Strategic Sourcing: Private Label Innovation

A new generation of forward thinking retailers are looking to develop private label solutions that surpass the national brand, yielding higher sales and profit margins. With this in mind, a best-in-class regional retailer challenged ArchPoint to create a best in-class non-foods product that would grow their private label category share, while giving their consumers exceptional value.

ArchPoint Sourcing Roadmap

Instead of simply offering a product at a price, ArchPoint put in “the work” to yields a sustainable, incrementally profitable solution. This work is guided by our methodology which reflects our heritage as experienced executives and management consultants. Our method involves the following five steps:

Assessment & Strategy
Data Mining – ArchPoint’s approach to analyzing market information through syndicated market data, social media data mining and consumer surveys provided insights about the category and its top-selling items, consumer sentiments and perceptions and consumer demand.

Competitive Market & Product Design Analysis – ArchPoint thoroughly analyzed every product at every major retailer in the competitive market. This included assessing product elements such as size, count, price, weight, thickness and functionality.

Industry Best Practices & Internal Innovation – From fully analyzing the competitor’s top selling product compositions, ArchPoint leveraged the best qualities of existing products and combined them with the design aspects that the retailer’s consumers were demanding.

Shelf Assessment – ArchPoint’s developed a planogram for the client based upon an algorithm involving current sales velocity vs. anticipated sales velocity, product dimensions and store-by-store shelf spacing.

Final Outcome –ArchPoint presented to the client all of the findings in a comprehensive playbook, including how ArchPoint would solve each step. Impressed and intrigued, the client asked us to proceed to the next phases of work

Solving & Launching
When searching for the right supplier, ArchPoint sought a manufacturing partner that could offer what we were offering our own client: credibility, relationship longevity, attention to detail, flexibility and exclusivity. After identifying the right partner, we began working with them to design and produce the product.

Product Design – ArchPoint’s global product engineering team created 3D designs for each product according to the playbook specification.

Mold Tooling & Testing – ArchPoint worked with third party mold designers to turn the designs into reality.

Packaging – ArchPoint’s in-house creative and marketing team designed packaging to make the product stand out of the shelf

Supply Chain & Forecasting – Before the product was packed and ready to go, ArchPoint’s supply chain team worked with the factory to ensure all packaging was printed, all production was created and all shipments would arrived to the client in a timely manner for the first run and everyone one thereafter.

Mass Production & Quality Control - ArchPoint’s on-site quality control personnel continues to ensure that consistent, superior products leave the factory to be shipped to ArchPoint’s warehouse facilities

Warehousing & Product Shipments – ArchPoint’s warehouse team receives, stores and ships the product to meet the client’s requested shelf date to ensure no out of stocks occur.

Shelf Upkeep – To further prevent out of stocks on a store by store basis, ArchPoint’s Market Execution Team consistently maintains and checks the shelf space.

Learning & Adjusting
As with any new product, ArchPoint continues to make improvement based on lessons learned from the marketplace. Over the years, multiple iterations of packaging and new product developments have helped to grow share, revenue and profitability for our retail client.

Product Updates – Passing along savings and growing profit for our client is central to our program. Our latest packaging update increased private label sales by 40%, while our newest designs expect to reduce raw material weight by 15%.

Incremental Growth – ArchPoint understands that diversity, uniqueness and innovation is key to private label growth. ArchPoint provided one client with seven new SKU’s, two new displays and four designs in three years.

Now in its fourth year, the client’s private label non-food products once defined as generic and undeveloped in the category, are now controlling the category at 80% market share. The need for the national brand has also diminished with many SKU’s marked obsolete and discontinued versus the private label leader. Our client continues to turn to ArchPoint for private label innovations in other categories as well.