Store-Brand Programs Require Connectivity & Communication
ROSEMONT, Ill. — Running a successful store-brand program is pretty much impossible to do without communication between all parties involved in the category management process.
“There’s a lot of fun to it, but it’s a hard job because … you’re up against a lot of competition — a lot of competition that has information, that has money, that has a whole pile of things. So, if you do not have that connectivity between your organization and your partners, it becomes a real painful job,” Moe Alkemade, group vice president, general merchandise manager for Deerfield, Ill.-based Walgreen Co., told attendees of the Store Brands 2015 Innovation & Marketing Summit.
Store Brands is a sister publication of Convenience Store News and Convenience Store News for the Single Store Owner. This year’s summit was held Feb. 25-27 in Rosemont.
If communication and understanding throughout the category management process aren't taken seriously, one bad decision or instance of mismanagement at any point in the process could start a domino effect that creates an incredibly messy situation, said Alkemade, who delivered the Feb. 25 keynote presentation titled "How to Approach Category Management from an Owned Brand Perspective."
In fact, the problem can start from the point when you make the initial decision on the product.
“Because of all the other things that are not considered — and without the kind of regimen and the religion that you’re either going to have this as your DNA or not — everything else screws up,” the Walgreens executive explained. “It is a perpetual problem, and you end up working on the wrong things and you get a negative connotation on this business vs. a positive one.”
Alkemade outlined several questions that both retailers and their manufacturers need to ask themselves when developing and executing the category management process:
- What is the divisional strategy? It doesn’t have to be “rocket science,” and when it gets pieced together, retailers will have a better understanding of the category management process.
- What is the role of the category? The answer to this question will have a massive impact on what a retailer does with its own brands.
- Are we aligned with the four Ps (product, pricing, placement and promotion)? When finalizing this alignment with the manufacturer, retailers need to make sure they have a set plan and understand exactly how it will be executed.
- Do we have consistent leadership around own brands? The answer to this question is critical to determine because if the program is not led from the top, it will fail at the bottom.
“You are going to make different decisions because you’re going to have a lot of pressure,” Alkemade pointed out. “Especially as category managers and people with P&L responsibility, you have a tremendous amount to make your numbers. And own brand is a long-term proposition … absolutely the right one, but it is long-term.”