Two Words, One Answer.
Private Label
 Private Label - Toddler Girls Bib Snowpant, Strawberry Patch Pink (Size 2T) $16.90 Private Label - Toddler Girls Bib Snowpant, Strawberry Patch Pink, Adjustable Shoulder Straps With Clips, Elastic At Chest, Zip Front, Elastic Storm Cuffs Inside Leg At Ankles, 100% Polyester, #19570  Private Label Strategy: How to Meet the Store Brand Challenge $35.00 Worldwide private label sales in 2007 were $1 trillion, and growing. This has been abetted by consolidation within the retail industry - eg. Wal-Mart's $126 billion in private label sales exceeds Nestle's (largest manufacturer) total sales of $75 billion. Apparel, packaged goods, electronics, financial services, books - all are involved. Private labels are mostly copycats, and don't face the risks and costs of new product introduction. Even without attaining great success, they provide leverage vs. manufacturers. Walgreen's averages $677/square foot in sales, with prescription drugs making up 63% of those sales. Retailer gross margins on private labels vs. manufacturer brands are about 25-30% higher, but may be less profitable due to slower turnover. About the only takeaway from this book is that private label sales are large and growing, and the major manufacturers' clout and profits suffer accordingly. There really are no good counter-strategies, except to reduce costs and perhaps spiff up packaging, advertising.  Brands vs. Private Labels: Fighting to Win $6.50 How real is the private-label threat to branded products? What should national-brand manufacturers do about it? On the one hand, manufacturers have reason to be concerned. There are more private labels on the market than ever before; collectively, unit share of store-brand goods place first, second, or third in 177 of 250 supermarket product categories in the United States. But many manufacturers have not fully recognized two important points in considering this threat. First, private-label market share generally goes up when the economy is suffering and down in stronger economic periods. Second, manufacturers of brand-name products can have significant influence on the seriousness of the challenge posed by private-label goods. It is difficult for managers to look at a competitive threat objectively and in a long-term context when day-to-day performance is suffering. But the authors strongly advocate keeping the private-label challenge in perspective.  Private Label - Mens Fleece Slipper, Navy (Size XL11-12) $5.90 Private Label - Mens Fleece Slipper, Navy, Plaid Fleece Footbed, Rubber Non Skid Sole, Size Size Small = 5/6 Medium = 7/8 Large = 9/10 Extra Large = 11/12, All Man Made Materials, #19578 |
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