By this time, you all know that while I consent on the occasional cheap-out on products where you can get away with it, I am a strong supporter of investing in quality products (which are typically higher in price). However, sometimes we are duped, or the product doesn’t live up to the advertised expectations that have been set out. What then? Are we resigned to sucking it up, buying a replacement, being out of pocket? Absolutely not.

It goes without saying that you need to save the receipt. While the ideal situation is to save the tags, that’s not realistic. We have all been excited to strut out with our new buy at the first chance we get, tearing off the tags like a cheetah. Shoes - sometimes you don’t know how uncomfortable they can be until you actually walk a mile in them. I have brought in shoes to be returned, scuff marks and all.

The first thing to keep in mind is have a specific reason as to why you are returning a product that you have clearly already worn. Is it poor quality? Already damaged? Uncomfortable? You need to present the salesperson with a legitimate reason. “I don’t like it anymore” isn’t a good excuse. “The product is extremely uncomfortable and painful once you wear it for more than 15 minutes” is acceptable.

Next, be firm. Insist on a return, or some form of compensation (some stores will opt to give you an exchange, a free replacement, or a credit note). Pump yourself up. Make your mind up that you will not leave the store without some form of justice and reimbursement.

If the salesperson turns you down, take it to the manager. Many times, the salesperson simply may not have the authority to make these decisions. Discussing it with a store manager, or an authoritative decision maker, is the next step. If that does not work, research the headquarter contact information and launch a formal complaint with them about your experience with the product and the store. You will find that a form of compensation (many times it comes in the form of a gift card in the value of the item you were trying to return, or more) will arrive on your doorstep. In the case of a national brand product that is sold in many stores, you might find that contacting the actual manufacturer will illicit a positive response.

Be nice about it. Being snarky, rude, and condescending is unacceptable. You will find that the store is much less willing to deal with a difficult customer, and may not think twice about letting you walk away empty-handed. Remember, they didn’t make the product that you are unhappy with. Don’t get me wrong - you still need to be firm and insist on a refund. However, be willing to negotiate, compromise, and have a collaborative attitude. You may not feel like being pleasant to deal with, but having a likable disposition will encourage the store to satisfy you.

Don’t be embarrassed. You paid for a product that you are unhappy with. The performance is not up to snuff. Believe me when I say that retailers see returns on products that have been used and tested out all the time. You aren’t the first, and you won’t be the last. This is par for the course for them. You may want to even change your mindset - you are helping the retailer understand how problematic the product is, and may make them think twice about bringing it back into their regular assortment the following season.

Unfortunately, you will be disappointed from time to time with your purchases. The key thing to understand is that you can rectify the situation after the fact.

Just as swallowing after you take a sip of water, and saying “Gesundheit” after someone sneezes, negotiating when shopping should come just as naturally.  Why do we feel it is necessary to pay the full sticker price?  Do we not want to hurt the salesperson’s feelings, or are we afraid of a confrontation?  Maybe we have too much disposable income.  Whatever the case, retailers profit off of the consumer’s fear of negotiating a lower price.  Especially in these difficult times, consumers are making fewer purchases, resulting in retailers being more willing to cut a deal with a customer who is mulling over a big purchase decision. 

There is no hard and fast science to the art of negotiating - instead, you will get better with experience.  How should a novice negotiator navigate the admittedly murky waters of negotiating?  Here are some basic guidelines:

1) Start Off Small

You need to practice and build up your confidence with small wins.  This will translate into bigger successes once you understand the delicate tango that you must engage in when negotiating with a formidable opponent.  Start with negotiating a tax-free purchase by offering to pay in cash, or insisting on a discount on a volume purchase.  The critical point to take away is to gain more confidence in your negotiation skills, and to practice and refine your bargaining technique.

2) Competitive Shop

Every retailer has a competitor.  They may not carry identical brands, but they do carry products with very similar features and benefits.  For big ticket products such as furniture and electronics, retailers will list specs that you can leverage as a comparative tool.  If the features are similar in performance ability or appearance, regardless of the brand, consumers can push the retailer to price match the lower price or go deeper.  This is an especially effective tactic for products where functionality outweighs aesthetics when a customer is making a purchase decision, as is the case in the electronics business.  Retailers a) do not want to lose your sale, b) want to avoid being embarrassed in the marketplace, and c) hope that they can supplement the loss in the price drop by selling you higher margin accessories that go with your main purchase - in the case of electronics, a television stand to go with your television set.

3) Remember that you are in the position of power

Ultimately, the decision of whether or not to buy is up to you.  It is up to the retailer to convert you from a shopper to a buyer.  A lost sale hurts them more than it hurts you.  While you might be walking away feeling disappointed and a gaping hole stares you down where a shiny new product was itching to be, the retailer loses a lot more.  You are not out of pocket, they are.  A lost sale isn’t just a lost sale.  It is the cost of inventory, costly retail space being occupied, the depreciation of the value of the product, and inventory carrying costs.  They are far more concerned about moving through the product than they may let on. 

4) They expect you to negotiate.

This is especially true for big ticket items, or independently owned stores that don’t need to report to a corporate head office, as well services.  There is margin built in to every product, and that is what the retailer makes money on.  However, the amount of margin can vary by commodity.  There is an obscene amount of margin in what is referred to as ’soft lines’ of business (these are goods such as apparel and accessories, cosmetics, bedding, and draperies), while ‘hard lines’ work off tighter margins (goods in this grouping are electronics, tools, furniture, and fitness machines).  Regardless, this means there is room for the retailer to move down in price. 

For soft lines, you can ask for a deeper discount, as the retailer already makes more money on these types of products.  Hard lines are a bit tricky, as the amount of money made on these goods is much smaller.  However, this doesn’t mean that there isn’t still room to negotiate.  In fact, retailers in hard line businesses expect you to negotiate.  These are high-priced products, and they realize that a purchase is a big monetary commitment on your part.  They never expect you to pay the sticker price.  The sticker price exists to a) capture any suckers who are willing to pay it, and b) keep the marketplace in check – if word gets out what deals salespeople are moving product out at, this could causes a price war in the industry that some retailers do not want to engage in.  Chances are, suggest a lower price and they’ll take it.

Owners of independent stores or boutiques work for themselves.  They don’t report into corporate margin requirements.  As a result, they are much more willing to have a discussion with you and settle on a price that you are willing to pay.  Another critical factor is inventory costs.  While corporately owned businesses have stock and assortments pushed on them, they don’t own the inventory – their corporate parent does.  Independents, boutiques, or dealer stores own their inventory and are paying carrying costs on it every single day that it’s not sold.   The owner is probably very willing to cut you a deal on slow movers or excess stock.  Just ask and you will (most of the time) receive.

5) Ask for more than you expect

Don’t let the retailer tell you what the discount should be – tell them what you are willing to pay.  However, in order to put forth a perception that you are being reasonable, start off with an aggressive request.  Ask for free accessories plus a 50% discount.  It’s a slim chance that you’ll get either.  But you may get a 30% discount and a few free or discounted add-ons.  This is the point in the game where you may begin to feel embarrassed, or even unreasonable, with what you are asking for.  This is part of the dance – it takes two to tango.  What fun would it be if the sales person just took your first offer?  They expect to this to happen, they are prepared.  They have their dancing shoes on, if you will.  They will counter with a more reasonable offer that is also desirable.  You may choose to accept it, or push the action.  Regardless, you have level set them with your expectations.  Always ask for more – retailers have a standard discount that they offer consumers when asked.  However, they are usually willing to go lower if you demand it.

6) Don’t Give Up

Indeed, there will be times when you will be outright shut out and refused a discount.  However, knock on enough doors and some will open for you.  If you are rebuffed by a salesperson, ask to speak to the decision maker – the store or general manager.  Sometimes, the salesperson is just not comfortable making the call.  Someone with some level of authority and accountability is usually able to wheel and deal with a consumer without as much of a fear of consequence.  Remember, “It’s not whether you get knocked down, it’s whether you get back up”.

Use these tips as guiding principles the next time you make your shopping list.  I encourage you to experiment, do your research, and understand what tactics and approaches work for you.  Negotiating is a key fundamental code to shop by for the smart shopper.  Get out there, use your judgment, evaluate your surroundings and the products, and don’t be shy.  You may be surprised to learn that you’ll find a willing partner in the retailer.

Happy Shopping!

*** First, read my post “The Great Debate: National Brands vs. Private Labels”

We have arrived at the last part of the Great Debate series - Hardlines.

This is an area of the National Brands vs. Private Label war that has just recently become an interesting face-off to watch.  Goods in this category are products that are not made of fabric or textiles, and are constructed of rigid and solid materials such as wood, metal, and ceramic.  Examples of hardline merchandise are items such as tools, hard coolers, dishwashers, cabinets, bed frames, dining room tables, and vases.

What is my recommendation in for the consumer in hardlines?  National Brand, or Private Label?  It’s a Draw.

Here’s why:

1) Commitment to Quality

Typically commodities within hardlines adhere to strict guidelines that are managed by a higher governing authority.  In many cases, these products could causes harm to the consumer or deteriorate in quality and performance if certain standards are not met.  For example, all power tools - whether it’s a national brand like Black and Decker, or a private label like Craftsman or Mastercraft - must meet the CSA standards.  These benchmarks are established in order to set minimum levels of performance and safety to protect the consumer from potential injuries and product defects.

In addition to performance and safety standards, the overall quality level of hardline goods is typically more consistent than their apparel and accessory counterparts.  Sure, you will find cheap and merchandise in student-housing condition being hocked.  However, for the most part, consumers shopping this category are looking for, at a minimum, mediocre to stellar quality products that are durable, perform well, look great, and are reliable.  National Brands understand this and have been manufacturing products with this mindset for years.  However, Private Labels have seen the light, and are manufacturing their goods in this manner as well.  They realize that this business is very brand loyal, and they will lose brand equity if they do not keep up with or surpass National Brands in this area.

Lastly, it helps that some Private Label products are actually manufactured by National Brands.  This is nothing new.  For the most part, this has been a common theme throughout the Great Debate series.  It should be no surprise that this would apply to the hardline group as well.  Remember, this is a way for the national brand manufacturers to capture more dollars and share of the market, without diluting their own national brand name.  They attach a Private Label to a generic product that may not necessarily compete directly with a manufacturer’s own National Brand, at the same time allowing the manufacturer to eat up a bigger piece of the proverbial market share pie.

2) Personal Style and Preference

Each brand, whether it is a National Brand of Private Label, has a style aesthetic.  The National Brand builds it’s products and very name on what it stands for and represents.  It has a very specific vision that it follows and tries not to stray too far from it’s belief principles, so as to not alienate strong brand followers.  Likewise, Private Label products also follow a certain code of style.  However, it is much broader.  It may be less specific and narrow.  Private Labels create their products with the retailer’s target market customer in mind.  The customer that walks into the retailer’s store location that buys a skirt must be just as likely to be drawn towards a Private Label product in their hardline commodities.  This is a particularly unique situation for Private Labels - their brand is more likely to span a variety of commodities, versus the National Brand.  Consistency in the look, feel, and performance of the product must be the same across all businesses that carry that Private Label name.

Therefore, it is up to the consumer.  If they prefer a more concentrated and focused approach to the look of their products, they will probably find what they are looking for in National Brands.  Typically the shopper is drawn to what the brand itself represents, and how it translates that into the products.  Pieces that embody what the retailer overall views as their overall target market is where Private Labels fit.  If a consumer is a frequent shopper of that particular retailer in other categories, they might find that the retailer represents who they are, and therefore so does the product.

At the end of the day, it is up to you to determine what you like, and what fits into your life.

3) Price Point

Price points in hardline commodities are all across the board.  You will find Private Labels priced higher or lower than National Brands.  It is not as hard and fast as groceries and apparel, where 90% of the time the Private Labels cost less than comparable National Brands.   In hardlines, it is all over the place.  While the consumer is thinking about price, the overwhelming decision maker is based on quality, performance, and appearance.  Hardline products are a more permanent fixture in a consumer’s life than, say, a t-shirt.  As a result, price is less of a deal breaker (for the most part).  Since point #1: Commitment to Quality is a standard in most hardline goods, this already puts the Private Label and National Brand manufacturers on a level playing field in terms of expense management.  The guts of the product, if you will, are the same.  The cosmetic part of it, the bells and whistles, are marginal in cost to the manufacturer.  As a result, you are really not saving boatloads of money if you choose a Private Label over a National Brand.

Ultimately, the choice is up to you.  There are so many subjective factors to take into account in the hardlines business that can only be determined by you.  However, whatever the decision, make certain that you are happy with it.  Hardline product purchases should be predicated on the fact that you like the performance ability, the quality level, how it feels, how it looks, how it can be incorporated into your life, and whether you can afford it.  In this category, brand is the last thing that I would be concerned with - your satisfaction is the decision maker.

*** First, read my post “The Great Debate: National Brands vs. Private Labels”

It’s a fact – a lot of work goes into looking and feeling good.  Actually, to be more accurate, a lot of money goes into looking and feeling good.  It doesn’t have to be that way, though.  How can we make sure that we aren’t spending more than we need to when it comes to our Health and Beauty regime?  This arena is where an intense battle is being fought among National Brands and Private Labels. Traditionally, consumers of this category have been fiercely brand loyal (as in, loyal to their respective National Brand).  However, in recent years, retailers have done a great job marketing their Private Labels as premium quality products – it is almost to the point now where a consumer who is not familiar with a retailer’s Private Label brand may mistaken it for a National Brand.

So the question is, what is my recommendation for the Health and Beauty consumer – the cost efficiency of a Private Label, or the consistent quality and performance of a National Brand?  This is a difficult question.  To answer it, I have segmented the Health and Beauty category into four fundamental groups:

1)   Cosmetics: Verdict – National Brand

2)   Vitamins and Supplements: Verdict – Private Label

3)   Bath and Body: Verdict – Private Label

4)   Skin Care: National Brand

Here’s why:

Cosmetics

National cosmetic brands are constantly innovating to differentiate themselves from their competitors.  From oscillating mascara brushes, to organic mineral foundation, and even foundation that evolves from a white cream to a shade that is personalized to your skin tone - National Brands are relentless in their pursuit of being first to the table with new technology and novel ideas and products. 

One thing that consumers need to be aware of is that the Cosmetics business is one of the highest margin categories that a retailer can participate in.  It costs relatively little to hold in inventory, is easy to merchandise, national brand manufacturers are always game to participate in displayers and marketing material (at no or little cost to the retailer), and the merchandise pays back the retailer 10-fold what they invested into it.  The only drawback is that some makeup products do tend to have expiry dates, which puts the retailer under constrictions to sell it within an allotted time frame.  However, this can be managed by intelligent forecasting and inventory management on the part of the retailer. 

Another key thing to note is that Cosmetics is a business where consumers are extremely brand loyal.  National Brands invest millions of dollars into new product launches, research and development, brand marketing, and customer retention and expansion.  Cosmetics is all that they do.  Private Label cosmetics, however, are a commodity among a sea of categories that any given retailer sells.  Relative to the marketing dollars that a National Brand devotes to its brand and products, the Private Label marketing seems paltry.  It is still worth it for a retailer to be a convenience player in the cosmetics industry because of the fat margin that they demand, but it does not make sense for them to invest in the research and development and product improvement.  They are simply outmatched in every aspect of this business.

The bottom line is, what are you comfortable with putting on your face?  Option #1 is a company and brand that specializes in cosmetics, invests dollars into research and development to refine current products and formulate new ones, and has built their brand on the success of perfecting their craft and making people look beautiful.  Option #2 is a brand that wants to participate in the business for the sake of having some level of presence, offers convenience for the customer, but above all else is in it to make money.  Option #1, the National Brand, is the obvious choice.  Your face is the first thing people see - leave it to the experts.

Vitamins and Supplements

This is very similar to the grocery business (see my post “The Great Debate: National Brands vs. Private Labels > Part 1 of the Series: Groceries”).  There is a better cost-benefit value for the customer to purchase the Private Label product.  Most of the time, the manufacturer produces the product at a mid-tier to premium level - or at least, that is the way it is packaged and marketed to the consumer.  In reality, vitamin A is vitamin A.  It isn’t vastly better or worse from brand to brand.  If you read the content labels, the percent and proportion of particular vitamins and supplements that go into a product are nearly identical from National Brands to Private Labels.  In fact, more often than not, the Private Label product is actually produced by the National Brand manufacturer.  This is their way of being able to increase their share in the market by utilizing different brands.  Rather than take their mid-tier or premium level (and priced) brands and lower the price point or off-price it at frequent discounts, they are willing to sell the retailer the same product and slap on the Private Label brand.  This way, they are able to hit both ends of the market, capture more share, and maintain the high quality perception of their National Brand. 

In essence, if you purchase a National Brand in this category, you are paying for the brand name.  A name won’t make you healthier.  Opt for the Private Label.

Bath and Body

This is the exact same rationale as Vitamins and Supplements.  Yes, the packaging on the National Brand may be prettier, and a few exclusive ingredients may not be included, but the key is that the core components are the same.  Most of the time, it is the same manufacturer producing a Private Label and their own respective National Brand.  They receive economies of scale by buying or producing their ingredients en masse, as opposed to doing so separately.

Unless there is a patented composition or ingredient that solely exists with a National Brand and cannot be replicated, veer to the Private Label.

Skin Care

By Skin Care, I am referring to creams and tools to help care for your face.  The underlying principle here as to why consumers should steer themselves towards National Brands is the same as that of Cosmetics.  Companies that own National Brands understand that they must differentiate themselves from the other myriad of brands and products that exist in the marketplace.  Countless products exist to combat aging, acne, and dark under-eye circles.  Being first-to-market, established as an innovator, and showing results are critical components to succeed in this business.  National Brands invest the money into perfecting their products, educating the consumer, and developing new products.  They are experts in the field.  Retailers simply participate in this category via Private Labels to profit off of the vanity of people.  They do not keep an authority in the field on staff, do not invest heavily in research and development, and are not there to create the latest and greatest product.  Private Labels in this industry exist, for the most part, to participate, not to innovate.

Do not subject your face to a product that views you essentially as a cash cow - treat it with care, and leave it with a National Brand that specializes in the business and attributes its success to the product actually performing.

This has been a lot of information, but it is essential to you being a smarter and more decisive shopper.  The Health and Beauty business operates within a high margin industry, where companies (whether it be the retailer or manufacturer) are lining their pockets, honing in on society’s obsession with looking and feeling good.  You might as well spend wisely, and expend your funds in an intelligent way.  Get the most bang for your buck, and look great doing it.

Get ready for the last part of my Great Debate series.  I will be investigating the business of what retailers referring to as Home and Hardline categories.  These include Furniture, Home Decor, Electronics, and Tools.  What is the best path to take?  The well-established National Brand, or the relatively recent surge of Private Labels?

In the meantime, Happy Shopping!

*** First, read my post “The Great Debate: National Brands vs. Private Labels”

The opulent texture of a cashmere sweater against your skin, and the way the face of your watch catches the light puts forward the image that you are dripping with luxury.  Maybe that’s too much.  We don’t want to be tacky, after all.  However, most of us care about presenting ourselves in a chic, sophisticated, and tasteful manner.  This includes not looking cheap, although, it does not mean spending money beyond the appropriate value of the product.

Do brands matter?  Is being a slave to the label worth it, or are there private label products that can accomplish the same goal?  The answer is complex - it is a little bit of both.  See my post “When to Cheap Out and When to Shell Out” for an idea of pieces of apparel and accessories you should skimp on or invest in.  In general, the items that you can “cheap out” on can be private label or no name products.  However, when we start thinking about items that you should invest in, you must start thinking much more carefully about the National Brand versus Private Label value proposition.

Generally speaking, which direction should you veer towards when it comes to investment pieces in Apparel and Accessories (A&A)?  The Answer: National Brands.  Here’s why:

1) Brand Equity Equals Consistent Quality.  What I mean by this is, part of the success of a major National Brand is the quality that it is able to maintain.  Quality is literally a key attribute in why national brands cost more, when it comes to A&A.  A drop in the quality of the goods will be met with backlash from the consumer.  No consumer will pay for inferior product.  On the flip side, retailers use Private Labels as a way to a) knock-off a cheaper and - in most cases - a lower quality version of a National Brand’s collection,  b) make money by enjoying higher margins, and c) making the product accessible to a mass audience.  However, fabric, durability, cut, materials, and construction will be inferior to the National Brand.  First and foremost, the retailer wants to make money.  Cheap-out buys are fine for items that are not statement pieces, or the foundation for your wardrobe.  Be prepared to suffer the consequences - frequently used accessories will fall apart, and apparel will lose its shape and resilience in short order.  In contrast, National Brands receive their reputation part in parcel due to their strong structure, material choices, and commitment to timelessness.  Fundamentally speaking, you only need to invest in the National Brand once, whereas the chances are exponentially higher that you will be a repeat purchaser of the same Private Label product time and time again (that is, if they even stock the product over one season).

2) Strong Design Aesthetic.  The bottom line is that National Brands have dedicated designers that focus on ensuring a strong element of edge, intention, and style is incorporated into every piece. Their captive audience is one that appreciates attention to detail, both subtle and standout designs, and thrives on being ahead of the curve and setting the trend.  The pieces they look for are traditionally on point with their personal style and the evolution of social norms, not fleeting fads.  Private Labels, on the other hand, are part of the pack that is following the National Brand alpha dog.  They produce for the masses.  There is no dedicated design house.  Instead, the retailer seeks out factories that can balance mediocre quality and design, with a low cost.  And most of the time, it looks that way.  Cookie cutter, about 70% there in terms of construction, shape, and texture.  For statement or foundation pieces, 100% is a must.  Anything less can derail the impression that you are trying to portray.  Nobody wants to be in the pack. You want to be the alpha dog.  As the saying goes, the view never changes if you’re always the follower of the leader of the pack.

3) Unique Style Identity.  All National Brands have a personality, characteristic, or attribute that makes them unique.  I’m not referring to the brand’s logo or label being plastered all over your clothes or accessories – depending on the situation, it can be tasteless.  Instead, I am speaking more to what the National Brand’s philosophy is, their point of view, and whom they design for.  Let’s use high-priced luxury brands as an example – Burberry versus Marc Jacobs.  The Burberry consumer loves classic pieces, strong tailoring, and a neutral colour palette.  Although she has a preference for timeless pieces, there is also a stylish, chic, and smart slant to her approach that keeps her one step ahead.  The Marc Jacobs aficionado is edgy, daring, and loves to make a statement.  There is a slightly dark and mischievous element to this customer’s wardrobe.  She appreciates artistic sensibilities and dresses for no one but herself.  Two National Brands, very different style identities.  What you wear represents who you are – you can tell a lot about a person by how they put themselves together.  National Brands that have those similar characteristics as you make stepping into their collections a natural, and allows you to epitomize yourself in their unique pieces.  On the other hand, Private Labels don’t necessarily carry such a strong style identity.  While the retailer may have a target market, the apparel and accessories of a Private Label is really geared towards making money and not zoning in on a particular segment of the market.  Part of this is producing products that appeal to the masses, which translates into a weak identity and what or who the label represents.  No personality, no excitement – in short, it’s boring.

Keep in mind that these guidelines are for investment pieces.  Use your judgement – a basic white t-shirt that is probably fine to cheap-out on.  A pair of boots?  Not so much.  Remember to check out my post “When to Cheap Out and When to Shell Out” for my recommendations.  As always, I encourage you to shop around and weigh your options.  Some Private Labels rival National Brands, but they are few and far between.

I hope you’re ready for my next post.  It will be Part 3 of the Great Debate: National Brands vs. Private Label series.  I will examine the merits of National Brands and Private Labels in the context of the Health and Beauty category.

Happy Shopping!

*First, read my post “The Great Debate: National Brands vs. Private Labels”*

For those of us unlucky enough to not have the fiscal resources to sustain eating out every single meal, grocery shopping is a fact of life.  Fortunately for the consumer, not only have the Private Labels been expanding to previously uncharted territories (boxed soup, dairy products, produce, and frozen meals), but the quality of the goods rivals that of many National Brands.  

I want to take a step back and explain a brand or product hierarchy.  Retailers communicate the quality of a product through a) the brand and b) the price.  The hierarchy of a product can be slotted into three main groups: Good, Better, Best.  Good is your opening price point, basic, no frills, mediocre quality product.  It’s typically the cheapest option, and you get what you pay for.  Better is a step up from Good.  It is your mid-tier product.  The quality is better, the national brands typically start cropping up here, and the selection is usually broader.  Lastly, you have Best.  Best is the cream of the crop, if you will.  The premium goods.  The national brands are proportionally the heavy players at this layer.  The quality is top notch, the prices are much higher than Good and Better options, and you can pretty well guarantee that you will be happy with the product (I never said you would be happy paying the premium price, though).

So what do I recommend for groceries?  Go for the Private Label.  Here’s why:

1) Better Cost-Benefit Value.  90% of the time, the manufacturer that makes the Private Label Good product also makes a National Brand Better or Best product.  They don’t want to dilute the equity that they have built into their national brand, but they want to make the money and capture the share that exists in the Good tier of the category.  How can they do this?  By making the product, and slapping the retailer’s brand on it.  The ingredients and components are the same quality as the Better and Best products that they produce.  They may omit a few specialty ingredients here and there (after all, it is the lower end product) to differentiate it from the Better and Best levels, but you are not getting an inferior quality product.  While my belief is that you get what you pay for, what you are paying for is an excellent product that is composed of ingredients with the same attributes that exist in the Better and Best products.
Manufacturers that have National Brands in the Good tier do not necessarily play in the Better and Best businesses.  As a result, you can’t guarantee yourself that quality of product that you are getting.  If they exclusively produce products in the lower end level, they are buying their ingredients lower end.

With all this being said, the same principles apply when dissecting the Better and Best levels of Private Label products.  After all, if their entry point, lower quality offers are of good value, the same or even better translates for the higher up the tier you go.

2) Private Label is much cheaper.  The retailers don’t have to take on the inherent cost for the right to carry a Private Label because they own it.  National Brands have to be marketed through various media outlet.  Who do you think foots the bill for that marketing budget?  The consumer.  The manufacturer builds it into their initial cost to the retailer, and the retailer passes it off to you.  Retailers don’t need to market their own Private Label products in the same way.  Sometimes, just leaving it on the shelf next to a National Brand is enough positive marketing for the Private Label product.  Without having to concern themselves with the built in marketing and miscellaneous costs of a National Brand, retailers can produce a Private Label product, sell it at a lower price than the competing National Brand, and still make more money on it.

3) Innovation and Exclusivity.  Don’t get me wrong - National Brands have fabulous innovative products.  However, at the same time, they can be limited to what they are willing to experiment with due to what their brand represents.  I have seen Private Label potato chip products with flavours such as Tandoori and Curry.  National Brands?  Nada.  In the grocery business, in fact, we have been seeing National Brands knocking off Private Label products.  Retailers differentiate themselves from each other not only by their labels, but by their exclusive products.  One of the only ways they can secure exclusive products is by innovating a new product, under their own label.  The manufacturer cannot sell a Metro brand or Publix brand to another competing retailer.  They could certainly do it if they had manufactured it under their own national brand, though.  By handcuffing the supplier to producing the product for the retailer’s own brand, the retailer can at least be assured that the vendor cannot sell the product to a competitor.

Of course, this is just a guideline.  I encourage you to experiment, test out both Private Labels and National Brands, and see what you like.  While I recommend that Private Labels are the best value buy (in terms of quality, price, and innovative products) if the option exists, it is ultimately up to you.  

Look out for my post next week on Part 2 of The Great Debate: National Brands vs. Private Labels series.  I will be exploring Apparel & Accessories, and recommending whether to be a slave to the label, or a supporter of your local store’s brand.

Happy Shopping!

As though there wasn’t already enough confusion surrounding the sea of brand name goods in the marketplace right now, regardless of commodity, a new category of brands has cropped up and taken an aggressive stance in the consumer goods landscape.  Private label products have existed for some time now.  However, in recent years, the production, marketing, and quality of these goods have been ramped up to the n^th degree.  Let me take a step back – what is a private label product?  There are two core brand strategies (there is also a licensed brand tactic, but it – depending on the licenser – may be treated as a private label or national brand strategy) that exist: the National Brand and the Private Label. 

A national brand is a brand name that is available and promoted to a national market.  More often than not, they are owned by large manufacturers that produce the products.  Examples of national brands are Coleman, Maytag, Nike, General Mills, etc.  These are brands that are recognized as being associated with a variety of retailers, but are promoted as their own entities.

A private label is a brand that is only available at a specific retailer.  Consumers can only buy Life brand products at Shoppers Drug Mart.  The W label is accessible solely at Walgreens, and nowhere else.  Kenmore and Craftsman are private labels?  You bet.  They belong to Sears.  Private label products are produced for, sold exclusively at, and owned by the retailer.  This is advantageous for the retailer, as they can make more margin from each product, can control the marketing of it, undercut the national brands to create a better value proposition for the consumer, and generate exclusivity around the brand.

So among the geography of national brands and private labels, how should we navigate our way through to reach our final destination?  How can we ensure that we are getting the best value product that meets – no, surpasses – our expectations?  The answer is complicated, as it varies by product type.

Over the next few weeks, I will be doing a four-part series on National Brands vs. Private Labels, breaking it down by commodity:

• Groceries
• Apparel and Accessories
• Health and Beauty
• Home and Hardlines

Stay tuned for my tips, tricks, and methods on how to dissect the brand and product landscape.

Happy Shopping!

Evolution.  It’s a natural progression, development, and refinement, of elements in nature, technology, and lifestyles.  Things get faster, stronger, crisper, more focused, better.  The mall and boutique stores have by no means gone the way of the dinosaur, but we can all agree that it is no where near cutting edge. 

There is something to be said for the touch-and-feel interaction that a customer gets from shopping at a retail store location.  The feel and texture of the fabric, the fit, real life dimensions of furniture and electronics, as well as the benefit of cross-promotional merchandising to give you ideas are all the obvious pluses of shopping at a store.  However, we are all aware of the minuses – smothering sales staff, crowds, line ups, running into people who you can’t stand, battling for parking.  The list goes on.

The good news is that online shopping has become mainstream.  Large retailers, small independent business owners, and auction and public forum sites such as Ebay and Craigslist (see my post “The Clever Craigslist Shopper”) have opened up a virtual shopping centre that has no borders, no line ups, no sales staff, no irritations.  Online retailers are getting better.  There are close up swatches of fabric to get a better idea of the consistency of a material, virtual rooms that you can create to understand how a large piece of furniture would fit in any given square foot of space, and product suggestions based on other items that you have viewed and/or purchased.

Regardless of these advancements, there are still a few tools that every online shopper should know about in order to be confident and feel good about their purchase.  I am taking you back to school to learn the basics – Online Shopping 101.

Price Comparison Sites

Sites such as www.bizrate.com, www.shopping.yahoo.com, and www.beatmyprice.com exist to make your life easier.  Put away your running shoes.  Rather than darting from store to store to do some competitive shopping between retailers, these sites do the grunt work for you.  Once you enter in the criteria of what you are looking for, these sites will populate a list of where you can find the product, at what price, and the associated features and benefits to allow you to narrow down the field to potential products that you would like to explore.

Product Reviews

Nothing is more valuable than an actual consumer’s opinion about a product.  Most retailers are actually very good about posting the good, the bad, and the ugly reviews that customers have sent in.  This allows them to get better idea of how to improve their products and use it as a point of leverage when negotiating with their vendors.  There are aspects of a product that a retailer may not have thought to list in the copy description, but that a consumer may be concerned with.  I was once dissuaded from purchasing a dress online because there were several reviews that indicated in the heat when you sweat, parts of the dress actually morphed into a different colour.  I was not interested in the hippie-tie dye look.  Use these reviews.  They are honest, convey real life experiences with the product, and may give you more information than what the retailer was able to provide.

Coupon and Promotion Codes

There are sites that exist to make your life easier.  Rather than you having to do a Where’s Waldo for coupons related to a particular retailer or product/service type, you can visit sites that consolidate great coupon deals and promotions.  Sites such as www.retailmenot.com, www.redflagdeals.com, www.smartcanucks.ca (for the Canadian readers), post coupons, exclusive promotions codes that you can use at a retailer’s website at point of purchase, and flag hot promotions. 

Retailer Sites

Retailers are thinking creatively during these trying economic times.  They need something to incent the shopper to convert into a buyer.  Many of them do this through exclusive online promotions.  Not willing to take a dramatic profit risk by exposing deals or special promotions in store, more often than not the retailer will take that unique offer to their online channel.  Scour the sites.  Usually, big retailers will have a ‘promotions’ section, or offer promotion codes right on the main homepage.

Excess Inventory Sites

There are sites that specialize in buying excess inventory from retailers, or even last season’s goods, and mark them down (sometimes as much as 80% off).  Retailers need to make room for the next season, get rid of potential dogs, or even may have purchased too much of a good thing.  They need to unload and liquidate their inventory to make room for the upcoming season and the next trend.  This desperation is how sites such as www.smartbargains.com and www.overstock.com are able to offer great garments, accessories, and home decor at a steal. 

Pick up at the Store Location

If possible, think about picking up the product at the store location.  This will save on shipping costs, and still allows you to avoid the checkout line. 

These very basic guidelines should be able to help you become an intelligent online shopper.  The online channel has become an entirely new avenue, almost separate from the traditional retail store model.  Learn about it, be comfortable, start off with small purchases to get the hang of it, and be smart about your purchase. 

Class dismissed.

Happy Shopping!

Who hasn’t been blindsided by their significant other wanting to end things?  Everything seems fine, going along smoothly, and then the unexpected.  You are told that things just aren’t working out for them.  They need to try something different, experiment, move on.  They are ending the relationship.  No, I’m not talking about your romantic relationship.  I am talking about a relationship that is deeper than that.  Is it more superficial?  Potentially, yes.  Does that make it any less important?  No.  One of the most punch-to-the-gut feelings that we can feel is when a cosmetics company decides to end their relationship with us and discontinue our favourite tried and true cosmetic.  In effect, they have initiated a break up.  You have to find something new to replace it, but you don’t want to.  Everything was going so well.  The relationship saw you at your most hideous, and made you a better person on the outside.  How can you ever recapture that feeling?   

Ladies – and some gentlemen – we can now squeeze some more life out of this relationship.  A good relationship is worth fighting for.

There are a host of sites and companies that make it easy for you to find your favourite makeup that has been discontinued by their cosmetic companies.  Be warned, supply is always limited.  You should still continue to seek out alternatives.  However, these sites can help you make that transition much easier, and extend your relationship with your foundation, blush, eyeliner, and night cream a little bit longer.

Websites

www.cosmeticsandmore.com

www.discount.makeup.com

www.beautyencounter.com

Cosmetics Companies

Estee Lauder: “Gone But Not Forgotten” program

 Lancome: www.lancome-usa.com

 Nars Cosmetics: www.narscosmetics.com

 Mixologist

www.threecustom.com: This site actually recreates your favourite cosmetic in their own magic makeup lab.

What exactly is a “recessionista”?

According to urbandictionary.com, a recessionista is a “person who is able to stick to a tight budget while still managing to dress stylishly”.  When you get down to it, it is a fashionista who is able to maintain her great sense of style and even elevate it during rough economic times.  Before you can fully understand what a recessionista is, let me give you my definition of what I believe a fashionista is.  A fashionista is a person who has a keen sense of style.  She does not jump on every mad trend and attach herself to it like white on rice.  She knows what looks good on her body, adapts her clothing to her lifestyle, and is able to mix apparel and accessories of different price point ranges.  She is not a slave to the label, but seeks out quality items for statement pieces.  She knows how to mix high and low, new and vintage, and has a style identity.  With that being said, should there ever be such a thing as a recessionista?

As I have been reading articles, watching news reports, and just listening to shop talk, the term “recessionista” keeps rearing its head.  When I skim through the tips and tricks of recessionistas, I cannot help but think to myself that people should be shopping like this anyway, regardless of their financial situation.  Quite simply, I do not believe in the Recessionista.  At the end of the day, a recessionista is someone who is a smart shopper.  Shouldn’t we all be smart shoppers, every time we shop?  Even if we’re rolling in piles of money?  Yes.  As I always say, the worst thing that you can be is an ignorant shopper - ignorant of prices, ignorant of what works well on you, ignorant of the definition of your style, ignorant of negotiation tactics, and ignorant to new styles.  I believe we should all be smart shoppers all the time - not just when we are in a recession.

It just isn’t practical or smart to break the bank on everything.  Ever.  Shopping is fun, but your purchases should be well thought out.  Even when you need to tighten your belt because the money doesn’t flow like the Nile anymore, people should not buy poor quality, tacky products on key pieces.  I suggest that you save up for your purchase.  Yes, it might take you four months instead of two months to have enough to take the plunge, but it is so worth it.

Particularly where I’m from (Toronto), there’s a strong community of vintage stores with a broad assortment.  This is key for anyone who wants to quickly update their wardrobe with unique, rich, luxe, BUT affordable pieces.  Toronto: What are some hidden vintage gems and old faithfuls that we can turn to in our city?  Readers: Do you have your ear to the ground from the city that you call your home base?  Let me know if you have some places and tips to share and I’ll post them. 

69 Vintage Buy the Pound (1234 Bloor Street, W.)

-          You are literally charged by the weight, not the actual piece ($15 cash per pound).  This means you can get some great quality and brand name pieces at a steal!

Black Market Vintage Clothing (319 Queen Street,W.)

-     Vintage clothing and accessories

Kensington Market

-      Toronto’s Mecca of vintage stores

Act Two (596 Mount Pleasant Road)

-       Consignment store

Second Nature Boutique (514 Mount Pleasant Road)

-        Consignment store 

Preloved Vintage (613 Queen Street West)

-        A vintage store that specializes in the redesign of vintage clothing

Off the Cuff (5 Broadway Avenue)

-       Designer resale store exclusively for the fellas 

For more smart shopping advice, check out my post “When to Cheap out and When to Shell out” for tips and tricks on what you can trim back on and what you should really invest in.   

With these tools in your arsenal, you now have the foundation to look and feel fabulous without your bank account going into the red. 

Happy Shopping!