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PLMA-2019

PLMA 2019 – where the industry sees RED

In the pre-PLMA seminar this week, IGD presented their updated forecast for retail growth in an interesting presentation on the future of traditional retail, where those of us lucky enough to attend got to see RED – the IGD model for retail success, including the role of private label in retail strategy.

To set the context, Ben Millar (Global Insight Director at IGD) shared their latest industry forecasts. In the UK, meals-to-go will continue to set the pace with c. 8% year-on-year growth (compared to the industry average at 2%) and hypermarkets and supermarkets will continue to decline as convenience continues to grow.  But interestingly, whilst online food sales is still forecast to be the fastest growth sector, it will still only represent 8% of total food sales by 2023, which means over 90% of food will continue to be sold via ‘bricks and mortar’. 

Against this backdrop, Ben presented the IGD model RED - the need to be Relevant, Efficient and Different.

Relevant

Relevant is about ranging, personalisation and value for money, being relevant to the ‘shopping mission’. 

Efficient

I think every retailer will recognise the need to be efficient. It’s essential to be cost competitive, but also have a focus on the need for growth in convenience.

Different

This is where private brands play their part.   

What makes the range at one retailer different from another is not about square footage, but unique products.  As Ben put it, retailers need to “differentiate through exclusivity” and to achieve this manufacturers and retailers need to act differently. Exclusivity is not just through the label, but through unique products. Products that tell a story about experience, provenance, health or sustainability. Tell a story to fit the brand.

Manufacturers need to be more attuned to the brand, to tell the story and offer products that allow this differentiation through exclusivity. This is especially true in North America. Retailers need to think differently about supplier engagement too.  As Doug Baker (FMI) put it at the recent Velocity My [Private] Brand conference in Charlotte, USA, retail private brand teams need to operate “next generation supplier collaboration”.

For example, retail private brand buyers need to look beyond price to more strategic partners and those products that allow differentiation through exclusivity. It is less about cost (which will always be important) and more about capabilities.

We work with private brand retail teams on a wide range of supplier engagement projects, to drive successful brands. For example, to share information on product quality (supplier and product KPI). To support strategic initiatives such as Walmart’s Jobs in U.S. Manufacturing Portal (JUMP), or award-winning sustainability initiatives.

But one I am personally very proud of is the way Woolworths Australia has transformed its supplier engagement using Affinity™. This is demonstrated by the recent announcement that Woolworths is deepening its partnership with own band suppliers, launching a centralised approach to dealing with FoodCo suppliers and a new online capabilities survey

James Butcher

james.butcher@s4rb.com

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