Consumer preferences and demands have changed. Data show that Millennials and Gen-Z are not as brand loyal as the Boomer generation. In fact, according to a 2019 research report by IRi, 99.9% of all shoppers had purchased private brands. Companies like Trader Joe’s and Whole Foods have taught consumers that private labels are just as good if not better. In fact, successful private brands like Target’s Good and Gather, Amazon Basics, Costco’s Kirkland brand and others had grown to $158.8 billion by 2020. Private label brands are now legitimate. And while the primary reason for purchasing private labels is cost savings, premium private label brands are highly rated in quality by the younger demographic cohorts.
Another growing consumer trend is the demand for better visibility around products and sourcing. On many brand websites, consumers can compare brands, costs, availability and sustainability compliance. This key driver has increased transparency in materials and ingredients, product safety across sourcing, rising ethical concerns and brand sustainability. As a result, manufacturers must continue to provide transparency surrounding their products including visibility into sourcing.
The explosive growth in private label brands is great news for companies with private label brands or for others considering a private label launch. But for historically supply-oriented retailers, entering manufacturing brings a suite of challenges that extend from product development to marketing and launch. Retailers must meet the challenge to develop newer and safer products while addressing consumers’ experience and visibility expectations by moving private label management to the cloud.
Move Private Label Brand Management to the Cloud
A private brand’s supply chain is vast, complex and difficult to track, even at the best of times. Mandatory legislative requirements – global or local – make it more risky and more complicated to track products sourcing and ingredients. Add to that consumer expectations, and the need for cost effective solutions that reduce the brand’s resource requirements, increase productivity and speed to market becomes necessary to meet all these goals.
An effective solution is to use an integrated compliance system that can address product lifecycle, specifications, label management, traceability, quality management, integrated regulatory compliance and enablement of visibility and control. These integrated solutions, such as Oracle’s Brand Compliance platform, can reduce cycle times for bringing the right products to market, develop and manage private-label brands, incorporate sustainable supply chain practices and manage the end-to-end product life cycle.
An integrated compliance system helps brands seamlessly manage brand compliance. These cloud-based comprehensive software solutions address commerce, POS (point of sale), loyalty programs and RMS (retail management system). They are completely turnkey with QMS (Quality Management System), recall handling and sourcing compliance. And they address PLM (product lifecycle management) including LIMS (laboratory information management system) while providing robust analytics from an integrated data pool. In short, a brand compliance management cloud platform can simplify the development process and optimize costs to benefit both private label brands and consumers.
The Way Forward for Retailer with Private Label Brands
This can be, and has been, done with great effect. Wipro has helped marquee retailers seamlessly integrate their IT architecture and streamline their processes, enabling them to improve the quality and accuracy of data and increase their speed of new product development and delivery. In one instance, a UK based wholesaler saw a 52% increase in speed to market for products by automating the integration of products from a data pool. In another, a large retailer improved its data accuracy from 93% to 99% by using automation across various data pools such as ingredient origins, merchandising, and supply chains.
For retailers with private labels, the way forward is to adopt an integrated, cloud-based brand-compliance solution to help manage and deliver new private label products to market. This will enable retailers to deliver products that meet customer demands while improving the company’s agility, transparency, compliance and data accuracy.
About the Author:
Solution & Innovation Head, Oracle Retail, Wipro Limited
Alexandra has more than 20 years of experience in IT and retail. She has worked with retailers in all sectors to drive business benefit from solutions and innovations by leveraging the Oracle Retail platform.