Promotions on Parade
Consultant offers tips to drive private-label product sales
Published in CSP Daily News
CHICAGO -- They say imitation is the most sincere form of flattery. With this in mind, grocery consultant Herald Lloyd presented 10 of the Best Private-Label Promotions Ever during the closing supersession at the FMI Show held in Chicago this week.
Upon receiving this assignment from the Food Marketing Institute, Lloyd, president of H. Lloyd & Associates, noted, I couldn't find a lot of promotions and certainly not a lot of clever ones. However, he noted that the potential of private-label products make them ripe for high-profile promotions.
Fifty of the top 100 Wal-Mart items are private-label products, he said. Companies like Kroger, Wal-Mart and HEB, they get it with private label. Not everybody does.
Noting the increased margin available on private-label products and that there is evidence everywhere that private label is as good or better than its comparable national brand products, Lloyd offered this list of 10 great private-label promotions that he thinks most retailers could steal or borrow from:
Websites. Using, Kroger's site as an example, Lloyd said the company extols the virtues of its exclusive brands. Educated people go to websites to get more educated, and Kroger does a great job [of that], he said. The result is Kroger's private-label products account for 24% of the chain's sales vs. the 15% national average. Store donations. Richmond, Va.-based Ukrop gives consumers an added incentive to buy its private-label products by donating 3% of all such purchases to the charity of the shoppers' choice. Vending machines. Citing Safeway as the example, Lloyd said soda vending machines outside the front door provide great encouragement to sample a private-label product at a low price 25 cents. You're already showing the value proposition. They throw their quarter in there and they say, This is pretty good', said Lloyd. Now they know what it looks like, they know what it tastes like, and they know it's a value. Shelf talkers. Using signage on a shelf or even on the floor is a quick and easy way to draw a customer's attention to private-label products, Lloyd said. He recommends one shelf talker per 10 feet of shelf space. Shelf extenders. Rather than lump private-label products in with their brand-name equivalents, Lloyd said putting these products on shelf extenders in the aisle or suction-cup selves on cooler doors gives them a higher profile. Equal facings. One common mistake Lloyd said retailers make is stocking private-label items based on their turn rates. Instead, he suggests giving private-label brands equal facings to their comparable major-label brands. I want to give my exclusive brand an advantage, he said. If people see one facing [of a private-label brand] vs. five [of a major label], they think, It can't be that good.' Right-side placement. About 90% of the population is right-handed, Lloyd noted. Placing private-label brands to the right give them yet another advantage. Salad-bar exposure. For stores with salad bars, Lloyd suggests placing private-label condiments in with the national brands, giving them equality by association. It also opens an opportunity for sampling. Demo tie-ins. When setting up a sampling station, Lloyd suggests demonstrating at least three products at a time, two name brands and one private-label brand. Again, equality by association. Bag-full of savings. The 10% off everything you can fit into this grocery bag is a supermarket standard. Lloyd suggests expanding on it to include exclusive-label products only and bumping the discount up to 25%. The best thing you can do is get them to try your products, he said. Once they realize the quality and understand the value, they'll be coming back to you again and again because it's the only place in town they can get those products.