Retail Management

INTRODUCTION
Private labels are brands owned, merchandised and sold by retailers themselves. Private label goods and services are available in a wide range of industries from food to cosmetics to web hosting. They are often positioned as lower cost alternatives to regional, national or international brands. For example, Shoppers Stop has several in-house brands such as STOP, Kashish, LIFE, Acropolis etc

Why private labels??

Burgeoning Middle-class Changing Lifestyle Consumer Choices Regional Preferences Enter early birds Critical factors for high-end users Market Expansion

TYPES OF PRIVATE LABELL BRANDS

1. Store brands The retailer's name is very evident on the packaging. 2. Store sub-brands Products where the retailer's name is low-key on the packaging. 3. Umbrella branding A generic brand, independent from the name of the retailer. 4. Individual brands A name used in one category, this is only used to promote a "real" discount product line. 5. Exclusive brands Again a name used in one category, but to promote "added value" products within the category

EVOLUTION OF PRIVATE LABELLS

FIRST GENERATION TYPE Generic SECOND GENERATION Quasi-brands THIRD GENERATION Umbrella brand Big category products Quality in line with leading brands FOURTH GENERATION Segmented private label brands Imageforming groups Superior quality

CHARACTERI Perceived as STICS lower quality Price to attract customers

Average quality Price is the major criteria

SUPPLIER

National Selfmanufacturers(p manufacture artly) in own plants

National manufacturers (mostly)

International manufacturers

INFLUENCERS IN PURCHASE OF PRIVATE LABEL BRANDS

9% 10% FRIENDS FAMILY SALES PERSONNEL IN-STORE STORE ATMOSPHERE PAST EXPERIENCE

22% 36%

5% 9% 9%

PRIVATE LABEL- PRONS & CONS

Exclusivity and differentiation Better margin Better control in delivery Brand equity Freedom in pricing strategy Increase in bargaining power

PRONS

Inventory risk Higher R&D expense Higher marketing expense No markdown from branded suppliers If product fails, it will create negative image Quality control, complex production issues

CONS

GLOBAL RETAIL SCENARIO

Globally, private labels contribute 17% of retail sales with a growth of 5% per annum. International retailers like Wal-Mart of USA and Tesco of UK have40% and 55% own label brands representation in their stores, respectively.

RETAILER
CARREFOUR TESCO TATA GROUP(TRENT) METRO

PRIVATE LABEL
Alfredo macroni & cheeese, nice tomato sauce Tesco finest, Tesco Organic, Tesco value Westside, Landmark etc ARO Sigma Alaska etc

WALMART

Sam's Choice Great Value Parent's Choice etc

With more than 12 million retail outlets, India has one of the highest retail densities in the world. Retail Reports forecast that the total retail sales will grow from US$ 353 billion in 2010 to US$ 543.2 billion by 2014. Private label brands constitute 10-12% of organized retail in India. The initial growth of private label brands in India has been limited to certain categories like grocery and apparel, but later it expanded into many other categories as well.

INDIAN RETAILERS
RETAILER PRIVATE LABEL CATEGORY

RPG Spencers Future Group Bharti Retail

Smart Choice Tasty Treat Easy Day

Food & Grocery Food & Grocery Fruits and vegetables, groceries and staples, consumer durables Health & Beauty, Food &Grocery Apparels Food and Grocery

Tata- Tesco Star Bazaar Shoppers Stop Reliance Fresh

TESCO daily, Daisy, All about men STOP, Kashish, LIFE, Acropolis Reliance Select

OBSERVATIONS/ FINDINGS FROM RETAIL STORES IN INDIA 1.Store space Nearly 40-50% of the store space was dedicated to store brands. These products shared the shelf space with other branded products.
2. Number of store brands This is especially for apparel. Shoppers Stop has several in house brands like STOP, Kashish, Remika etc. 3. Price tag: These products were priced substantially lower than the other brands. 4. Catered to a number of categories: In these stores, the store brands were not limited to a particular category. For e.g. in a Reliance store, it extended from pulses to spices, noodles and even diary products

WALMART

About Walmart
The company was founded by Sam Walton in 1962, Incorporated on October 31, 1969 It is headquartered in Bentonville, Arkansas. Slogan Save Money Live Better,
Walmart operates over 4,000 stores world-wide in 15 countries and employs more than 2 million workers

Private labels
About 40% of products sold in Walmart are private label store brands, Walmart began offering private label brands in 1991 with the launch of Sam's Choice, a brand of drinks produced by Cott Beverages exclusively for Walmart.

 Sam's Choice quickly became popular, and by 1993 was the third most popular beverage brand in the United States. Other Walmart brands include Great Value and Equate in the US and Canada, and Smart Price in Britain. Wal-Marts ambition for its private label brands is expanding. They are targeting low and fixed-income customers. One of the main strategy they using is EDLP They are more concentrated in their packaging

Industry Founded Headquarters Key people Services

: Retail : 1959 : Levallois-Perret, France : Lars Olofsson (Chairman and CEO) : Discount, grocery and conveniencestores, cash and carry, hypermarkets Revenue : 90.10 billion Operating income : 1.836 billion Profit : 433 million Total assets : 53.65 billion Employees : 471,755 Website : www.carrefour.com

Carrefour
Carrefour is the worlds second largest and Europe's largest retailer of groceries and consumer goods. The group operates four main formats, hypermarkets, supermarkets, hard discount, and convenience stores and carries 87 items on the shelf.

A growing economic downturn spread to France, bringing with it increased unemployment and resulting in more priceconscious customers. This in turn has made room in the French retail market for increased penetration.

Carrefour launched its own entry level price-point brand, simply called No.1
It signals a broader movement towards price discounting This brand is being introduced in all of Carrefours retail formats and in all of their international markets.

Cooking Oil Canned Fish Frozen Vegetables Canned Tomatoes Rice Cold meats Bean & Ground Coffee Jam Fruit Juices Ice-cream Mineral Water Fabric Conditioner

They also provide food and non-food items;

Carrefour LIGHT Carrefour KIDS Carrefour COSMETIQUES Carrefour EXOTIQUES Carrefour BABY Carrefour MEN Carrefour HOME

Best practice for food, drink and personal care manufacturers Strengthen its commercial dynamics through price roll backsincluding the introduction of Number One products Allows retailer to leverage its scale Clusterisation which helps to address local customer needs more effectively (clusterisation refers to the segmentation of stores-A,B.C according to the purchasing power of the local trading area) It intends to keep in its PLs in these segments- bio, ethnic, ethic, eco-friendly and regional.

Merchandising Promotions Shopper Knowledge Checkout Data Prototyping/ R&D Assortment Supply Chain Innovation

Unified design system- products carry the carrefour name Eco- friendly PCI (Carrefour Product International) products in France carried 11 different languages.

According to the recent studies, Private Labels have enough brand equity to launch and sustain successful innovation. The reason behind this result are related to the increased familiarity and experience with private labels, along with a positive consumer perception of the price utility now provided by private labels even in new products.