Solution selling of private-label household cleaning goods is on its way to becoming a trend among retailers, both large and small, as the food retail industry becomes increasingly dependent on its own branded products to build consumer loyalty.
Some retailers are taking full advantage of the opportunity to develop high-quality brands that are strategically promoted and cross merchandised throughout their stores.
"We have a fully developed private-label program at Shaw's that represents 24% of our SKUs and accounts for 40% of our overall sales," says Bernard Rogan, spokesman for Shaw's Supermarkets, East Bridgewater, Mass. "But our household-cleaning brands were the first to evolve from a co-branding partnership that we formed with a company called SafeScience. We weren't just interested in developing private-label cleaning products that were inexpensive, we went looking for something that was environmentally sound too."
Searching for a manufacturer to develop additional products to add to its Shaw's Own Label line of household-cleaning items, the New England food retailer approached SafeScience, a Boston-based biotechnology company, with plans to create its line of environmentally safe household-cleaning products.
With its existing Shaw's Own Label brands, the retailer was able to promote the credibility of its products based on the reputation of the chain. But, when Shaw's ventured to develop environmentally safe brands, the focus shifted to SafeScience's remarkable reputation in the biotechnology field.
"It was important for us to enter into a co-branding partnership with SafeScience for the development of these products because although we have a credible reputation with our own brands, their credibility as a biotechnology company far surpasses ours when it comes to environmental issues," says Rogan. "We usually don't divulge who our vendors are because we take full responsibility for our products, but with these products, we knew our consumers would take comfort in knowing that SafeScience was behind them."
In September, 1999, after extensive testing and development, Shaw's SafeScience products were unveiled in stores and the retailer immediately began a solution-selling program to market its new brands to consumers.
Shaw's initial promotion offered consumers their choice of any two Shaw's SafeScience cleaning products for $5, ranging from general-purpose cleaners and liquid dishwashing soap to window cleaners and laundry detergent.
Continuing its cross-promotional programs, Shaw's frequently offers consumers a free SafeScience cleaning product with the purchase of any other SafeScience product. And, along with aggressive promotional tactics, Shaw's SafeScience brands are also permanently displayed on endcaps to catch consumers' attention before they enter the cleaning aisle.
"We have had our cleaning products displayed on endcaps since they hit the shelves in September and we intend to leave them there to attract our consumers to our Shaw's SafeScience brands," says Rogan. "We also have the same SafeScience products positioned on the shelves next to national brands and with our existing Shaw's Own Label brands. This gives our consumers a choice of comparing prices to the national brands."
While placing the Shaw's SafeScience items next to national brands presents a logical solution, having several private-label products within the same category forces them to compete with one another. However, Shaw's saw the acquisition of an environmentally safe product as an opportunity it couldn't pass up, regardless of the presence of an already-established private-label product on the same shelves.
"Having Shaw's SafeScience brands next to the national cleaning goods definitely detracts from those brands, which is what we were looking for," says Rogan. "And, yes, it also detracts from our Shaw's Own Label brands. But even if our consumers purchase one of our brands over the other, they are still buying our private labels and it becomes a win-win situation. Now they just have another reason to choose a Shaw's brand over the national brands."
Shaw's Supermarkets also caught the attention of the Ronald McDonald House in Portland, Maine. Impressed with the retailer's commitment to environmental issues, the organization has adopted the Shaw's SafeScience brands as its product of choice for cleaning and sanitizing its facilities. The firm also encourages its patrons to purchase the SafeScience brand at Shaw's for contribution to the Ronald McDonald House, further expanding Shaw's loyal base of consumers.
Although Shaw's SafeScience brands have only been on the shelves for six months, sales have far exceeded the retailer's expectations. With the exception of newly developed laundry detergent, each of the eight Shaw's SafeScience brands has outsold the top-selling national brands. Continually improving and expanding its label, Shaw's hopes to increase the sales of its new laundry detergent and develop additional household-cleaning goods to add to the SafeScience brand.
With its own line of private-label household cleaners, Norristown, Pa.-based Genuardi's Family Markets uses a successful solution selling program that has put its Genuardi's line of cleaners in head-to-head competition with some of the nation's top-selling brands. The retailer's private-label cleaning products first appeared on shelves nearly five years ago with the introduction of Genuardi's bleach. Intended to compete with Clorox, the No. 1 selling national brand at the time, Genuardi's bleach also carried a customer satisfaction guarantee that entitled the consumer to a free bottle of a national brand of bleach, compliments of the supermarket, if the consumer were not completely satisfied with Genuardi's product.
"We are definitely fussy about what household products our name goes on and we set extremely high standards for brand rollout, using quality as a focus," says Frank Puleo, director of merchandising services for Genuardi's. "We searched for a manufacturer who was capable of producing a bleach product that met the quality of other national products we were competing against, then we sent several products to our labs for testing before we chose the right one. This process gave us the confidence that our Genuardi's brand of bleach was of the highest quality."
With a strong confidence in the quality of its first private-brand cleaner, the retailer continued to develop additional Genuardi's products to add to its household-cleaning aisle. Today, the retailer has a number of Genuardi's brand household goods ranging from ammonia and window cleaner to laundry detergent and fabric softener.
In competing with brands such as Clorox and Tide, Genuardi's has taken a straightforward approach by boldly advertising its private labels with direct price comparisons to the national brands. "When we promote our bleach, we typically run ads comparing it directly to Clorox so our customers can see the benefits of purchasing our brand over the national brand," says Puleo. "Our consumers have come to trust our private brands in the household-cleaning category and know that they are top-quality products, but we also like to show an actual cost comparison in print so they can see how much money we can save them too."
Genuardi's continues this direct approach on the shelves, merchandising Genuardi's brands side-by-side with the highest-selling national brands. The stores also hang shelf tags between the Genuardi's and national brands, revealing the exact price variation between the two.
"It's very difficult to convince a consumer to switch from a national brand to a private brand if they have a loyalty to the other product. But, when we can assure them that the quality of Genuardi's is there and they can save money at the same time, they might consider at least trying it and then we have them hooked," says Puleo. "With the price-comparison shelf tags, we are able to tell the consumer exactly how much we can save them at the point of purchase, which is where they will make the decision to try our product because it offers savings."
Genuardi's maintains its price-tag program throughout the year within the household-cleaning aisles, but several times a year the retailer also routinely holds a private-label sale, placing all Genuardi's brands on sale throughout the store.
During these store-wide sales, Genuardi's laundry detergents, bleach, window cleaners and other high-volume items are placed on endcaps and marked down to extremely aggressive prices. "When we have our Genuardi's Brand Extravaganza, we promote our brands all over the store and from multiple categories -- frozen pizza, ice cream, sugar, laundry detergent," says Puleo.
"We promote the brands in our extravaganza circular and make them more accessible on endcaps and other areas in the store so our consumers can take advantage of the lowest prices on all of our brands all at once. By marking the items down even lower than normal, it encourages some consumers, who might have a loyalty to a national brand, to try our product for the first time."
Between extravaganzas, Genuardi's also promotes its private-label household goods by pulling them from the shelves and highlighting them throughout the store on a strategically placed "wall of values." Placing entire pallets of Genuardi's ammonia, bleach, fabric softener and other items at the perimeters of the store, where their customers are most likely to see them, Genuardi's is able to further draw attention to its own line of cleaning products.
"We take the opportunity to display our Genuardi's brands in other areas of the store where it will draw more attention to the marked-down items than if they were on the shelf in the cleaning aisle," says Puleo. "Having these full pallets on our wall of values also allows the consumer to save a substantial amount of money on a long-term basis instead of just during a weekly sale. We frequently put heavy-hitting items like our laundry detergent and fabric softener here for three to four weeks at a time."