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Private Label

A Group Contribution from the Revionics Consulting Team

If any of us had a crystal ball, we would most likely be enjoying a relaxing life somewhere, as we would have foreseen the recent changes in our economy and been better prepared to weather the storm. But since most of us are not privileged to that mystical tool, let’s talk about a few things we should all have on our immediate radar and be planning for as we look to the coming months.

Private brands continue to gain foot hold

Monday, 15 February 2010 00:00

By: Mike Isom,  Managing Principal Consulting, Revionics, Inc

For the past 2 years, retailers’ private brands have been the topic of much discussion. In the failing economic conditions we are experiencing, many consumers look to private brands as a way to stretch their budget. Retailers have reacted by continuing to introduce additional offerings and manage favorable pricing positions that have also been one of very few bright spots in a mostly bleak sales and profit battle field.

By: Christie Frazier-Coleman,  VP Strategic Pricing & Consulting,  Revionics, Inc

Are you brand blocking your private label or doing the compare and save strategy?  With price optimization we tend to encourage a frequent review of base pricing, and in particular, a heavy scrutiny on private label versus national brand price relationships.

How does this impact merchandising decisions?   For example, in the past, best practices dictated that private label should be merchandised immediately to the right of the leading national brand. This is typically done during the category review process on a bi-annual or annual basis.   Some retailers are now recommending that a private label should follow the national brand with the lowest base retail to set a price gap. Does this force the retailer to change his schematic as often as he changes those relationships  or are the old merchandising rules obsolete? Are the old merchandising rules becoming obsolete?