The lure of private labeling…to some it’s a necessity, while to others its just ‘feel good promoting’ nothing more than seeing ones face on a billboard- wasted promotional dollars driven by ones ego.
I have been asked many times what I think about private labeling, as many quality nutritional companies we all deal with offer it to lock in our loyalty.
I have been asked my opinion on private labeling for independent pharmacy practices over the years, and more times than not, my answer is…it’s not necessary, ads to tie up of inventory and extra expenses, and sometimes might even be a sales deterrent.
Time and time again I have seen partnering with the right nutritional company be part of the ‘secret sauce’ as I find great benefit when a pharmacy practice congruently links with the values of a high grade nutritional company and benefits off of their million dollar branding and positioning- something that most independent practices cannot buy for themselves.
There are of course exceptions, especially when a pharmacy goes the route of having me customize formulations for them that are positioned and aligned with their marketing program.
In the end, there is no better way to beat the competition than with knowledge, service, transparency, quality, and value.
That being said…
A funny thing is happening…the big box retailers want to do what you have always had the ability to do, and can do, sooo much better. They want to offer their customers higher quality of supplements at a higher price…because that’s what the consumer wants.
This of course is easy for pharmacists like us, because we have access to the highest quality supplement companies- while such companies don’t want to be part of the big box retailers program.
Because of this, many big box retailers are looking towards private labeling, to provide higher quality ingredients, unique formulations and more attractive packaging to appeal to the consumer.
This is a major departure from their MO of selling single letter vitamins and rock bottom rices.
As reported in Fooddive:
· Retailers are looking to overcome the "generic" label by making changes to their private label brands to become stronger competition for conventional food and beverage manufacturers.
· Instead of focusing solely on low-cost products, retailers are sourcing on-trend ingredients and developing more attractive packaging to appeal to consumers.
· Kroger, Albertsons, Publix, and Costco are a few retailers with private label brands that manufacturers will have to watch out for, in addition to Whole Foods and its "365 by Whole Foods Market" chain concept that focuses on value, against Whole Foods' perceived nature, to lure in millennials.
The appeal of private labeling is growing as retailers focus on improving these products, and consumers are noticing the difference. In a 2014 global survey, Nielsen found that 71% of respondents had seen improvements in private label brands.
…and yet another benefit you have by partnering with a high quality primary manufacturer…..
Product selection is where manufacturers still have the upper hand. Retailers don't tend to have the capital, flexibility, or R&D capabilities to create the niche products and flavor varieties that manufacturers can. Nielsen found that 59% of consumers globally would purchase more private label brands if they offered a wider variety of products. To remain competitive, manufacturers that continue focusing on product innovation and driving new trends will maintain market share.
Many of you are on board, and have been for some time. Others seem to be forced into stepping up to the higher grade brands for the profit potential they offer to buffer what the PBM’s are doing to you. Then there are the others who don’t see the value, and only think through their own eyes, with mental mantra’s of “my customers wont pay that.”
For those of you who are serious about taking your practice to the next levels, contact me or check out our offerings atwww.functionalpharmacy.com where we have functional pharmacy solutions for everyone.