Don’t make non-food a non-starter

17th July 2014
From Chris Morrison

The BRC recently announced that online sales of Non-Food products in the UK grew 17% year-on-year in May. In comparison, in May 2013, growth was 9.9%, meaning there has been a marked increase. It seems there is a clear opportunity for retailers to drive margins by expanding their online non-food offerings, but with innovation retailers can also drive non-food sales across the board as well as help boost flagging food sales.

Pioneers like ASDA with their ‘Back to school’ clothing range have shown that non-food can both drive additional revenue and help engage with new consumers. Better collaboration and sharing between manufacturers and retailers now mean it is easier than ever to create entire ranges of products and quickly drive them to market. Ultimately, own label non-food products are created much in the same way as traditional own label food products, where suppliers are sourced, different specifications are provided, and manufacturers collaborate with multiple retailers. As such, creating non-food products doesn’t need to be a huge challenge. By working closely with manufacturers, retailers can focus on creating innovative non-food product ranges without having to learn a completely different business.

 

Non-food own-label can also provide a lucrative opportunity when it forms part of a coherent multichannel strategy. Retailers do not have to sacrifice store space allocated to food products, as they would in a ‘bricks and mortar’ store, and can mostly use the same supply chain processes they have used for food products.  While these are practical reasons to go online with non-food, there is still a lot of opportunity for physical stores.  Listening closely to changing consumer demands and driving new non-food products quickly to market, such as holiday clothing around seasonal promotions, can be an invaluable asset for retailers looking to stay one step ahead of established non-food retailers and other competition. Whether online or in store, retailers have the opportunity to embrace non-food and capitalise on this growing market.

Finally, there is no reason why a retailer cannot be successful across both food and non-food simultaneously. Improved ways of working mean that the processes for both can be managed with the same single overview and retailers can work with multiple manufacturers in both areas simultaneously. This encourages innovation, such as creating entirely new ranges and reinvigorating existing food and non-food product ranges. Targeting niche groups of consumers with ethical goods, premium ready meals and health-focused ranges can breathe new life into existing products and offer a broader range of tastes.

Non-food provides an exciting opportunity for retailers to explore new product ranges and engage with consumers. This innovative approach can also be applied to boost the success of food ranges and grow margins. As long as innovation is put first, retailers can have the best of both worlds.

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