Home brands and marketing

For some years now, thoughtful marketers have been wondering about ‘home brands’.

We all know that, traditionally, retailers have not been strong in marketing. But you couldn’t help wondering about their strategy.

As the big two supermarkets in Australia have pursued a home brands policy and stated over and over that it’s the way to go, anyone with any respect for brands has had to wonder.

It’s hard to believe that proven and much-loved brands like Kraft or Kellogg’s will actually disappear.

But we kept hearing the spin. It was all about reducing inventory, improving margins and, we are told, offering the consumer a ‘better shopping experience’ (their words not mine).

Surely the best brands will always maintain their market share? Maybe the emergence of home brands makes building your brand even more important.

And then there’s the often forgotten question of the consumer. When the supermarket buyer in your household gets to the local store and finds the household’s favourite brand of breakfast cereal or jam or pasta is not available, what’s the next step?

The power of the big two supermarkets in Australia is such that, up to now at least, it seems that the consumer has been the last person considered.

Well, things may be changing.

The world’s biggest retailer has just done something against the home brands trend.

Yes, Walmart has just restored some 300 items to the shelves after a wave of consumer complaints. (Of course, that’s one area where Australian consumers are pathetic. We never complain. But in the US, consumers speak up. When you stand in a queue in the US, almost always you get invigorated when you hear a local sounding off, letting the attendant know what’s wrong!)

Walmart was obviously listening, for the decision makers there began realising that the culling actually ‘aggravated’ consumers. And so what is it doing? Restocking hundreds of brands and products eliminated or curtailed over the last twelve months, and also taking a new look at other categories where it has streamlined choice.

Of course, apart from listening to the consumer, you can probably guess what brought this on. During the last quarter of 2009 Walmart's traffic declined and sales actually fell for the first time in the retailer's history.

Walmart relies on low prices for branded products and a large assortment to differentiate itself. Sad to say, it lacks individual shopper figures that would show how decisions about store range have impacted its most-valued customers.