By Rose Spicer-Oracle on Feb 25, 2016
Consumers demand high quality and unique offerings from grocers. These retailers are being asked to expand assortment to drive loyalty. In order for this to be profitable, retailers must command higher prices and margins. Historically, private label has been a powerful promotional or low cost option. The pendulum is shifting. Private label products have been experiencing a truly impressive growth spurt, creating new opportunities, challenges and risks for grocers.
As retailers rely more heavily on private label to improve margins and boost customer loyalty, they also take on the responsibilities of being, in essence, brand manufacturers. With global supply chains consisting of hundreds or even thousands of suppliers, retailers require effective tools to understand, and keep close tabs on, each and every product they sell. In the case of food items, a single ingredient within a product that makes a consumer ill can cause a challenge and brand liability for a retailer.
Four Tips to Protect Your Brand Integrity
#1 Centralize Product Data on a Single System
Given the sheer volume of private label products being offered on supermarket shelves, creating and maintaining a centralized database of products — and their constituent ingredients — becomes an absolute necessity. In case of an emergency situation (i.e. a product recall of a potentially dangerous ingredient), speed is of the essence, both to satisfy government regulatory bodies and to support crisis control with consumer perceptions.
#2 Standardize Supplier On-boarding Processes to Include Product Data Collection
Finding new suppliers offering innovative products is a key element of ongoing private label growth. Once retailers create a centralized database with existing suppliers, they will need to tightly integrate product data collection into new supplier on-boarding processes. While this can be a challenge with smaller or less sophisticated companies that may not be accustomed to stringent data requirements, it’s absolutely essential that these workflows be established, maintained, and continuously checked and updated.
#3 Leverage the Cloud to Foster Transparency and Communication
With today’s globalized supply chains, a product may use ingredients grown and harvested a mere 10 miles from the retail store – or from 10,000 miles and multiple oceans away – or any combination in-between. The enormous web of manufacturers and raw material suppliers contributing to even the seemingly simplest products means cloud-based compliance and communication solutions are a must-have requirement. In addition, cloud-based solutions’ ability to foster multi-directional communications offers significant benefits in boosting innovation and speed to market.
#4 Create and Regularly Test Action Plans for Queries, Recalls and Other Potential Crises
Having a brand compliance solution in place provides retailers with a framework for preparing action plans, for events ranging from a simple query about which ingredients are used in which products to a full-scale recall generated by a potential health hazard.
Retailers need solutions providing granular traceability and high levels of accountability to deal with crisis situations such as product recalls or supply chain disruptions. Retailers also need effective ways to communicate and partner with their widespread supply chains.
As Murphy’s Law says, anything that can go wrong, will go wrong. As you change the mix of your assortment to seize the private label momentum, be prepared. Avoid being in the headlines in the wrong way. Oracle can help. Explore the potential of Oracle Retail Brand Compliance Management Cloud Services.