22 Mar Back to the future: the new rise of the Private Label Phoenix
Dramatic, distinctive, unique and game changing. Revered by millions throughout the world to this day. Inspired by French manufacturing technology and creativity. Debuted in the 70’s. Ripples ran around the globe. And now 2017 becomes the year of Back to The Future.
Private Brands? Yes and No. I am specifically talking about the DeLorean car so lovingly driven by Dr. Brown in the 1985 movie that has had such everlasting success. And, of course, featured in this year’s Oscar Award Show.
Why 2017 and why am I thinking about it now? Because a Liverpudlian mechanic, Stephen Wynne living in the US for over 30 years has been dreaming about this for decades. He had acquired the massive inventory of parts when the company went into bankruptcy. The car could not be manufactured due to safety and emissions regulations making small scale production unviable.
Those regulations are now lifted to a large extent by the passing of the Low Volume Motor Vehicle Manufacturers Act. The Spring of 2017 should see the first new DeLoreans rolling onto the road from a plant in Humble, Texas.
So why the link to Private Brands?
Dramatic, distinctive, unique and game changing. Revered by millions throughout the world to this day. Inspired by French manufacturing technology and creativity. Debuted in the 70’s. Ripples ran around the globe. This was how we looked at the early days of Private Brands. Marks and Spencer created the real basis for what we know today. Quickly emulated by Casino and Carrefour in France with “Produit Libre”. Essentially “Brand Free”. Loblaws brought the idea to North America and Jewel Tea to the US.
There was a key difference. The idea of “Produit Libre”, so quickly and well replicated in Canada was based on equal quality to the major brands but very much less expensive. The US chains that tried to do the same went the “cheap and not so cheerful” route, which has taken a long time to recover from. The UK and parts of Europe have generally gone from strength to strength in expanding the sophistication and quality of their offerings. The incorporation of quality products and platforms into everyday strategy is very evident. But for many parts of the world, the journey is really just starting as Retailers emerge from the days of low quality and poor branding.
So now, 30+ years later, many of the world’s Retailers are faced with a new threshold. From North to South America, from Australia to Asia. Where, what and how to next? This discussion is not about multi-channel, which is a strategic dilemma, while no less important, but best left for another day.
This discussion is about product and brand development. The very same issue that Retailers wrestled with back in the days of the early pioneers. Brands have exploded into all markets, many of them global in their reach. And many more regional, cultural and local. The increased speed of replicating technology, packaging and taste profiles have made it easy to imitate.
Consumers have changed quickly. As did their preference for a gull wing and sleek stainless steel car back in the 70’s and 80’s.
Manufacturers have merged and grown. New, smaller Manufacturers have mushroomed as has the demand for new and different. Many of the old staples are less attractive now than they were, making many openings for new Private Brands to step into the space.
The Stock Market has not been kind to many of the giant manufacturing concerns over the last 5 years. Consumers seek more than the same cookies/biscuits of their youth. The trends against sugar have slowed the carbonated drink industry to a standstill. If sugar is the new tobacco, then what is the future of GMO ingredients, palm oil, many fish species, and red meat and of course, good arable land to produce our food?
All of this drives the need for quick reaction in the supermarket. Health and Wellness platforms, organic foodstuffs, free from and no artificial flavors and colors challenge those responsible for providing their Consumers with what they want.
Complexity of labels. Lack of trust in claims made. Absence of more clear and trustworthy information means increasingly high levels of consumer frustration.
Smart phones are in the hands of such a high % of populations world-wide that brand and product owners are faced with the need for urgent action. This is the access to information era. Smart business may mean Smart labels. QR codes while seemingly faded away are poised to come back in a different guise.
Just as Retailers in the 70’s wanted to get “Produits Libre” onto their shelves quickly, because the brands were well on their way to dominance, so too today, Retailers are faced with a high demand for less “old world brands” and needing more focus on provenance, locally made, fresh and enticing. More of us will be cooking products that we buy daily/weekly. Sure we can and will order staples electronically and whether we “click and collect” or have someone sit at home awaiting delivery is immaterial. Getting our hands on fresh locally grown foods that are not heavily packaged and branded will be what brings us into the stores on a frequent basis.
This is potentially a golden era for the small to medium sized Manufacturers and growers that can focus on providing the market with products for the foreseeable future. This will only work when Retailers are alert enough to embrace new fast paced technology to find the products, communicate with the Manufacturers to get them onto the shelves and keep them there and interact with their Consumers to get really reliable feedback: with robust communication mechanisms to share information between the three parties involved in every transaction. The consumer, the retailer and the manufacturer need to pool resources.
I am sure that the next few years will reveal a lot of product and excitement in the stores and on line. Also on the road from Humble, Texas.
About Tom Stephens – Brand Strategy Consultants
Tom Stephens has a career in private label and retailing spanning 6 continents and almost 5 decades.
Tom initially worked for 2 major retailers: Woolworths (Marks and Spencer) in South Africa and Loblaws in Canada. He left the retail Industry after 25 years and started his Consultancy Practice in 1994 and since then has worked globally for many retailers and manufacturers. His specialty is product marketing and development strategy. Tom travels extensively and has worked from Australia to The USA, from Europe to South Korea, from the UK to the Caribbean and from Shanghai to South America. His team of Consultants are leading specialists in product development, design, supply chain, retail systems and business strategy.
He lives in Toronto, Canada and spends several months each year in Australia.