How packaging can boost the stock of private labels

Private labels are on a steady rise in the Indian retail scene. Also called in-store brands or in-house brands, they are created by retailers to make a competitive and unique product offering. Their growth is directly linked to the growth of organised retail in India which according to an Indian retail intelligence survey, accounts for less than nine per cent of total sales.

With modern retail gaining its foothold in the country even in tier-two and three towns, private labels hold a bright future in the times to come. Online retailing is also becoming a steadily growing avenue for brands.

The case for private labels
Today private labels are penetrating across categories like apparel, tech, homecare beyond groceries and fresh produce. Deepti Kshirsagar feels, “Private labels have great potential to grow, especially in India, due to its large consumer base who seek value, quality, and freshness over brand names. Consumers who buy loose, unbranded staples and goods see great value in upgrading to private label brands and the segment accounts for a large chunk of the population even today.”

Deepti Kshirsagar of Tricycle Tribe Creative Ventures

Another facet to be looked upon here is that many times national brands are limited by economies of scale, and thus, face challenges in catering to the divergent needs of a country like India with multiple regional preferences. Private labels can step-in here in understanding the diverse region-centric demands of consumers and catering to them in stipulated time.

“Premiumisation of private labels with niche offerings is the next big thing in sectors such as health, eco-fashion, and so on. From freshly made cold-pressed juices, organic food staples, international variety of cheese to an extensive line of premium baked goods, with the kind of engaging experience and extensive choices that the private labels are offering, there is no doubt that we will see consumers turning down brand loyalists soon.”

The marketing challenge
Traditionally, private labels mostly try to address niches that are considered infeasible for national brands or are positioned as cheaper alternatives to the top brands. Private labels can address these markets economically as they don’t incur any marketing or distribution costs. This predisposition, however, creates some challenges in creating a brand value around a private label.

According to Kshirsagar, as private labels are comparatively low in price, they are also perceived to be low in quality. And they have to compete with national brands without being on prime time.

Kshirsagar observed, “Initially, when private labels entered the retail scenario, they employed basic, un-engaging packaging, reinforcing the fact that they are low-value products. The packaging is boring, simple and it is homogeneous even for different product categories, to the point that it creates confusion in the minds of buyers. Many times we see that these products adapt the packaging characteristics of leading brands. Thus, trying to imitate the leader brands in the category and pave a way for itself in the market.”

As private labels are witnessing a paradigm shift in the marketing strategy, big retail players intend to create private labels that are more than just value for money or mere alternatives to national brands. When the objective is to create a brand that consumers will value and cherish for the long term, the design strategy and brand positioning has to be crafted in a manner which appeals to the consumers.

Branding strategies for private labels
Kshirsagar highlighted a few strategies that can help private labels mitigate low-value perception, grow across multiple product categories and also increase brand awareness among consumers.

A private label is intended to straddle across categories and grow newer ones. Kshirsagar said, “When TCT attempted the logo design of Tata’s Fabsta, a number of colour variations were created. This enabled flexibility in brand logo usage and avoided monotony in the characteristics of the products. With wholesomeness at the core of the brand, the hero ingredient story became an anchor of the visual architecture across the brand.”

Kshirsagar added: “I think private labels have a great advantage over national brands. It can push the boundaries in terms of visual appeal. It can disrupt the market by breaking the category codes. Research shows that even today, 70% of purchases made are on an impulse. Thus, we used disruptive visual designs in low involvement categories such as papads and broke the serious category codes of the growing nacho segment to create enough reasons for a consumer to switch preferences.”

Supremia is a premium private label available on eCommerce platforms

According to Kshirsagar, the major challenge private label packaging face is the print run length. TCT addressed these challenges for one such brand, by managing the designs in a way that three SKUs can be printed on one roll. This reduced the need for changeovers and additional makereadies, thereby reducing the printing costs.

Another area that TCT addressed with its packaging design is product awareness. As private label products don’t get advertised in mainstream media, it becomes imperative to use packaging as a cross-promotion tool for private labels. TCT deployed this strategy by using the back of the pack to promote the range of products of a brand.

Kshirsagar said in her concluding remarks, “Strategic and thoughtful packaging for private label brands can easily create a strong point of differentiation, and help it stand out from the rest. It can help elevate the perception of the private label to a valued brand and trigger the buying decisions for the consumer.”