The benefits of private label
August 23, 2010
Australia’s taste for private labels is
showing no sign of slowing.
In supermarkets across the country
private label products are booming as
consumers look for quality, low cost,
home brands.
And a similar trend is now being
seen in the pharmacy industry.
It’s widely known that private label
products offer pharmacists higher
margins.
But they also offer much more than
that.
One benefit is the ‘come back’
factor of a private label product.
For example, when a customer
chooses a Chemmart® private label
paracetamol product, it helps drive
return traffic as the pharmacy’s brand
is on the packaging.
While this is harder to measure,
there is a resultant rub-off in credibility
and loyalty that pharmacists don’t
get when they sell branded products.
Private label also offers pharmacies
a point of difference over the discounters
- as the majority of these don’t have
a house brand strategy in place.
Typically a pharmacist can expect to
make a higher margin selling their
own branded private label product as
compared with a branded product.
Having a viable front of shop offer
helps to offset ongoing loss of margin
in the dispensary and therefore
private label is crucial to ensure
community pharmacies remain viable
and profitable.
It’s up to us as an industry to
continue to innovate and invest in
the category while simultaneously
educating consumers about the
benefits.
This week’s
contributor is Oskar Hakansson,
Business Unit Director (Consumer
Products), Symbion Pharmacy.
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