Own label brands?
What are 'own label brands' anyway? Tesco's new man in charge, Philip Clarke, announced last week that it would be 'the creator of highly valued brands'.
He was reported as saying: 'As people develop their higher levels of disposable income, they want to treat themselves.
'They do not want to just buy Tesco Value shower gel. They want to have something sat in their bathroom that looks like it is a brand. So you create brands.'
What he didn't say is that there are higher margins to be made from own brands, they can add value back to the retailer brand itself, and they provide a competitor to manufacturers' brands that allow the retailer to wield more power in negotiation.
But it's not that easy for a retailer to create brands; retailers know about customers, not necessarily about consumers, and there's a difference. What gets bought from a shelf needs to be like, and perform, as a brand in use. Whilst no one is betting against Tesco and this new ambition, there are some capabilities required if the new 'brands' are not going to undermine the retailer's reputation by gathering dust on the shelf or, worse, letting customers down in the home.
Brands like No 7 and Champneys at Boots, and, further afield, Giada De Laurentiis cookware at Target, show that it's not just about inventing a brand name; the created brand needs to have personality itself that is distinct from the retailer and product performance that is more than 'me-too' . It will be interesting to see if Tesco manage to pull this off.