A new benchmark study conducted by Retail Systems Research (RSR), and sponsored by Eqos, entitled ‘PLM Squared: Product Lifecycle Management Powers Private Label Merchandise’, reports on key industry trends that have affected private label programmes during the past two years. The report also identifies best practices implemented by the most successful retailers and offers recommendations for brand managers looking to drive growth by enhancing private label programmes.
According to ‘PLM Squared’, major shifts within the last two years include: 77 per cent of retailers studied have increased the volume and mix of private label merchandise they offer to their customers; the majority of retailers have decreased time to volume for new products; and more than half have increased collaborative design with suppliers.
‘When a similar benchmarking study was conducted in 2006, the single biggest business challenge faced by retailers was finding and keeping dependable partners. This year, inconsistent product quality and compliance were cited as the top concerns,’ said Paula Rosenblum, the report’s author, and managing partner for RSR. ‘It was somewhat surprising that the majority of retailers, including very large and highly competent players, are reporting that transit time for factory shipments is not living up to expectations.’
The study found that 70 per cent of retailers have increased the volume of private label products they design collaboratively with suppliers versus 33 per cent for the laggards. It also identified characteristics associated with retail ‘winners’ including: they are able to outperform their competitors in the market without compromising gross margins; a continued focus on decreasing lead times is causing leading retailers to have increased concerns about port capacity issues; and as a group, ‘winners’ scorecard their suppliers’ performance more frequently and on a regular basis.
‘Retailer technology priorities are moving beyond spreadsheets and bidding events into business critical areas such as supplier management and product quality,’ noted Rosenblum. ‘In fact, 95 per cent of retailers surveyed affirmed the value of PLM, global sourcing, supplier management, and track and trace technologies to more effectively manage their private label programmes.’