Behind the Scenes of 7-Eleven’s Store Brand Process
DALLAS — 7-Eleven Inc. has long been associated with such iconic brands as Slurpee, Big Gulp and Big Bite. But a spate of activity on the product development side in recent years has taken the Dallas-based convenience store chain’s store brand program to new heights.
Within just the past year or so, for example, the retailer added such items as 7-Select Go!Smart fruit and nut bars, 7-Select Go!Yum sweet treats, and even a line of 7-Select over-the-counter medications.
“Private brands are a major part of 7-Eleven’s strategy,” said Sean Thompson, the retailer’s senior director of merchandising and a key member of its private brands team. “Our organization is fully aligned that expanding our private brand offering is a key component of our future growth.”
Speaking of expansion, 7-Eleven has a goal to increase private brand SKU count by 60 percent in 2015.
Innovation and differentiation have been key buzzwords in the private brand arena for a few years now. But for 7-Eleven, they are much more than just buzzwords — they are among the guiding principles for product development.
“To drive total-category performance, private brand items need to offer customers something they aren’t currently getting,” Thompson explained. “We listen to our internal team, conduct research with our consumers and validate the opportunity with our franchisees. We have several groundbreaking platforms launching this summer, and they all started by listening to the needs of the business.”
Quality is a key differentiator for the retailer. Products offered under 7-Eleven’s own brands give shoppers items that are of “exceptional quality,” he said, driving profits for the retailer’s all-important franchisees.
More than 6,400 of its U.S. and Canadian stores are franchised. Franchisees ultimately make the decision as to how many private brand SKUs they will carry in their stores.
On the quality front, 7-Eleven begins with a specific benchmark for a product and works to create a store brand item that is “noticeably higher” in quality than that benchmark, Thompson noted. Although this approach makes it much more difficult to bring products to market, the retailer will not compromise here.
7-Eleven’s category managers also play a critical role in store brand innovation and differentiation via a strong category strategy that allows them to identify gaps in the assortment. “They know the needs of their customers and work with our team to deliver on opportunities that add incremental sales to their assortments,” Thompson said.
One recent success story came out of a collaborative effort between a 7-Eleven category manager and a product development manager. The goal was to offer customers a line of sweet treats they might expect to see at a local confectionery outlet, but at a compelling price, he relayed. The first products introduced under the resulting product line — 7-Select Go!Yum — also were created based on 7-Eleven’s consumer insight research that showed consumers want to reward themselves with premium, high-quality treats.
“Each product is made with premium ingredients curated to provide high-quality products with on-trend flavors that have features designed specifically for the 7-Eleven customer,” Thompson said. “They did a great job, and this platform is helping to drive incremental sales for the entire category.”
For much more on 7-Eleven’s store brand strategy, including the role of packaging and finding the right supplier partners, look in the October issue of Convenience Store News.