Taking control of product with private-label ranges makes all the difference, says Ian Cheshire.

Taking control of product with private-label ranges makes all the difference, says Ian Cheshire.

On recent trips to France and China I went into branches of Decathlon, the sports retailer, and was impressed, as I always am, by their approach to own-brand products.

Here is a retailer, which is operating in a really tough part of the sector, using its own-brands to compete with the likes of Nike and Adidas.

It is offering consumers value, quality and choice in a market otherwise dominated by the big sports names. And it is not just doing it in France, but around the world.

A credible own-brand strategy is vital to retail success and has become even more important in the current downturn. With the ongoing squeeze on household budgets, consumers are being careful how they spend. They are looking for value and expect to be offered well-known proprietary brands and own-label alternatives.

We have seen several initiatives in this area recently. Morrisons is revamping its own-brand range, led by the new M Kitchen offer of convenience foods. Tesco is investing in ‘venture brands’, which are own-brand products that don’t come under the Tesco name. Walmart is taking Asda’s George range of clothing to its international markets.

What these retailers realise is that own-brands are not just about the lowest common denominator. Own-brand equals cheap is not a winning formula in the long run. Yes, own-brands give you better margins, but they should also be about quality, innovation and exclusivity.

This gives the retailer more control as no one wants to be left as the commodity seller in the age of the internet search, where margins on such products are gradually competed away.

As the economic woes continue to polarise retailers into two camps – the winners and the losers – the winners are likely to be those who have a strong own-brand portfolio.

This has informed our thinking at Kingfisher. Over the years the number of own-brands in our business had proliferated to about 150 as our businesses around the world pursued their own local approach.

Now we are concentrating on around a dozen own-brands, each focusing on a different category, and sold as a common core product range across all our businesses.

So we have Verve, for gardening products, Blyss for heating and air conditioning and Cooke & Lewis for kitchens and bathrooms. Our aim is to reach a target of a 50% common core range, compared with the current 1%.

These own-brands won’t just be copies of current products, we must also drive innovation in own-label.

To support this, we are investing in a new Kingfisher Innovation Centre, based in France, whose 50-strong team will work with suppliers, universities and other external specialists to develop a pipeline of products that will be exclusive to us.

We have started already with own-label products such as click-together tiling, and a trial of a fully automated self-service paint mixing machine in France, but the future could be even more exciting. One example – paint that changes colour at the flick of switch – is technically feasible, and the sort of new Kingfisher product we see as the key to future success.

  • Ian Cheshire is chief executive of Kingfisher