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Private labels - the fuel of the future of retail
The discussion, attended by representatives of Intermarché, Kaufland, ALDI, POLOmarket and Bewa, showed that the Polish market is maturing towards a model in which private labels are not add-ons but pillars of retailers' strategies.
Private labels as a loyalty tool
Retail chains increasingly see private labels not only as a source of margin but, above all, as an instrument for building lasting relationships with customers. Tomasz Walczak, Marketing Director at Intermarché, emphasised that the chain's strategy is not to multiply new indexes, but to tailor the offer precisely. “The point is to have products on the shelf that make sense,” he said. – A higher margin does not always mean higher profits. In trade, PLN —not percentages — count. Private labels are a way to keep customers coming back because they get a good-quality product at a reasonable price.
Intermarché plans to consistently increase the share of private labels by at least 2 percentage points annually, to reach around 20 per cent within 5 years (the 10 per cent threshold has already been exceeded). As Walczak emphasised, it's not about the numbers in the table, but about building loyalty. – Our goal is for customers to return to products they know and trust. A private label is not a marginal asset, but a tool for network development, he noted.
Magdalena Domagalska-Tubacka, commercial director of Polskie Supermarkety (POLOmarket), also pointed out that quality and consumer trust are crucial today. – When a customer reaches for our product, they talk about the entire store. We cannot afford to compromise on quality. Price is important, but it is quality that builds trust and determines whether the consumer will return, she said.
Ewa Krygier-Szczepaniak, Purchasing Director at ALDI Polska, spoke in a similar tone, emphasising the importance of communication during the brand change process. – When we change the name or packaging, we must clearly convey to the customer that it is still the same product, the same quality. This work requires patience and trust, she noted.
Quality and Diversity Strategy
Private labels are no longer synonymous with cheapness – they are increasingly becoming a distinguishing feature of chains and a tool for building their image. Sławomir Kołodziej, Director of the Non-Food Purchasing Division at Kaufland Polska, noted that in this category, the most crucial factor today is the breadth and diversity of the offer. – The private label is no longer uniform; each category requires a separate strategy and its own identity. We want our brands to be recognisable in their own right and able to compete with manufacturer brands, he emphasised.
Kaufland is developing regional projects and an offer tailored to families with children, while strengthening the premium segment. – We must allow customers to choose – added Kołodziej. – Some people are looking for everyday products at a reasonable price, while others want higher-quality products. In the future, private labels will evolve into many distinct brands within a single network.
ALDI, while building its portfolio and introducing packaging standardisation, does not forget about the needs of local consumers. – There is no golden mean – emphasises Krygier-Szczepaniak. – Unification will never be more important than customer expectations in Poland.
At POLOmarket this process mainly concerns quality and recipes. – We simplify the ingredients and formulations, but without compromising on taste – said Domagalska-Tubacka. – Customers expect their favourite products to taste the same, even if the ingredients or technology change. We will not fall into the trap of lowering quality to lower the price.
Social network trends – a quick boost for your shelf
The growing influence of social media on purchasing decisions has become one of the most important challenges for purchasing and marketing departments. As the debate participants admitted, viral social media trends can create a new category of demand within a few days.
– In the world of the internet, a product can gain global reach in 48 hours. The consumer sees a trend and immediately wants to find it on the shelf, noted Tomasz Walczak. – This requires enormous flexibility from us, because if we do not react in time, the client will go to a place where the trend is already available.
Marek Piątkowski, CEO of Bewa, added that a quick response to such impulses requires a different model of cooperation between the chain and the manufacturer. – Social media shortens the product life cycle. Sometimes a trend lasts two months, but if a chain can introduce a new variant of a drink or snack during that time, it can achieve spectacular sales results. This requires flexible processes and a willingness to work with short series, he explained.
According to the discussion participants, private labels – thanks to a shorter decision-making path and greater control over production – have an advantage in responding to such impulses. In an era of instantaneous trends, the network must combine the traditional rhythm of planning with a culture of rapid response.
Partnership instead of pressure
Private labels today require a completely new model of cooperation with suppliers. Marek Piątkowski pointed out that the effectiveness of this segment cannot be based solely on price pressure. – Cooperation with chains often begins with the question: what can you do to make it cheaper? And it should start with a question: what can we do together so that we all earn more, he said.
He added that the advantage of a private label manufacturer today lies in its flexibility and speed of response. – We are able to introduce a new product within two months if the network partner works openly with us. For this to be possible, stability and mutual trust are needed, he explained.
New market equilibrium
The debate showed that Polish retail is entering a stage of private-label maturity. The growing share of sales will result not only from attractive prices, but also from quality, flexibility, and better data use. The way of thinking about this segment is also changing – chains are no longer looking at it through the prism of margins, but are starting to treat it as an investment in loyalty.
As Tomasz Walczak put it: – Let’s not predict the future, because it usually doesn’t come true. One thing is sure – private labels will become an increasingly stronger pillar of our offering. Customers choose wisely, not just the cheapest. The outcome of this competition no longer depends on who has more product units, but on who can deliver the right product at the right price faster and more reliably – and who can teach the algorithms to choose them.