Why is it important for retailers to watch their price image in a competitive environment? With consumer budgets getting squeezed and competition from all and new directions, grocery shoppers are looking for discounts and bargains. Whether they are watching a morning show or local news programs, consumers are being told how to save at the grocery store by shopping smarter.
Traditional and digital media outlets are encouraging private label shopping versus national brands as a way to stretch the customers' dollar. Private label products typically deliver a higher gross profit than their national brand counterparts, delivering a bargain to the consumer and an increased bottom line to the grocer.
How can you help promote your private label lines and add value to the consumer?
Use compare and save tags
Show a price savings of the private label brand against the leading national brand. Help the consumer see how much money they are saving. This not only helps with the transaction at hand but also the overall price image of your store.
Review your private label pricing
Private label products are typically margin enhancing. Watch out for third-tier products that erode gross margins and cannibalize private label sales.
Use multiples when pricing private label
For example, instead of pricing a product at $1.49 try multiple prices of 2/$3.00
Promote private label on end cap displays
Use compare and save signage on end cap displays, even when the product is not shown side by side to the national brand.
In the aisle, private label products should be next to the national brand product, not hidden or two shelves away. You want the customer who is reaching for the national brand to see the private label product at the same time and view the compare and save amount. This will add a sense of savings to your store and help to improve margins. It is important to help the shopper see the savings in these tight economic times.
It is no coincidence that the big box stores saw slower growth during strong economic times and are now boasting strong sales increases and profits. The consumers are looking for perceived value as their wallets run dry. Promoting private label is just one way to create that perceived value in your store and enhance the price image in a competitive environment.
Learn more about how to protect your margin here.