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Retailers Give Private Labels More Public Profile

Retailers Give Private Labels More Public Profile

Like so many retailers vying for shoppers' loyalty these days, Food Lion is aggressively promoting its private-label lines.

But rather than offering automatic store-brand markdowns on staple items like Publix has done, or serving up tastes of private-label meal solutions à la Wegmans, the retailer is making shoppers work for their corporate-brand reward.

Before earning an Internet coupon for $1 off any product in one of Food Lion's seven private-label lines, visitors to the retailer's website must win a matching game designed to build familiarity with the six store brands that don't include the Food Lion name (see related story on Page 27).

“Get to know your Food Lion Brands and enjoy quality at a much more affordable price,” reads the site.

Players use mouse clicks to flip cards one at a time to reveal each line's brand logo until all six matches are made, and a printable coupon is presented. The offer is good for a different line each week.

Although it is unclear how many coupons have been redeemed, the feature has received 90,000 hits since its launch last month.

The Food Lion game is clever in that it helps improve its overall price image while defining the private-label status of its lines.

The idea is that shoppers will commit to memory the Healthy Accents, Home 360, Smart Option, On the Go Bistro, Nature's Place and Taste of Inspiration names, and attach to them the lower-price perception that brands which are unmistakably private label are benefiting from so much these days.

Although price tags speak for themselves, there seems to be a bit of consumer confusion about whether store brands that don't include a retailer's name are national brand or private label.

How else could the results of Wisner Marketing Group's Center Store Renewal study be explained?

More than half of shoppers polled (57%) for the study said that private-label items are pretty much the same from one retailer to the next.

It seems that some respondents may have only been considering lines that bear a retailer's name.

Oftentimes chains reserve banner names for lines comprising items with national-brand equivalents, and use names like Eating Right or On the Go Bistro to help define a line's uniqueness.

“Most respondents thought that whether I buy this retailer's private-label brand or that [retailer's], it's basically the same as buying Tide from two different stores,” said Jim Wisner, president of Wisner Marketing Group. “So while retailers still reap economic advantages [margins that are 10% to 12% higher than those realized on a national brand's sale], they're losing the customer loyalty factor. That's why everyone is moving so aggressively” to promote the exclusivity of private-label brands that fill a dearth in the market.

Retailers like Food Lion have realized that effectively doing so now is especially important since cash-strapped shoppers are consolidating shopping trips and turning to mass merchants.