Collaboration between retailers helps meet new industry challenges

16th January 2015
From Chris Morrison

Two business men shaking hands

The last year has presented a number of challenges and complexities on the fluctuating private label market; for example, a growing focus on regulatory compliance, and the search to foster greater consumer trust. One of the key dilemmas in 2014 was how to encourage customer loyalty while meeting new demands, tastes and higher expectations of service. In response Trace One has led a number of exclusive Private Label Clubs across Europe. Partnering with the British Retail Consortium in the UK, these clubs bring together key decision-makers from leading retailers. Attendees have used the opportunity to network and engage in discussion on key trends in private label led by guest speakers such as Coop Switzerland’s Head of Marketing. While there were many interesting discussions, some of the main areas of interest highlighted so far include:

Diversification in European private label market

According to a report from Information Resources, Inc. (IRI), private label value market share in Europe dropped by 0.1pt in unit and value compared to a year ago. However, the picture is not all doom and gloom: Olive oil company Agro Sevilla claimed that while private label is currently a very flat market in Spain, there are some growth niches such as health and personal care products, convenience products and fashion goods that could still be lucrative. The picture is a very different one in the UK, where private label is up by +0.2 points in value share and +0.3 points in unit share. However, the retailers we spoke to have not been resting on their laurels: part of this growth is attributed to discounters like Lidl remaining particularly strong in private label and continuing to grow. Responding to increased competition, innovating across private label ranges and further improving the quality of products were all front of mind for retailers we spoke to.

Food safety

Changing EU regulations is also a key theme for retailers, with how to best regain trust and make the best of the economic recovery a common concern. FIR regulation in particular has led to retailers having to overhaul entire ranges to meet new requirements on the provenance of food products and verify primary ingredients in processed meat products. Food safety is an ongoing topic under debate that also looks to the new challenges ahead. Another issue highlighted was how to anticipate the emerging risks in the world of food safety, one example being how we can look past ingredients and stop viruses infecting the supply chain without the benefit of mainstream testing.

Consumer engagement

In Spain, AGR Food Marketing has shared its views on the current market and the opportunities for retailers in engaging with customers through private label. ‘Marketing 3.0’ as they describe it uses social networks as drivers of growth and leads to consumers feeling buying a private label involves them in a major social change. A good example is creating a series of fun games for families who want to get into healthy eating habits. Coupled with transparency and a focus on delivering quality, industry experts have shared their thoughts on how they can drive revenues in private label in the year ahead and further into the future.

Bright prospects

All in all Trace One’s Private Label Clubs have given an insight into key issues and created a forum for open discussion. We look forward to meeting our partners at our 2015 Private Label Clubs and continuing these discussions in the year ahead.

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