By Tom Y. for our 99 Ways to Make a Positive Difference in Your Pharmacy blog series
Let’s Talk About Your Private…..Label
In my first blog post, I discussed the benefits of using energy-efficient lighting in your pharmacy. In my second post, I discussed how to clean your pharmacy floors. In my third and final post, I will discuss the “things” between the lights above your head and floors below your feet:
Your private…..label!
Every drug store has them, but compared to national brands, private label products don’t get the benefits of displays, online/print ads, and promotional pricing. According to a 2013 IRi analysis of merchandising activity of private label, “Private label consistently receives less merchandising support than national brand CPG solutions.”
So why should your independent pharmacy spend more time merchandising private label products?
- Private label products have larger consumer savings compared to branded products. According to IRi, “on average, private label solutions offer consumers savings of 22% versus national brand solutions.” This is also consistent with HRG’s analysis of private label retails for key health beauty, and wellness (HBW) categories in retail drug. Our data indicated that, on average, private label retail prices are between 70 to 79% of brand retails.
- Private label products have higher retail margins and can yield higher penny profits compared to branded products. HRG’s analysis of key HBW categories in retail drug showed that gross margins are typically between 40 to 60%, often over 30% higher than brand gross margins.
- Private label products are often a “better” product for your customer. To entice consumer’s interest in private label products, private label manufacturers have innovated their lines with attributes that outshine their brand equivalents. Some of these attributes include larger product or package sizes, or unique flavors or scents.
If you are worried that your customers might view private label products unfavorably, well…don’t! Consumer sentiment towards private label, according to IRi, has become quite favorable: “More than 90% of consumers believe private label solutions offer the same or better value versus their national brand counterpart, and more than 80% believe the quality is the same or better.”
Merchandising private label products not only can improve your bottom line, it can also bring savings to your customers!
Tom plays an important role in auditing the accuracy of HRG’s data libraries. He is responsible for the maintenance and development of HRG’s private label and home health care libraries. Tom also interacts with internal and external clients to gather product information related to manufacturers’ new items, package samples, UPCs, pricing and marketing materials.