Store Brand vs. Product Brand
Building a trusted Retail Store Brand.
You know about the most successful retailers: Trader Joe’s, Total Wines, Costco and others. They’ve built a “reputation for their store” that customers trust for quality and value. When shopping in these stores, customers are willing to buy the store’s private label and recommended products because they deliver great value to the customer. The store’s brand, not the product brand, drives the sale. This also drives margin for these retailers. In some cases, wine is sold at upwards of 45% margin. The products are terrific, and the customer value is high.
The Internet and the “Big Brand” Dilemma
Big brands are not as valuable as they once were. Big brands are available everywhere, they are discounted everywhere, and retailer’s margins on these brands are in decline. See Big Brand Dilemma.
The Millennials aren’t attracted to big brands. The eschew them in favor of specialty brands they and their friends “discover”. They are swayed by “star reviews” from peers, not reviews from an expert they cannot relate to.
The future is with “New Brands” using private/controlled label products that are exclusive to the stores and are backed by controlled web content. The Store itself is the “trusted brand” to the consumer.
If the Store recommends a product, then the customers are usually willing to give it a try. If their experience is good, the customer comes back for more of the store’s recommended products. The cycle continues and the customers keep coming back to try new recommendations or repurchase what they’ve enjoyed in the past.
Digital Social Proof
A wine/spirit buyer in your store and may see an item that interests them. They are looking for “social proof” to see if the product is liked by their peers or someone they trust.
They use their smartphone to search for details on the web. A web search for a “big brand” returns “where to buy near me” along with the prices. Your store price is compared with the internet price and if it’s too high, you lose the sale and the buyer remembers your store for “overpriced” on wine. This called “Showrooming”.
This can be completely reversed with Private/controlled label product and Tier3’s Store-Branded Interactive-POS, along with “Guided Showrooming” from Tier3.