In a recession, when every dollar counts, shoppers begin making decisions about where and how to trade-down, and store brands generally thrive. The large CPG companies today are trying to find new ways to compete.
This means an increase in private label sales. Today 20-25% of Kroger’s sales, and 17% of CVS’ sales stem from store brand items.
P&G has developed two new merchandising strategies to aid in its struggle to compete with less expensive private label. Both strategies revolve around partnerships with other manufacturers as well as with the retailer to produce new merchandising approaches.
Bringing the Men’s Zone to CVS
Procter and Gamble is expanding its Men’s Zone. The Gillette branded “Men’s Zone” we first saw in an H.E.B. store in Shertz, TX will soon be found in a CVS store in Charlotte, N.C. The photo above shows the entrance to the store-within-the-store in H.E.B.
P&G realized through the test run of the Men’s Zone in Texas that the majority of men who visit supermarkets are hoping to find the desired grooming product fast. The dedicated aisle, highly branded and highly visual, will serve as an intervention point in CVS stores. Shoppers passing the aisle with bright blue lights, and digital touch-screens are able to receive added information about their grooming products, which P&G and CVS hope will result in an increase in sales.
Joining Forces with Other CPG Companies
Large CPG companies are working hard to compete with the value pricing (and pricing perception) of store brands. Brands like S.C. Johnson, Newell Rubbermaid, and P&G are constantly pushing their marketing teams to find new strategies that convince shoppers about the benefits of their national brands. These aforementioned brands have decided to work together to leverage brand leadership in response to added competition from private label goods.
To meet the needs of professional cleaners in the Upper Midwest USA, S.C. Johnson, Newell Rubbermaid, and P&G have teamed up and put together a very targeted, branded department. A 12 foot stretch stocked with products of all three brands can be found in Menard’s stores. The new department will not include any private label products, providing a very noticeable department in the store for shoppers to identify with the benefits associated with the national brands.