By Ron Romanik
The word "value" when applied to a "value brand" had a relatively narrow meaning in the mid-20th Century. Typical private label products were priced significantly lower than their national brand competitors, and consumer expectations of quality or taste were, naturally, lower.
The condensed evolution of the private label industry has turned this paradigm upside-down in the last 10 years. Today's consumers expect high quality from many of their grocery private label brands, and the quality of private label package design has risen to match the expectations of consumers. For private label, the package is often the only sales or marketing vehicle, and often represents the store or retail chain as well.
In a struggling economy, consumers look for more value in the commodity products that they regularly buy as well as in specialty items at more premium prices. The trick with private label package design is creating expectations equal to the quality of the product delivered. Consumers are more willing than ever to experiment, try different options, and look for value in every corner of the store, but they will remember a disappointment.
Today's shoppers are also more likely than ever to "segment" their shopping, spreading out their purchases among a number of retailers that offer value in different categories. Successful private label brands, therefore, are remarkable because to some degree each SKU carries the weight of the retailer's reputation. Large chains like Costco, our Cover Story subject, have succeeded because the high expectations of their loyal consumers are never betrayed. Costco's package design is exemplary and strategic because it sets an appropriate level of expectation based on the product category, and then delivers on the brand promise of high quality at a value price.
On the other end of the spectrum is the East Coast premium grocer Wegmans, also examined in this issue. The private label package design at Wegmans often creates gourmet or premium quality expectations in their shoppers. The chain has created a true "destination brand" that promises the highest quality products, an exceedingly pleasant shopping experience, and the possibility of new product discoveries. Again, the package design is appropriate to the category and the product while the retailer guards its most important brand building asset—trust.
Ron Romanik
Editor-in-Chief
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