Portfolio Optimization

Portfolio Optimization

In the past few decades, the process that determines the product portfolio at a retail store has changed drastically. As recently as ten years ago, it was driven by CPGs, who innovated products and determined categories and offerings for retailers, and even influenced store layout. Retailers’ role in product selection was usually as a “follower,” offering relatively unsophisticated private label or store brands as a value alternative when it was opportunistic. For retailers, this was enough, as it gave them some margin benefits and helped position the national brands as more innovative and of higher quality, justifying their price.

But the strategy is maturing. Retailers now create brand architectures and product portfolios that match distinct consumer wants and needs, often more quickly than CPGs, more nimbly and with equal insight into the consumer.

Brand Portfolios Embody Shopper Aspirations   

At the same time, retailers have learned how to polish their own store images, as Trader Joe’s, Target, Safeway and others now boast enough brand equity to position their store-brand products as high-quality value alternatives to national brands, and their private label products as superior. Consumers increasingly agree with these propositions. Retailers leverage this through other advantages, too. Brands and brand portfolios from retailers like Target, Trader Joe’s and Wal-Mart have come to embody broad lifestyle aspirations of various kinds, and they can leverage this across more categories than most CPGs can.

For all these reasons, retailers have arguably their best opportunity for significant market share in half a century. But to make the most of this, they must present logical, compelling product portfolios to consumers and execute on their portfolio optimization strategies wherever consumers interact with their brands. Schawk and its strategic design company, Anthem Worldwide, are experts at portfolio optimization. We've delivered stellar results for some of the biggest retailers worldwide.