A Brand-New Look at Brands
|Copyright 2014 by Virgo Publishing.|
|By: Roy Katz|
|Posted on: 03/01/2005|
Because most self-storage operators sell retail merchandise, they have to consider which products to carry. One question they need to answer is whether branded goods make a difference. With all the private labels, generics, house brands, controlled labels, look-alikes, knockoffs and other “second tier” products available on the market, you might wonder why to bother with brands at all. So let’s discuss what "brand" means to retailers and consumers.
It’s true that Americans like to save a buck and retailers like to make an extra one whenever they can. Usually, these desires combine for a “win-win” situation, but not always. Shoppers still take quality into account. Otherwise, there would be no branded cars, watches, appliances, cosmetics, soft drinks, clothing, etc. And by “quality,” I don’t just mean top quality. After all, the public knows the Rolex and Timex brands and respects them both, even though one is more upscale.
A brand indicates to shoppers they’ll get what they pay for. In other words, it communicates value. To the retailer, it means his store is buying—and selling—value, that he can stand behind his products with confidence. He doesn't have to worry whether a product that disappoints or even endangers customers will tarnish his reputation. He also knows brands have a “halo effect," which means his store’s image is positively affected by the products he sells (providing they have a good social standing).
Brands in Self-Storage
Image is important to self-storage businesses. Given the sophistication of today’s consumer, it’s no wonder industry professionals have become concerned about how their operations are perceived. They work at improving their presentation—the look of their facilities and the customer-service skills of their staff. Their goal is to be seen as secure, reliable and providing a good value. Brands play a part in this.
Some storage owners ask, “But what about those great private-label margins?” My reply is: Do the math. Would you rather have 40 percent of $6 or 30 percent of $9? Other owners argue that lowerpriced products sell better. Sure they do, but only when customers are comparison shopping for specific products. In the case of self-storage, tenants have already done their shopping and picked your facility. Now they're a captive audience, so pricing doesn’t have to match that of the “big box" stores.
Like convenience stores and gas stations, you are selling on the premise of time savings as well as price. Most self-storage retail purchases are of necessities, such as locks and boxes, or impulse items, like markers and tape. Convenience often trumps cost in these cases. With important items like locks, people want the assurance brands provide and are willing to pay more to get it.
Does all this mean you should stock only branded products? Well, it wouldn’t hurt, but a lot of self-storage retailers carry brands as well as private-label versions of the same items. They feel it gives them the halo effect of brands while allowing them to offer discount prices.
The next time you go down the aisle of your supermarket or convenience store, really look at the number of branded vs. generic or house-brand products. These are businesses that make their living on retail sales. How do they use brands to build their image, customer base and income? It's never a bad idea to take a tip from experts.
Roy Katz is president of Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including Storage USA, the U.S. Postal Service, Kinko’s and Mail Boxes Etc. For more information, call 800.284.7357 or 216.738.1200.