TUCSON, Ariz. -- Manufacturers need to provide retailers with more information on the attributes of private label to convince them to feature private-label products more prominently in their ads, a retired retail corporate-brands executive told the Private Label Manufacturers Association's annual meeting and leadership conference here.
According to Ron Carlson, who oversaw corporate brands at American Stores Co. before it was acquired by Albertson's, Boise, Idaho, retail organizations are battlegrounds for advertising, promotions, store displays and shelf placement, "and while there may be 10 people in on a decision, probably only one is advocating private label," he said.
"So there's a need to provide the others in the decision-making group with facts, figures and information about the attributes of private label, and the more you [manufacturers] can provide, the more it will enhance your ability to communicate."
However, many retail executives prefer not to have a lot of private-label products in ads or promotions, Carlson said. "The mind-set for a lot of people is that store brands do not draw customers like national brands and have nothing to do with promotional dollars.
"The biggest challenge for private-label advocates is the idea that national brands are a better draw because customers recognize those brands. So what we need is more education of retail people on why store brands should be promoted."
Carlson also said the use of personal computers and the Internet are hurting the educational process by diminishing interpersonal relationships. "Building up personal relationships between buyers and sellers over 12 to 15 years just doesn't exist anymore," he said.
"Although there's still some personal contact, mergers are changing all that, and you might see three or four different people within a year's time. So personal relationships mean less today, and symbolic communications mean more, and selling methods must adapt to these changes."
The use of e-mail has complicated the situation for private-label advocates, Carlson added, noting that traditional weekly ad meetings are beginning to change. "Instead of sharing information around a table and advocating the inclusion of private-label brands, it is often done through passing around lists on e-mail. There were no more personal presentations, and I see that as a real challenge for the industry."
Carlson made his remarks during a panel discussion on a variety of topics. Among other panelists:
David Shanker, executive vice president of Information Resources Inc., Chicago, said the broader availabilty of shopping options gives power to the consumer and may create the need for traditional retailers to re-invent themselves to stay relevant.
"All businesses -- supermarkets, drug stores, convenience stores, club stores, category killers and e-commerce companies -- are competing for the same customers, and the lines between them are blurring," Shanker said. "As a result, retailers must think outside the box to attract customers."
That may mean forming partnerships with manufacturers to offer products in new ways, he said. But it may also mean that more pure e-retailers will join forces with brick-and-mortar retailers or that manufacturers decide to go outside the traditional supply chain and sell directly to consumers, he added.
Arthur Handler, an attorney for the firm of Handler & Goodman, New York, said a recent decision by the U.S. Supreme Court in a trade-dress infringement case is good news for PLMA members "because it levels the playing field. Instead of extending trade-dress protection to product configuration, it represents a growing recognition by the courts about the role of private label and the benefit to consumers of having alternative choices."
Under the court's ruling, a company seeking to obtain protected trade dress in a product design or configuration must prove secondary meaning -- that consumers associate the shape or configuration with a single source of manufacture -- "which should result in substantially less litigation about product configuration," Handler said.
