Hello dear readers.

Today I want to refer to a very hot topic. It’s hot not necessarily because it’s being talked about these days, but because it causes a lot of friction in trade channels.

It is known – especially among manufacturers – how retailers are increasingly seeking to maintain some profitability in a more constrained economy that we live in now. Wars between supermarket chains in some markets are becoming more bitter in the quest for shopper awareness and loyalty.

There was a time when retailers could very conveniently build a store somewhere a bit out of town or out of town and get lots and lots of attention and sales. These stores had a very distinguished offer: a large number of SKUs and practically everything a Shopper could need to buy. Profitability was not a problem due to the economies of scale achieved by these chains.

Things have changed. Today you can find many more Big Box Stores open and offering almost identical benefits to Shoppers and Consumers. Differences are minimized. Low prices, wide variety of options, promotions and offers, they all use these tactics. Now shoppers have a variety of options and can select the store to stop in for a quick pantry refill or a long Saturday morning of shopping. The strengths of the different offers available to shoppers give them the opportunity to visit three out of four different stores in the month, selecting according to their needs. This has led Supermarket Chains to search for some differential advantage among themselves, as we said before, to offer Better Value and satisfaction as well as gain notoriety and loyalty.

One of the strategies to build loyalty is the offer of Own Brands. Private Labels stem from a longstanding strategy known as White Labels. A white label product is one that has very little branding done, the label is almost blank, and the marketing is non-existent. Those products did not have the ability to retain store loyalty. In general, these products were of very low quality. Stores have realized that if they are to be successful today, they need to use those tools that manufacturers have used for a long time: branding and shelf space.

The Retail Channel’s war against the Manufacturers (it’s not really a war-war because of course the Manufacturers and the Retailers need to come to an agreement and they always will) has started because the Retailers own the Shelf Space which is the where the real marketing warfare takes place. . Retailers are reclaiming their space on the shelves to give more and better faces to their Own Brand Products. That combined with the development of information technology gives them all the advantages over manufacturers in their own stores.

Now, stores still need big brands to attract shoppers and consumers to their shelves, so there needs to be a deal, which usually means manufacturers will have to give retailers more promotional support and flexibility.

But as in a real war, the stronger side will be able to subdue the other. Strong brands can achieve less abusive contracts and agreements than brands of smaller companies.

Now there are other actors in this time of war, the Small Independent Supermarkets and the Mini Markets. These other actors suffer like a small country between two superpowers. Many of them have had to close down and others have found a way to keep going and even grow in the War Zone. I would say that the key for these smaller stores to survive or even grow is to offer a more personal and humane approach. Using Mass Advertising very wisely, Direct Advertising should give better results. Flyers, telemarketing, direct mail, among other tools, would provide better results. Smaller stores are used with more frequent quick purchases. You will stop there to buy something to complete dinner tonight, buy something to drink, buy snacks for school. Also to get perishable products such as bread, fruits and vegetables. In the department store you would buy these perishable products, but not for the whole month, since they would rot.

Smaller stores have the advantage that they can specialize more in the storage of their products, since they have a more natural close contact with their Customers. Loyalty can be built because of this human-warmer contact. Smaller supermarkets can also be better located within urban areas, they do not need such large tracts of land to place their offer and, as we all know, large areas in urban places are expensive and would cost too much value for money policy. maintained by the greats. Supermarket chains.

The value of smaller stores is going up today and there are big box stores that are planning to open a lot of these types of stores as a growth strategy in a tight economy that we have today.

On the side of the manufacturers, the evolution has occurred in the form of the creation of Trade Marketing. Trade Marketing, as its name implies, means doing marketing in trade. A marketing tailored to each client in a different way to adapt to their specific needs and that will give the thread towards a successful win-win-win relationship (Retailer, Manufacturer and Consumer). Trade Marketing continues to evolve, faster in large global companies and differently from country to country.

This is all for now; I would love to receive comments and arguments from him. Feel free to get in touch using my email address: [email protected]