Retailers are facing an urgent choice: Innovate or get left behind.
With up to 98% of product assortment the same across competitive retailers, according to Daymon custom analysis, private brands are the key to clearing this sea of sameness and unlocking shopper loyalty.
But in the relentless pursuit of brand differentiation, innovation is often applied as a monochromatic tactic across private brand programs rather than a multifaceted, fully formed strategy. Without the bigger picture, retailers are left searching for a singular niche or identity to make their own brands stand out.
Innovation should be viewed as a spectrum, even across a singular banner, says Jean Ryan, vice president of strategic advisory at Daymon, which powers private brand development for Advantage Solutions. Across many categories, a lower-risk, fast-follower approach may hit the sweet spot of return on investment. But to truly stand out, retailers must also push the boundaries on the other end of the innovation spectrum, with ownable or market-leading innovation.
Daymon works with retailers to determine their appetite for risk and which innovation levers to pull, depending on their unique programs and strategies. To help customize the best way forward, Daymon analyzes innovation opportunities through its Global TrendWheel™, a proprietary tool that helps define, track and analyze consumer trends and behavior.
“We use the Global TrendWheel as a foundation, customizing strategies based on what’s relevant to today’s consumers, coupled with each retailer’s individual growth strategy, category gaps and program parameters,” Ryan says.
A fast-follower approach won’t lead to exclusive products, but it’s nonetheless essential for many categories, Ryan says. This approach takes extra risks out of the equation while still satisfying shopper needs and driving sales. The power of this approach lies in its customization: activating the overlap between market trends and a retailer’s specific shopper needs. Daymon’s TrendWheel-driven showcases, for example, exemplify this strategic, consumer-led focus, even for fast-follower initiatives.
There’s risk in playing it too safe, though, Ryan says. Relying solely on fast-follower innovation can result in private brands getting lost in the mix with no differentiation to uniquely connect with shoppers or earn their loyalty.
Through its Distinctive Product Development team, Daymon helps retailers launch innovative, new-to-market products, partnering with suppliers to create anything from new formats, flavors, or even category segments. Daymon’s experts connect the dots between supplier capabilities and retailer needs, identifying how new and unique items complement a retailer’s portfolio.
The approach requires “a higher level of partnership,” Ryan says. “It’s more time and more investment, but the payoff is you have something that’s truly one-of-a-kind and specific to what your shoppers want. We allow retailers to target that white space in an unparalleled way that will set you apart from the competition.”
Connect with Daymon today to unlock tailored innovation tactics across your private brand programs.
Sarah Diamond is a senior associate marketing manager for Daymon, where she has worked for more than five years.
