Mumbai (Maharashtra)[India], January 23 (ANI/NewsVoir): Before she had founded her 3rd venture, her current E-commerce company, Dr Som had known one thing and that was to get started with proprietary brands, experiment with them, scale and expand them across marketplaces and only then take on client brands. A lot of pertinent questions were raised. When she had the know-how and the expertise to successfully scale a larger brand, why did she want to begin with in-house labels? What would be her pricing strategy to battle the big names? How would she be liable for stock inventory, what would be her strategy to avoid getting stuck? How will she ensure ingredient quality?With this in mind, let's first define what a private label brand is.
Shopify defines Private Label products as those "manufactured by a contract or third-party manufacturer and sold under a retailer's brand name". But there is a lot more to these words than what meets the eye. The process of creating a private label brand is demanding and extensive.
First the RD team performs comprehensive market research, understanding market viability and the potential of the product in mind.
Then precise customer demands are comprehended and valuated. The process which includes customer profile analysis and understudying demographical needs.
According to the gaps present in the market as studied, formulas are then created to be built into products.
Now, manufacturing private label brands are either conducted in-house if one has the capacity or is outsourced to a third-party manufacturer. Starting from patent, trademarks, clinical trials that raises the overall quality and level of IP, all aspects of building a private label lays in the hands of the owner.
Dr Somdutta Singh - Founder and CEO - Assiduus Global, said, "I always wanted to create a solid portfolio of brands that would create a recall value for her products/company name in the market and a status for her name in the E-commerce landscape. Her team uses the process of netnography wherein they conquer digital footprints, quantify social interaction or digital communication to attain valuable insights, analyze demand and develop products consequently."All of Dr Somdutta's launches are based on what she likes to call DBL - Data Based Launches. As the name suggests, they do not build products just because there isn't one of the same attributes in the market. They only build products that customers are in need of. Be it their nutraceutical, inner wear or skin food related range of products, they have only manufactured products that consumers are in quest of. Various studies have time and again proven that data backed launches are 70% more successful than products that have been produced based on regular primary research. The latter has no validation of footprint or consumption to back the product launch.
Dr. Som's technique and market approach is also very unique. They follow the ACT technique which is Action, Consumer and Time - only act when the time is ripe for bringing a product into the market according to consumer demand. This gives them a massive competitive advantage over others and saves them valuable resources such as time, cash and manpower.
Of course, private label brands are not risk averse, but for Dr Som going the private label way is probably one of the best ways to build a sustainable long-term business especially when it comes to the E-commerce battlefield and in the current Industry 5.0 era of hyper personalization.
Here's something interesting. 1/5th of all grocery sales in America are today sold under the retailers' name. In Canada, private labels account for 1/4th of total sales across channels and business verticals. In Europe, this number is much higher. Now, you see how powerful private label brands are, often being quoted by brand manufacturers as their 'enemies'!Just a decade ago, there was a discrete disparity between private label brands and national branded products when it came to quality and attributes. Today, that gap has reduced dramatically; the quality of private-label products is superior than ever before, there are numerous product categories to choose from, their attributes are becoming increasingly reliable and products are getting progressively innovative with a strong focus on staying modern and beneficial.
As consumer demands are rapidly snowballing, especially in the face of a global pandemic and mall visits have diminished considerably, retailers are tapping into the private label market implementing it as a significant strategy to set their brand apart and shape customer devotion in a market that is cluttered and saturated.
Private label players have a mountain of data available with them to understand what customers demand and therefore deliver precisely that. That's what Netflix did, didn't it? Over just the last few years, the OTT platform has moved beyond its traditional role as a mere delivery agent and essentially started creating its private content that is both refreshing and innovative, much in the same way what private labels are undertaking.
In this context, when larger brands and Fortune 500 companies came across Dr. Som's brand/company name and realized how she has been able to scale my own brands across geographies, they came onboard with a certain level of faith in her and her expertise.
With a private label, she has absolute jurisdiction over her business and products, can control prices and standing in the market. She is building a brand that is unique, a trait which caters to the current market segments, millennials and Gen Z and their desire for exclusiveness, decisive from a strong customer retention and allegiance standpoint.
Let's get one thing straight, customers are faithful towards brands, not products.
Here are Dr Som's final thoughts...
Dr Som cannot keep overstressing the value of a strong private label brand in the market. Private label brands are no more meagre counterfeits of their national counterparts. One thing is certain, this private label explosion is not short-lived and despite the COVID-19 crisis dwindling, consumers will not forsake private brands for national brands. Conversely, private label players need to safeguard they stick to their current momentum and keep upping the ante.
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