Price versus provenance: the challenge facing retailers

There is a lot of discussion about the need for transparency in the supply chain. The 'clean labelling' initiative continues to grow, with the driver for clear and unambiguous labelling, simpler 'pure' ingredients and clear provenance.

S4RB Retail Director Penny Coates and US CEO Kieran Forsey recently presented a white paper co-produced with FMI on the subject in North America, where trends appear to be following a similar path to the one we've seen in the U.K.

But what is most important: price, or provenance?

A recent representative poll of 2,500 consumers by EY showed 68 percent of consumers believed that ethical behaviour was important when shopping. The good treatment of employees, ethical supply chains and the treatment of workers and animals were described by consumers as being “critical” factors that went into purchasing decisions.

So as a brand owner, is that where I must focus? Well, the study clearly says it cannot be ignored, but importantly the same study also confirmed that "ethically sourced products only feature in the top three purchase considerations for seven percent of consumers,” confirming that price is still more of an impetus than provenance for most people.

There is, however, a danger of looking at a single statistic in isolation. I remember when Sainsbury's launched their sustainability vision for 2020, it was driven by a similar move towards ethical and sustainable solutions. This was then re-directed when, several years later, it was put into context that less than ten percent of those same customers would modify their buying behaviour, with price being more important.

In my view, Sainsbury's were right to change tack; it is not all about sustainability. As EY have shown, it is not all about ethics or provenance, but importantly it is not all about price either.

It is about value; a hard to define measure of quality and values (including sustainability and provenance) at a fair price and this is where brand owners need to really determine what their brands stand for.

In the world of retail private brands, it’s not just the brand value of the retail name over the door that retailers need to consider, but also the value of each own brand range.  It is here where I believe our approach to 'one view' of product performance is so pivotal.  It combines the ultimate measure of performance being sales, against complaints, consumer feedback and supplier performance to allow the retail own brand teams to deliver process, solutions and ultimately products that deliver on the own brand values that deliver for their customers.

Tags: Customer experience, Product insights, Sustainability, Consumer trust

James Butcher

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