PLMA World Of Private Label 2019: Take Five
Ahead of this year’s PLMA World of Private Label trade show, Jon Wright, head of EMEA retail insight at IGD, has outlined five trends that he believes will drive private label and brand evolution. This article first appeared in ESM Issue 3 2019.
After a period in which retailers have approached private labels in similar ways globally, strategies are evolving and becoming more specific. Businesses are adapting their strategies to increasingly meet their shoppers’ needs and fit ranges within wider strategic aims.
Drawing on IGD’s global retail trends for 2019, five core themes stand out as key to shaping development in private-label ranges in the grocery retail market over the next 12 months and beyond. Let's explore how these trends will drive private label and brand evolution, and what the implications will be.
Data Dictates The Way
Retailers are bringing the benefits of data to life for shoppers in-store, be it through sharing product reviews or providing reassurance about food safety and security. Indeed, Italy-based Unes’ premium-priced banner Il Viaggiator Goloso has enabled electronic shelf-edge labels to show online product reviews, giving shoppers confidence in what they’re purchasing in-store. Others are using insight from their websites to feed into their new product development cycles.
Brands are combining artificial intelligence (AI) and technology to offer more personalised solutions, especially when it comes to health and wellness. This is delivered in a variety of ways, including through targeted advice and new product development. We are also seeing some brands collaborating more closely with retailers, pooling collective data and capability to deliver product innovation in different ways and to do so more effectively.
Doing Good Is Good Business
Companies are putting ‘doing good is good business’ at the heart of their strategies to create a positive impact on the wider environment and society. This is being delivered through broader partnerships, new product development and showing time and place relevance.
Strategic shifts towards making private ranges more sustainable can help drive a more positive public image and perception of private label. Reducing plastic, improving animal welfare and expanding organic ranges are among the tactics we’re seeing retailers adopting as part of private-label product development goals. For instance, in Denmark, Lidl has introduced 300 new products over recent years, with a significant number of these being organic.
Companies are setting even higher standards on sustainability topics to create a positive impact on the environment. Brands are pushing the boundaries in new ways, be it through broader collaborations or putting sustainability at the heart of new product development. We’re also seeing companies focusing on how they communicate good deeds as being just as important as profits, creating meaningful impact and driving positive perceptions.
Activating private-label campaigns and promoting specific ranges consistently across channels is becoming increasingly important as retailers look to build an omnichannel shopping experience. Retailers are also investing in convenient ranges and fixtures to highlight mission-focused private-label products.
Albert Heijn in the Netherlands, for example, is continuing to push the boundaries in food-to-go innovation. Clear mission-based zones highlight new products, while self-serve fixtures drive efficiencies.
We’re also seeing brands partner with retailers and technology providers to help maximise the appeal of physical stores. In some cases, trials may focus on a specific category enhancement, although if successful, these may have store-wide implications for the future. Other innovations may extend to new store concepts too.
Help Me Be Healthy
Trends towards specialist diets including vegan, vegetarian and gluten free are set to continue. We expect private-label product development here to focus on convenience and meal solutions, as well as on targeted core grocery items. Tesco in the UK has doubled the number of products in its vegan Wicked Kitchen range, which launched in 2018. During that same year, sales of chilled vegan food increased by 25% at Tesco. The retailer has said that flexitarianism is on the rise and is driving demand.
More widely, retailers are investing in cleaner private-label ranges, considering a variety of different product attributes. For instance, this may include a reduction in synthetic ingredients.
Brands and private labels are introducing organic, free-from and health-focused lines globally. Collaborations and partnerships widen the availability of private-label products and brands, particularly through the growing number of online marketplaces and export opportunities.
We’re also seeing investment in ranges to meet evolving health, wellness and lifestyle trends. This may come via range extension, as well as new product development at both leading brands and start-ups. An increasing number of accelerator programmes backed by leading brands have also emerged, some with a health and lifestyle focus.
This strategy helps brands stay close to the latest trends, with innovation in this area being an opportunity to drive growth in a competitive market.
Convenience is being constantly redefined as retailers continue to invest in meeting shopper needs in new ways, with developments filtering through to private label. Online, the growing trend towards shoppable commerce helps to satisfy immediate purchase needs and can encourage seamless impulse shopping too. Meanwhile, in-store partnerships and technology are helping retailers differentiate the customer experience and maximise reach of private label.
Le 4 Casino in Paris is a new concept store full of digital innovation and multichannel touchpoints. QR codes on electronic shelf labels allow shoppers to view product information quickly and easily on their mobile devices.
While we have seen some companies innovate with automatic reordering, which locks in loyalty and provides added convenience, a growing number of brands are experimenting with mobile, video and social commerce.
Livestreaming solutions are an effective way for brands to attract and grow their target audience, while also driving impulse purchases. This appears to be especially popular in China, although it may be an opportunity elsewhere too.
The combined popularity of social media, mobile and video gives brands growing opportunities to connect with and inspire more consumers in an increasingly convenient way. Companies should innovate using these means and channels to reach wider audiences.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.