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Categories in which shoppers prefer brand over PL spells opportunity for store brand development

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT — In today’s give-’em-what-they-want style of merchandising, in a market where savvy, omni-channel consumers can customize the what, when and where of the purchase, private label more and more ascends from being considered the cheapest product offering to being the best value product offering. 

(THE NEWS: Study: Shoppers opt for private label over brands across specific categories. For the full story, click here.

Milk and over-the-counter medicines ranked the lowest in categories where consumers preferred brand over store brand (26% and 28%, respectively). But for all of the other categories where the majority of consumers expressed a preference for the brand, that only spells opportunity for retailers to infuse better value across their private-label offerings. 

Particularly in beauty. According to the report almost two-in-three consumers may gravitate toward a branded purchase, today, but that’s a paradigm that’s getting a hard look from retailers because beauty is one area that is definitely being pruned for private label expansion. You don’t have to look much further than Walgreens recent acquisition of Alliance Boots, the U.K. retailer renowned for its brand development capacity, and particularly in beauty, to find examples of what a successful private-label beauty brand might look like. 

Chief among those brands is Boots No7, which is celebrating its 77th anniversary this weekend with a reinvigorated brand image and new products for the U.S. market.

And that private label evolution toward more sophisticated, better value offerings isn’t going to change. Fact is across the present retail landscape, if one retailer doesn’t deliver on that anything-anytime-anywhere promise, the consumer will just click on the next URL that pops up on their Google search. 

 

 

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Hy-Vee, Casey’s partner on fuel savings

BY Alaric DeArment

ANKENY, Iowa — A supermarket chain and a convenience store chain in the Midwest have launched a program that they said would allow customers to save on gasoline at all their stores.

Hy-Vee and Casey’s General Stores announced the Fuel Saver program, which they said would provide fuel discounts to shoppers who purchase grocery items features in Hy-Vee’s weekly Fuel Saver advertisement. Discounts ranging from 2 to 25 cents per item are loaded onto a customer’s Fuel Saver card, which can be scanned at the pump at Hy-Vee and Casey’s stores, allowing customers to save $2 or more per gallon each week, depending on how many items they buy.

"Tough economic times continue to put a strain on the family budget, and we’re seeing this with our customers and the cost of fuel," Hy-Vee chairman and CEO Randy Edeker said. "The typical household today spends nearly $350 per month on gasoline. Anything we can do to help families save at the pump means more money for them to spend on other items they need."


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Expansion of ethnic beauty further illustrates Target’s aggressive plans

BY Antoinette Alexander

WHAT IT MEANS AND WHY IT’S IMPORTANT — Target is getting aggressive in a lot of ways. Canada. Big holiday plans. And now a plan to take a greater share of the ethnic beauty business.

(THE NEWS: Target unveils new ethnic beauty products at NYC event. For the full story, click here.)

Yes, a lot of retailers have an ethnic beauty aisle — or at least a few shelves, anyway — but few bring the kind of cache and panache to the category that Target can bring. Close to half of Target stores carry the multi-ethnic beauty assortment and, in looking at some of the data, it is clear to see why Target is serious about ethnic beauty.

According to the "Ethnic Hair, Skin and Cosmetic Products in the U.S." report released earlier this year by Packaged Facts, the market for health and beauty care products targeted to minorities posted growth of nearly 13% during 2010, and continued to advance at a healthy pace in 2011 to approach $3 billion.

With the rapid expansion of racial and ethnic minorities in the United States over the next 10 years, ethnic health and beauty care product marketers have a fast-growing target market. Hispanic, African-American and Asian population growth is far outpacing that of whites, with minorities expected to collectively be the majority of the U.S. population as soon as 2042, the report stated.

And, compared with many consumer packaged goods categories, ethnic hair and beauty care products even did remarkably well during the recession, continuing to chart steady growth even though U.S. minorities were especially hard hit by the economic downturn, the report stated. The loyalty of African-American and other minority communities to their HBC products kept the market on track to resume impressive growth as soon as economic conditions began to improve.

As noted earlier, Target is getting aggressive in a lot of ways — not just in ethnic beauty.

The retailer is gearing up for the opening of its first Target Canada stores next spring and has already announced plans to bring its REDcard Rewards program to Canada. Canadians are not only well aware of Target but they are clearly getting excited about the retailer’s upcoming foray into their country.

A recent survey by Kantar Retail and TNS Canada found that 75% of Canadians are aware of the retailer. Furthermore, 43% of Canadian consumers said that they were likely to shop at Target Canada for grocery or health and beauty aids, and 50% were likely to shop at Target Canada for general merchandise or apparel.

Then there’s the upcoming holiday season. This holiday season, the retailer is enticing shoppers with new initiatives, including price match, exclusive gift offerings and shoppable advertisements. It is even offering free WiFi in all Target stores to provide shoppers with better access to its mobile app, and enable guests to redeem Target mobile coupons and scan QR codes throughout the store.

Aggressive … and smart.

What are your thoughts on Target’s growth initiatives, and what do you think will be Target’s next move or major area of focus?
 

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