The annual Private Label meeting, held in Amsterdam from May 24th to 26th, focussed on the growth of retailer products, underscoring relationships between retailers and suppliers.
Michael Gionfriddo
In the current context, characterised by the exponential growth of private label products, it is getting more and more strategic for suppliers to develop ad-hoc solutions for this category.
Tissue products (toilet rolls and kitchen towels), included in the category of household and kitchen products, proved to be those on which retailers concentrated most.
An inquiry reveals that a new trend is spreading in the private label field. In the future private labels will not be considered low-cost products, but rather, they will be defined as more functional, high-quality, added-value products. Then private labels will be in no way inferior to branded products.
RETAILING HAS CHANGED ITS STRATEGY, FOCUSSING MORE ON CUSTOMERS’ LOYALTY RATHER THAN ON PRODUCTS’ LOW COST. Private labels now make use of marketing devices just like branded-product manufacturers has done for many years.
But, what are today the main concerns of retailers? A survey carried out by the PLMA Association reveals that among these, economic issues carry a strong weight. The general recession and climate of distrust in the economy of recent years are still present, although the signals of an upturn in the economy can now be seen.
Both large-scale retailers and small retailers feel the need to foster customers’ loyalty and this explains research for product innovation.
NOW MORE THAN IN THE PAST, COMPETITION IS TAKING PLACE ON TWO SIDES, INTERNAL AND EXTERNAL; on one hand, large-scale retailers compete against one another, conquering market shares through special offers, loyalty prizes, etc.; on the other hand, competition between branded products and private labels, results in a fight to prevail on market shelves. This fierce battle has made the precarious balance between manufacturers and retailers even more difficult.
BUT, WHERE IS LARGE-SCALE RETAILING HEADING?
Retailers are getting more and more customer-oriented: this is the reason that they ask manufacturers for product innovation, more quality and diversification. All fundamental elements to satisfy an increasingly exigent consumer, who wants more guarantees and better services, and is always looking for values that go beyond the material essence of products. So retailers choose suppliers on the basis of their proactive ability, creativity and capability for innovation; this is why, in the current scenario, innovation is for producers a virtue/necessity through which more shares in a growing market can be conquered. This is valid also for retailers, who predict, for the future, international purchasing habits. In fact, the Asian markets and the new EU countries now offer new development prospects for non-food products.
So, see you at the next edition of PLMA to discover the innovations of the future! •