I will admit unashamedly that I’ve stolen this title from Doug Baker’s (VP at FMI) closing presentation at this year’s Velocity event. Alongside Kroger, Wakefern, Walmart and others, Doug discussed the pace of transition from private label to private brand and how this demands private brand teams to re-think supplier engagement and to practice “next generation collaboration”.
It's all about the brand
As Doug presented, in the past the majority of retailers associated with the term ‘private label’ and now over 80% have moved to refer to ’brand’. It could be: store brand; own brand; private brand; or, [retailer] brand. But they key word is ‘brand’.
When the goal was private label, the focus was on price, buying and margin. It was a transactional relationship, often supported by broker relationships.
With private brand the focus is loyalty. Products that win on more than price, drive differentiation, and from this brand loyalty drives volume and margin.
Moving beyond the transactional
However, this also means retail teams need to focus on strategic supplier partnerships not transactional relationships. Brands need to not just worry about costs and margin, but also quality, consistency, sustainability, clean label; all those attributes that consumers expect from a trusted brand.
This is a well-trodden journey; European retailers have done this for many years but this a newer challenge for most North American private brand retailers who are needing to re-invent their operations, their development processes, their quality management and probably most importantly of all, the way their internal teams operate and engage with suppliers.
As Doug put it, they need to practice “next generation collaboration”.
Supplier engagement = collaboration
This is what we call supplier engagement. Where tools such as AffinityTM allow private brand teams and private brand suppliers to work as ‘one team’ and collaborate around ‘one view’ of product performance.
One view of the NPD process and stage-gates. One view of customer feedback and complaints. One view of brand compliance with systems such as Oracle ORBC. One view of the artwork process with products such as Opal Artwork.
Next generation collaboration is about great transparency – the need to share data and collaborate around this ‘one view’.
There are three core pillars to good engagement:
If I am a private brand supplier, tell my what and why (communication), tell me how I am doing against the right KPI for your private brand (transparency). And importantly, tell me how to get better (support).
Empower your private brand suppliers to deliver winning products for your private brands. Can we help you practice next generation collaboration?