Against the news that Italian restaurant chain Prezzo is to close 94 of its 300 restaurant outlets (in the same week the FT reported that profits at the top 100 UK restaurants dive 64% in a year), I was interested in the comment by Ingo Braeunlich, CEO at Smart Foods, who attributed this fall to the lack of differentiation from mid-segment businesses. Braeunlich believes many restaurant chains have optimised a bit too far which has resulted in them lacking the customer experience of the independents whilst charging almost as much as good independent restaurants.
As Braeunlich put it: “so either quality leads or price leads, middle ground dies”.
And I think there is a direct corollary for own brands to have a clear position; a clear brand value.
‘Must have’ products vs ‘me too’ products
There has been a distinct move to more premium own brands, because these provide the opportunity for a clearly differentiated value proposition as opposed to the ‘me too’ value own brand products. Both have their place. How differentiated can a tin of beans be? Therefore, own brand teams need to clearly determine where products are ‘must have’ to match rival retailers, and where is the point of difference.
When working with own brand teams, it is clear that the more successful teams have an obvious definition of what brands stand for, and how they will win. It may be value, it may be novelty. Co-op is one of the most vocal on their core strategy around local, British and convenience and this influences product development and ranging decision.
Own brands need one view of their product performance
With our UBX Cloud Services, a core principle is to create ’One View’ of product performance. And this needs to be focused on brand values and brand propositions. For example, if a benchmark comparison is based on nothing more than the traditional organolopetic measures such as taste and texture there is an almost inevitable ‘me too’ to the comparison. Whereas, if a brand is planning to win on provenance, or nutrition, or free from, then this needs to be part of the one view that both retail own brand teams and their own brand suppliers collaborate on to drive products and customer experience. Customer feedback should be measured against core values; does the product ‘do what it says on the tin’.
The middle ground dies
With the increased focus on convenience, the brand loyalty to the headline brand – the name over the door – is being eroded. It is all too easy, nay, convenient, to buy from the retailer that provides the best of that product. I’ve written before, and firmly believe, that it has never been more important for a product to perform in its own right and deliver on the brand promise. There is no future in a ‘me too’ middle ground.
It doesn’t have to be as black and white as Braeunlich put it. It is not only quality or price. It can be experience, health or with recent noise around the environment, a choice of packaging… but I agree that there must be a clear value; the “middle ground dies”.