UNCONTAINED: Store loyalty vs. brand loyalty

It seems that the good folks at Walmart got a little too aggressive with their brand pruning. More...

I’m sure the hearts of brand managers everywhere were gladdened by this Advertising Age article by Jack Neff (one of the best writers I’ve ever worked with). It seems that the good folks at Walmart got a little too aggressive with their brand pruning. They had cut hundreds of brands to simplify shopping, and also to make room for their new Great Value store brand. But a drop in sales in the fiscal fourth quarter-the company’s first ever-led them to rethink that strategy. They found that 1) shoppers get annoyed when they can no longer find their favorite item and 2) even if an item doesn’t have a big market share, it doesn’t take many alienated shoppers to put the brakes on sales. This phenomenon was especially noticeable in food. Walmart is now restocking hundreds of brands and items, and reevaluating its plans to cull others.

This is good news for brand managers who have felt abused by Walmart and other big retailers. It’s not necessary for a new product, or package, to blow away the market to be successful. Finding a niche, even a small one, is important if it builds a core of consumers who would seriously rethink their store loyalty out of brand loyalty. And packaging can often lead the way to such a niche.