Chains that sell their suppliers’ brands have suffered as a result of competition with chains that sell their own brands, and this has put them in a difficult position. However, the important factor is not what brands or how many of these are sold, but whether or not the store is capable of creating its own meaning, departing from the traditional role of a “multi-brand store” to become a chain brand, a “retail brand”.
There seems to be no doubt. Multi-brand stores, which frequently appear under the heading of “independent retailers”, are on the decline. This may be observed, for example, in the following figures for retail distribution of clothing in Spain.
This trend is causing enormous concern, not only to these companies, but also to large suppliers who have seen many of their retail customers disappear, despite their leadership of the channel. As a reaction to this trend, more and more companies have taken the decision to open their own stores. The underwear company, Punto Blanco, is an example of such reaction.
On the other hand, another underwear company, Sans Branded Apparel, is developing a chain under the name of “Area Interior” (“Underwear Area”), but with a multi-brand format, selling Unno, Abanderado, Princesa and Ocean. Is it going against the flow by commercialising several brands in the same store?
Are we using the right vocabulary?
If you were asked to name some multi-brand stores, would you mention Carrefour and El Corte Inglés?
Strictly speaking, both sell a variety of branded products, but we do not tend to classify them as “multi-brand stores”, because the public percieves the whole store as a brand, independently of the brands they might have inside.
Branding through third party brands
Going one stage further, in some sectors, such as the curtain sector for example, there is a practice known as “editing”, whereby a company selects certain references from the range of products offered by the suppliers to create its own collection, imbuing this with its own character.
Elaborating this collection could be compared with the work carried out by the curators of a museum exhibition:
……….- They try to give the exhibition a “central theme” of interest to the ……….audience.
……….- They seek to ensure that coherence emerges from the group of ……….pieces as a whole, rather than from each piece individually.
……….- They select the most appropriate works from a large number of ……….possibilities.
When the public grasps the meaning of the edited collection, purchasing becomes less complex, because the customer has fewer doubts. Furthermore, you sell more with a smaller number of references.
EVERY CHAIN MUST ASPIRE TO BECOME
A BRAND EVEN IF ITS NAME
DOES NOT APPEAR ON THE LABELS.
What is branding, if it isn’t giving meaning to something? In this respect, the retail professional has a lot in common with a philosopher.
So whether or not a store sells suppliers’ brands is irrelevant; the key point is that the store should be capable of creating something with meaning of its own, with which a particular public can identify.
Therefore, “Area Interior” has not backed a losing horse, because if it does things well, it will become a brand. A chain brand, a retail brand, yes… but a brand nevertheless.
Stores perceived as “multi-brand” do not have a future: they must become stores with soul and identity of their own, stores that create their own meaning, in other words, stores that reflect a brand. Every chain must aspire to become a brand,… even if it does not sell products labelled with its own name.
Source: Distribución Actualidad, the spanish magazine of retail
(nº 387, March 2008)