business news in context, analysis with attitude

The Private Label Manufacturers Association (PLMA) has released a new report suggesting that as “consumers are turning to their favorite supermarkets, drug stores and mass merchandisers as convenient places to shop for an array of financial and personal services, ranging from home mortgages and credit to insurance and health care, travel services, telephone and Internet,” these retailers are creating self-branded options that can offer value to the consumer while building credibility for the store.

PLMA cites the following examples:

• “Kroger, the nation’s biggest supermarket chain, has introduced a broad portfolio of financial and personal services, including home and auto insurance, credit reporting, and insurance coverage for identity theft.”

• “Walgreens, which operates about 6,000 drug stores across the country, is now offering diagnostic services, vaccinations and treatment for minor ailments—ranging from poison ivy to mononucleosis.”

• “Wal-Mart is pushing ahead with plans to carve out store space for its expanded financial services program, including check cashing and money services.”

• Regional retailers are also jumping on the trend. In the mid-Atlantic states, Wakefern Food Corp. is offering a ShopRite private label credit card that includes the benefits of its ShopRite PricePlus loyalty cards. The largest supermarket chain in Texas, H-E-B, is marketing life and auto insurance, with offices located inside H-E-B stores.”
KC's View:
This is really just an extension of the argument I’ve been making about brands over the past few months, and I’ve said over and over that supermarket retailers should be so proprietary about their own brand equity that they ought not be selling food products that bear the name of competing brands such as fast food and quick service restaurant chains.

Now, I know that I’m in the minority on this one. A really, really small minority. And I know that you think I’m being radical in my definition of brand equity. But I’m sticking to my guns, at least in terms of urging a specific kind of highly competitive mindset.

Retailers need to find every possible way to build their own brand equity and differentiate themselves from the competition. It has to do with both products and services, and the creation of a kind of “private label” attitude toward the whole business. I’m not arguing against the value of national brands. Far from it. But they need to be there to serve the retailers’ needs, not the other way around.

(And by the way, I think the best national brands would agree with me, because they know that they are only as powerful as the retailers who carry them.)

In the interest of full disclosure, I should mention here that I will have the privilege of giving the after-dinner speech on Monday, October 1, at PLMA’s annual Washington, DC, conference. I’m looking forward to the event, and to meeting any MNB users who may be in attendance. (I assume PLMA invited me because I’m the only person they could find who wasn’t running for anything, thinking about running for anything, resigning from anything, thinking about resigning, or reconsidering my decision to resign…)