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UK retailers are positioning themselves at the heart of product innovation with their own-label and private-label ranges, finds Nicola Harrison
n a challenging market where many are competing ferociously on price, store groups are increasingly looking to their product offer to give them a point of difference. Own-label and private-label ranges enable them to offer exclusive products as well as
being more profitable than selling branded goods. In fact, as well as making economic sense due to more
attractive margins, the strategy allows retailers to target a different shopper base, says Kantar Retail director of retail insights Bryan Roberts. But which ranges are working well? Roberts cites Asda as an example of a retailer that has
“shifted the needle on quality” through own brand to widen its customer base. The grocer has partnered with Leiths Cookery School to produce a range of quality food products, for instance. Conversely, upmarket grocer Waitrose’s launch of its value
line has proved a hit with cash-strapped shoppers still seeking affordable quality. Another trailblazer in the field is DIY giant Kingfisher. In a sector that tends to lack product innovation from
the big brands, the B&Q owner opted to take the initiative by developing its own range of products. The retailer was so keen on pushing unique and useful DIY solutions that it set up a dedicated innovation centre last year. Located at its French headquarters in Lille, the retailer works with suppliers, universities and other specialists to develop a pipeline of exclusive products to drive newness and margin in stores. Kingfisher own-brand products, many of which are sold
across the group, include a ready-to-install tile without the need for glue as well as a shower that can be installed in two hours. Another innovation, a toilet with a sink in the top, re-uses the water used to wash hands to flush the toilet. One retailer at the forefront of innovation with exclusive
private-label products is Debenhams through its Designers at Debenhams ranges. Collaborating with designers such as
18 autumn 2012
Henry Holland, it continues to prove a hit with shoppers. Debenhams chief executive Michael Sharp said at the retailer’s interim results this year that two-thirds of its customers cite Designers at Debenhams as the reason they shop at the department store. “We have to offer more differentiated product by growing our own brand,” he said. Debenhams aims to increase revenue
from Designers at Debenhams to £750m in the next three years, and is considering expanding it from fashion and homewares into other categories such as accessories and footwear. It accounted for £524m in its last financial year.
Now more than ever Rival John Lewis has also been working hard to offer exclusive product. In March this year, John Lewis Partnership chairman Charlie Mayfield identified own brand as a key strength of the group, which also operates Waitrose, and said the business had upped the pace of product innovation. “Developing products you cannot buy anywhere else has never been more important,” he said. John Lewis is partnering with designer Alice Temperley to
create her first high street range. Hitting shops in September, the retailer expects queues around the block when it launches. Additionally, the department store has just launched
its biggest ever own brand, House by John Lewis. The furniture and homewares range will initially comprise 600 SKUs and will be showcased within branded shop-in- shops in stores as well as having a dedicated section on
Johnlewis.com. Pets at Home has put product innovation at the heart
of its growth strategy. It runs regular Dragons’ Den-type Innovation Open Days where customers, colleagues and suppliers can pitch ideas to the business. The retailer created the position of innovation buyer last year to search the globe for unusual products to give
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