PRIVATE LABEL
PRIVATE LABEL
Turning the retail brand threat into
your biggest opportunity
Keith Lincoln & Lars Thomassen
London and Philadelphia
Publishers note
Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and author cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or the author.
First published in Great Britain and the United States in 2008 by Kogan Page Limited
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses:
120 Pentonville Road
London N1 9JN
United Kingdom
www.kogan-page.co.uk
525 South 4th Street, #241
Philadelphia PA 19147
USA
Keith Lincoln, 2008
The right of Keith Lincoln to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
ISBN: 978-0-7494-5027-4
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Lincoln, Keith.
Private label : turning the retail brand threat into your biggest opportunity / Keith Lincoln and Lars Thomassen.--1st ed.
p. cm
ISBN: 978-0-7494-5027-4
1. Retail trade. 2. Branding (Marketing)--Management. 3. Brand name products--Management. I. Thomassen, Lars. II. Title.
HF5429.L52275 2007
658.827--dc22
2007037084
Typeset by Saxon Graphics Ltd, Derby
Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall
Dedicated to PRIVATE and BRAND buccaneers everywhere.
Many people have contributed to this book, and we would like to thank them all. But in particular we would like to thank the following people for their thoughts, direct help and guidance throughout. In no particular order:
C Migeul Brendl, PhD, Associate Professor of Marketing, INSEAD
Martin West, CEO, Ashdown Group
Bruce Vierck, Strategy Director, RTC Worldwide, Chicago
Martin Lindstrom, Brand Futurist and author of BRANDsense and BRANDchild
Roy Webster, Group brand Manager, ASSA ABLOY Worldwide
Magnus Von Reymond, Yale Retail Manager, ASSA ABLOY Worldwide
Ulf Erlander, CEO, SWE, Stockholm
Olle Hard, Partner, SWERETAIL, Stockholm
Lew Pringle, Former Worldwide Board Director, BBDO Worldwide
Xavier Oliver, Chairman, BBDO, Spain
Tom Watson, Worldwide Board Director, BBDO Worldwide
Susan Froggatt, Sue Froggatt Training and Consulting
Paul Freeman of s4p.com
Michael Coyle, Former EVP, Cordiant Europe
Paul Lincoln, Chief Executive, National Heart Forum
Chloe Lincoln, daughter, researcher and proofreader
Kristina Eklund, Jens Lanvin and Mia Wahlstrom of Opinion Bengal, Stockholm
Mathias Dittrich of DLF, Sweden
Egil Brathe of Movement.nu
Mathias Segelman of RTV
Helen Kogan, Jon Finch and everyone else at Kogan Page
POPAI
BrainJuicer internet research company
And finally a particular thanks to Saatchi & Saatchi X for their creative, strategic and intellectual input throughout, especially Phil White, Planning Director, and Simon Hathaway, Managing Director.
Thank you all
Keith Lincoln
Lars Thomassen
The reverse side also has a reverse side.
Japanese proverb
Finding the reverse side
Private Label has been growing at least at twice the rate of famous household brands over the past 10 years. In fact, there is much talk these days about the growth of Private Label or retail brands around the world. Or maybe we should say PRIVATE BRANDS. Because brands indeed they are at the end of the day. And brands we shall treat them as throughout this book. That talk centres around many issues. But the one that stands out is survival.
Survival for todays brands against the inexorable growth of Private Label everywhere you look, and increasingly in every category. Survival for retailers if they dont have the best Private Label brand offerings for their shoppers to keep them locked in and loyal to their banner. Survival for manufacturers if they dont have enough capacity utilization to justify their investments. Survival for agencies as Private Label communications lead to a significantly reduced overall expenditure and perhaps more tactically driven shopper marketing activity. Survival for marketers as they increasingly feel the squeeze and query their role in a world where consumer packaged-goods brands seem to be losing their salience and appeal.
But lets forget talk of survival. Lets turn this issue on its head and seize the opportunity that it represents. Opportunity for brands to reinvent themselves through dramatic innovation. Opportunities for retailers to truly innovate their offerings. Opportunities for manufacturers to optimize their production capacity. Opportunities for agencies to reinvent communications. Opportunities for all of us as shoppers to get ever-better-value offerings. Opportunities for everyone to drive the key forces shaping todays and tomorrows society.
Yes, Private Label isnt a curse. In fact it may well be a gift. A gift that forces all of us to re-examine the status quo. A gift that forces us to move positively with some of the key major forces shaping todays society and work more effectively and collaboratively together.
Our reverse side from survival is simply opportunity.
SEIZE THE OPPORTUNITY BEFORE IT SEIZES YOU
A gift that is increasingly relevant to us all whether we be in the UK, USA, China or Scandinavia. Whether we like it or not, every major fast goods category in the world will soon have Private Label. Private Label has been growing at least at twice the rate of famous CPG (consumer packaged goods) brands over the last 10 years. How has Private Label grown at such phenomenal speed indicated above, and what lessons does it offer players in the more broadly defined FMCG (fast-moving consumer goods) markets? We tend to think of it as a food experiencebut increasingly its a total consumption experience. Globalization of taste, retailers and people has made Private Label a global reality. The face of todays retailer is increasingly Private Label. Understand it. Its not about to go away. Deal with it.
Maybe from now on we should call them PRIVATE BRANDS. Maybe if we started calling them brands instead of labels we would build very different strategies to compete. Brands are obsessed with fighting their nearest branded competitor. Do they act as if Private Label is their nearest branded competitor? Maybe they should and maybe theyd act very differently in practice if they did.
The brand has moved on. In essence its become