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BY PATRICK RODMELL

Guest Commentary

THE 10 KEYS TO PRIVATE BRAND SUCCESS:KEY NO. 5: PROCESS ENGINEERINGIt may not be sexy; but it’s critical to success.

Patrick Rodmell (prodmell@wattintl.com) is president and CEO of Watt International, a Toronto-based integrated retail agency with more than 40 years experience in more than 40 countries around the world. The company is well known for creating such landmark private brands as President’s Choice, Great Value and Safeway Select, and more than 100 other private brands world-wide. To read the first three of Patrick’s keys, go to privatelabelbuyer.com and look in the PLBuyer Voices section.

Speed to market, workflow efficiencies and quality of outcome are all directly impacted by the journey taken to the destination

first time if they knew they only had one chance to get it right before penalties kicked in!

It may not be as sexy as some of the other Keys to Private Brand Success, but standardization, documentation and regular evaluation of the private brand development process (i.e. measurement) is critical to realizing efficiencies and getting the right solution on the shelf as quickly as possible.

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for short), which essentially assigns a financial penalty to anyone involved in the process (excluding the retailer) who completes their task incorrectly or outside prescribed timelines. After all, it’s the retailer who stands to lose the most – why should they pay for third party inefficiencies?

Working with an international mass merchant on private brand development since 1986 also has taught us a thing or two about process.

For example, if you provide anyone involved in the packaging artwork development process with two circulations for review, the chances of things being complete and correct the first time are slim. To reduce costs and improve timelines, vendors were given one shot at providing content and comments; anything beyond that and they had to pay extra. It was amazing to see how many more vendors and printers got it right the

for a product or line within their private brand range? Sales data and industry benchmarking are great starting-points, but this information only gets you the basics and is available to every retailer, so it won’t really deliver unique items that can be tremendous assets in driving retailer differentiation.

To achieve this, we encourage our retail clients to include a healthy dose of trend analysis programmed into their standardized development process. For example, smaller formats, healthy alternatives, ethnic-oriented ranges and ergonomic physical packaging solutions are all opportunities we identified through trend analysis.

Development of the packaging artwork is another area where many retailers could benefit from process engineering. When should legal get involved? Who internally should review/approve artwork? When should vendors get involved?

What tends to be overlooked is the business impact of getting it right versus stumbling through the panics that inevitably occur when the right structure isn’t defined and followed.

Working with a large U.S. supermarket chain a while back, we calculated the margin opportunity cost per day that resulted from the private brand product not being on the shelf (assuming that the consumer would select the national brand alternative if no private brand was available). We also looked at the sales opportunity loss if the old packaging wasn’t replaced by the new one. The numbers were staggering. This led to increased attention to process and greater attention to maintaining timelines. It also formed the genesis of our Vendor Incentive Program (or VIP

If you ever want to break up a party, start talking about Process Engineering. It’s just not sexy.

Nor is it particularly exciting. But it is one of the elements that separate successful businesses from followers, and can have a material impact on the performance of a private brand program. Speed to market, workflow efficiencies and quality of outcome are all directly impacted by the journey taken to the destination.

Over the past 18 years here at Watt International, I’ve worked with dozens of retailers on the strategy, product range, branding and packaging execution of their private brand programs. At any given moment, it would be common for us to have more than 500 SKUs at various stages of development from as many as 10 different retailers. And I can tell you one thing with absolute certainty – no two retailers go about developing their programs the same way. And every one of them could benefit from examining and fine-tuning their process of private brand development from product development all the way to replenishment.

A number of years ago, Watt mapped out the process and found that there are 312 unique steps required to get the job done. We also found that the sequence of the steps was just as important as the rigor around completing them all.

While it would take a lot more room than this column to outline the details of all 312 steps – and would most likely put every reader to sleep – I’d like to highlight a few specific areas that are particularly noteworthy.

The first step that requires specific attention is product development. How should a retailer validate the opportunity

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PLBUYER MAY 2011 The Ten Keys to Private Brand Success

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