Private label: the future of the fashion retail game?
In a rapidly-evolving consumer market, it can be challenging for fashion retailers to remain relevant and profitable. With the growing popularity of online shopping, the ‘markdown buying mindset’ of consumers and the decreasing profit margins offered by national and international brands, it has become increasingly difficult (and costly) for retailers to differentiate themselves from their competition. Stores are looking to connect with consumers and offer an increased in-store and brand experience. However, the product offering is still what keeps shoppers coming back for more.
Branding is everywhere. It is estimated that the average consumer is exposed to more than 3000 brand-related messages every day. Cutting through the clutter and standing out amongst these messages can be daunting for retailers. In theory, the equation is simple: the successful act of branding is about being different, increasing awareness and maintaining loyalty with consumers. This success can be achieved by making an offer that stands out from others in the market. Unfortunately, in practice, success is not that easily attained. To expand further, fast fashion and luxury labels alike provide little (if any) product exclusivity for small boutique owners and mid size retail chains. Plus, to further complicate things, the web has completely revolutionized the way we shop. This, in turn, gives consumers instantaneous access to a plethora of independents — big or small — from around the world. With the simple click of a mouse, purchases are delivered right to your front door in just a matter of days. This new, easy and fast way of shopping has allowed for greater comparative experience and a wider offering than ever before. If retailers want to succeed in this competitive market, they have to find new, innovative ways to attract customers and become a shopping destination that people wont want to miss out on.
Private label is the answer to the product differentiation challenge. High profile branded apparel can have a big impact on business. For example, any time your brand is at the core of a consumer interaction, you increase brand awareness, therefore increasing brand value, creating customer loyalty, increasing equity and becoming a destination for consumers. As you create your own unique image, you are displaying how well you articulate your brand story and how deeply you understand your clientele. While you can’t tangibly account for brand equity on the balance sheet, making your own product line can allow a retailer to stand out from the competition and make the marketing investment a profit center.
Private Labels: Strategically transforming marketing $ into a source of revenue
Private labels are not a novel business strategy for multi-brand fashion retailers. There are in fact more “store brands” goods on the market than ever before. Garnering more than 17% of the total retail sales in North America, they are a significant segment in today’s retail landscape and retailers have gotten serious about their eponymous collections. From 2010–2015, the global market for private label apparel and footwear grew at a steady compound annual growth rate of 1.9%, according to Euromonitor. Although “store brands” were traditionally referred to as a budget-line of products offered to consumers as a cheaper alternative to their brand name counterparts, they are now a strategic advantage as well as a common solution for boosting sales and keeping profits in house for luxury retailers. A report published by UBS Financial services suggested that inexpensive private label brands are in fact losing their appeal with consumers while their higher-price counterparts continue to attract certain consumer segments. This certainly is reflective on the overall growth (in both value and volume) of the Canadian luxury good category that has far exceeded the growth achieved in the majority of other consumer goods. High-end department stores such as Barneys, Saks, Harrods and Holt Renfrew have long produced their own labels in order to fill in the gaps of their designer offerings. In doing so, these companies have given their personal labels prime floor space, ultimately resulting in them making headlines for their marketing efforts. While this retailing strategy has proven effective to impact the bottom line of large chains, strangely, small shop owners are slow to follow the wave.
Sapato Footwear is a new Canadian company that brings 100 years of premium shoemaking heritage and old world tradition to your selling floor. With low minimum quantities and no middle man, the team of shoe aficionados on here in Canada and in Portugal will work with you to translate your vision into a profitable reality, and give you the edge you need to outshine your competition. With direct access to the production facility and artisans in Portugal, your finely crafted footwear will dazzle the discerning North American customer and will offer a price that will positively impact your bottom line.
Sapato’s third generation shoemakers hand-stitch and polish every shoe to provide customers with a premium product that easily retails from $400 to $1200. Masters in the art of shoemaking, the production team on both continents works with high profile European tanneries, using only the highest quality full grain leathers and components to craft shoes that will showcase their passion for fine footwear. Proud of their reputation as one of the leading workshops in Portugal specializing in the Goodyear welted method, their craftsmen have the technical know-how and expertise to help create a footwear line that will exceed your product offering standards.
In conclusion, a private label collection will help make the in-store experience a little more about you and a little less about the brands you sell. Private label products will allow for more favorable margins and the ability to have greater control over the products you sell. Since the process cuts down on price comparison shopping, retailers are able to price their merchandise based on their value (and the perceived value of the merchandise by the customers). The venture also provides a way to maximize marketing dollars, and that is always good news, no matter how you look at it.