In a series of strategic and tactical moves, 7-Eleven has announced its plan to boost private label product shelf space and debut in-store television to help suppliers promote in-store specials and brands.
Just last month, 7-Eleven launched 15 new private label products and announced its plans to launch 40 more by the end of 2009. With 200 private label products in production, 7-Eleven also announced that more private label product roll outs will happen in 2010.
One might wonder how suppliers of branded products feel about 7-Eleven’s private label push. For some reason, I don’t think the introduction of 7-Eleven TV which should roll out to 6,200 7-Eleven locations by the end of 2010 is going to fully appease them.
7-Eleven TV will play a loop of 4-minute messaging (the average time consumers spend in 7-Eleven), which companies can pay to advertise on. 7-Eleven private label brands will be promoted on 7-Eleven TV in 7-15 second commercials every 4 minutes (20 spots will run per hour). Content will also be provided by news and weather organizations, RSS feeds and other partners and will be timed to air at the most relevant times of day.
No word on how much it costs to advertise on 7-Eleven TV.
Of course, it makes sense for 7-Eleven to introduce more private label brands. Companies typically make more money on sales of private label branded products than products from other companies. Why not fill their store shelves with as many private label products as possible? And why not fill 7-Eleven TV with ads about its own, higher margin, private label products?
But what will suppliers think? Do you think they’ll mind the potential loss of sales at 7-Eleven convenience stores? Already, 7-Eleven reports seeing sales of some of its private label products, such as chips, at higher levels than popular brand names. If you combine the horrible economy with a private label push, is the 7-Eleven business model poised for a major change?
What do you think?
Read more about the private label trend in these Corporate Eye articles:
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