The concept, however, seems fairly obvious and vaguely familiar.  Proctor and Gamble has been building a retail portfolio for some time now. Their product themed stores are a way to promote and test products as well as gather information about their product users in environments where the products are used. P&G recently acquired a men’s grooming store, a 14-location car wash chain, dry cleaning stores and Fekkai, the well known chain of hair salons.  All of these retail locations are aligned with popular P&G product lines like Mr. Clean and Tide among others.

According to Ian Ritter at Bnet, these types of direct to consumer retail marketing programs are going to become increasingly important for manufacturers as retailers increasingly become manufacturers themselves by heavily investing into private label products. It’s a trend that could that could be detrimental to manufacturers who rely on those channels.  John Wilkins, VP of Retail Strategy at Miller Zell, wrote a very interesting article for The HUB Magazine touching on the value of product testing for the shopper in the decision-making process.  According to Wilkins, a key component missing from the manufacturer-shopper relationship is understanding, “that helping a shopper make a leap from the accustomed to the new with an environment that supports the decision to try something new [helps] her envision the possibilities.”

In an article for Reuters India, Christine Chen, an analyst for Needham & Co said, “Most department store private label brands don’t offer anything too exciting on a fashion level.” Chen cited Bloomingdale’s Aqua line as an exception.  What could this mean for the fashion retail experience? How could increased interest in lower priced designer brands be maximized in the store environment while maintaining the cache of the brand? 

Walmart is even getting in on the branded fashion surge, increasing promotion of girl’s denim brand l.e.i. and surf-inspired apparel line Ocean Pacific (OP). Discounters like Walmart and Target should consider highlighting these high-style, low cost brands by taking a cue from department store configurations. The store-inside-the-store concept could work well inside a big box to draw attention to designer labels and relieve big box fatigue.

This week Convenience Store News released highlights of their 2009 Forecast Study. The report provided a grim outlook for c-stores. The total number of stores declined by almost 700 since the beginning of the year and per-store unit volume is expected to decrease in candy/gum/mints and cigarettes. However, two facts offer some encouragement: consumers are driving fewer miles and stopping luxury spending, focusing on necessary items, and c-stores sell necessities.

Pan-Osten Utopia on c-store counter

Therefore, if the local c-store is closer than the grocery store and the c-store stocks my necessities, I may be more inclined to stop there for incidentals. 7-Eleven thinks that’s a safe bet and is even beefing up it’s line of private label products. Couple these facts with the convenience of self checkout and c-stores may be able to shore up enough profit for the storm. Self checkout also reduces labor costs according to Jenny Sheffield of Crossroads Market in Bowling Green, KY. Crossroads installed Pan-Ostens’ Utopia self checkout solution to speed up customer service and ultimately increase store profits. Pan-Osten explains that the Utopia self checkout solution is easy to install in a c-store environment without impacting decor.  Adding this extra level of convenience makes it more likely that shoppers will pick up additional items as long as it doesn’t add much time to what they plan to be a short trip.

Progressive Grocer reported that Giant Food, a large northeast grocer, recalled several of their private label bakery products. Apparently, some of the products contain nut allergies that were not declared on the packaging and could be lethal. No illnesses were reported but better safe than sorry. I can hear my brand conscious friends declaring, “That’s exactly why I only buy named brands.” So could this be a strategy for CPG’s?

With the flailing economy taking its toll on main street CPG’s are trying to figure out how to keep market share when people are so increasingly focused on value. Lowering cost is an obvious option. But another option to challenge private labels is changing the emotional trigger from brand consciousness to trust and safety. If the perceived benefit is not cachet but health and well being for one’s family, CPG’s could be at an advantage. With bigger budgets for research and quality controls, CPG’s do have something to offer besides the fancy package. Carrying that message from traditional advertising, through to the store, using the shelf to communicate this value proposition right when brand loyal customers are waffling, could make a difference in whether or not CPG’s are able to hold on to those relationships.