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By using warm, vibrant colors on its private label packaging and investing in an extensive marketing campaign, Family Dollar has managed to post big private label sales gains and provide lessons others can use.
In the ultra competitive, everchanging retail landscape, Matthews, N.C.-based discount retailer Family Dollar has zigged while others have zagged.
One example-it used colors to help its private labels stand out from the ever-present white on other, new private label packages.
"Family Dollar was really ahead of the curve with the color trend and other retailers such as Walmart, Target and Kmart are changing their private label packaging along the way to get closer to what Family Dollar did from the beginning," says Carol Spieckerman, president of newmarketbuilders, a Bentonville, Ark.-based marketing firm. "They really got that one right," she says.
"Use of vivid color continues to be a critical design element for us," Mary Rachide, divisional vice president for private brand at Family Dollar, has told PLBuyer. "Despite the whitening trend across many other retailers, and in our national brand equivalent quality products, leveraging the Family equity is critical to helping our shoppers connect the product back to Family Dollar."
And there's more to Family Dollar than just a pretty package. It's also garnered success by supporting its private label through extensive marketing efforts, adding private brand alternatives in key categories such as consumables and health and beauty care, improving its inventory availability and transforming the customer shopping experience by renovating more than 800 of its stores.
Its private labels today include Family Gourmet, Family Pet, Kidgets, Family Chef, Interiors by Design, Outdoors by Design, Tropic Sun, Highland Outfitters and Extremely Me!, among others. Rather than follow a tiered approach with a premium, national brand equivalent and value private label, Family Dollar has opted to dramatically increase its assortment of name brand products and compliment that with a growing assortment of national brand equivalent products, says Family Dollar spokesman Joshua Braverman.
Family Dollar stores typically range from 7,500 to 9,500 square feet, most of which are operated in leased facilities. Just over half of its shoppers have annual household incomes of under $40,000 a year and about a third of its shoppers are African-American or Hispanic. About two-thirds of...