After wiping out most of their retail competitors, Walmart has been steadily moving towards controlling the brands they sell. Last week they eliminated the Glad and Hefty brands from their food storage shelves, consolidating to their fast-growing private label brand, Great Value, and the Ziplock brand.
Many anticipate that this will be a sign of things to come across many product catagories, with Walmart consolidating to fewer brands and really promoting their own more profitable private label brands.
Walmart is such a Goliath that these kind of moves could have tremendous consequences for many manufacturers. This could mean the decline of many major American companies, but you can’t really blame Walmart for the move. Consumers probably don’t need – or want to choose from dozens of plastic bag options. Slimming SKUs in favor of more profitable and desireable products seems to make sense in many product catagories for retailers.
But this also points to the need for manufacturers to come up with design and marketing efforts that allow them to control their own destinies, as opposed to just being a low-cost house manufacturer for major retailers. Walmart’s mantra of the lowest price certainly resonates with a huge group of consumers, but a manufacturer that sells on price alone remains continually vunerable. They also need to sell innovation – features and benefits that imbed their product in consumers’ minds and make them a destination brand, with advertising and marketing that reflects this differentiation.