Driving shoppers into supermarkets with national product brands has historically overshadowed food retailers' efforts to drive shoppers into their stores through their own branding efforts, brand marketers said. However, as retailers reach out to their shoppers with new branding strategies, they can look to consumer packaged goods manufacturers to add value to the in-store and shopping experience.
"Branding for supermarkets awaits a new kind of relationship between the retailer and branded suppliers," said Bill Bishop, principal, Willard Bishop Consulting, Barrington, Ill., "It's one in which the branded suppliers' promotions support and reinforce the retailers. If it doesn't do that, then it will be very hard for supermarkets as we know them today to brand."
Mark Baum, executive vice president, Grocery Manufacturers Association, Washington, said CPG suppliers must take a holistic approach to the category rather than focusing on selling their own portfolio of brands. That means looking at it consumer-centrically in helping the retailer plan across the entire category, including the retailer's store brands, and across the spectrum of consumers. "The holy grail is to get consumer orientation down to the store level. That is where the moment of truth occurs and consumers make their purchase decisions," he said.
Baum said the ideal is to have a customized store-level schematic for the consumer shopping that store. He mentioned Target as a company that has been successful at doing that. In order for this to happen more consistently with food retailers, there needs to be more sharing of customer data and collaboration, he said. This is how to develop co-marketing, co-branding and non-traditional programs that add value to the retailer's proposition.
David Frey, regional director of marketing, PromoPoint Marketing, Tampa, Fla., a promotion company owned by Advantage Sales and Marketing, Irvine, Calif., said they listen to retailers and try to meet their objectives by recommending marketing programs that add value and are compatible with their goals. Retail-specific co-marketing examples include providing a nutritional expert through a registered dietitian who can offer information about health and wellness; putting together a discount program sponsored by multiple manufacturers, offering cost savings to the consumer and incremental dollars to the retailer; recipe booklets; charity fund-raising programs; and ethnic marketing.
Ted Taft, managing director, Euro RSCG Meridian, Westport, Conn., sees retail branding playing out on three levels.
- The first is promotion, an area with which retailers are most familiar. Here retailers work with sales and marketing companies on co-marketing deals in which promotional funds are used to benefit both the manufacturer and retailer.
- On level two, Taft sees retailers re-evaluating their traditional focus areas. At this level, what drives the business is not necessarily price and promotion, he said, but speed to market with Rx-to-over-the-counter switches, category adjacencies or better variety.
- Few retailers are doing branding on level three, he added. This involves a strategy that adds real value to the shopping experience. Taft cites Boots, the United Kingdom health and beauty manufacturer that has successfully partnered with Target and CVS in the beauty aisles. Similar co-partnering deals have been seen at food retailers as well, such as Wild Oats testing a natural boutique in several Stop & Shop stores.