Laurens Sloot

Strategic reactions of national brand manufacturers towards private labels: An empirical study in The Netherlands

In recent years, the quality of private label products and their market shares have grown to such an extent that most consumer goods manufacturers, brand leaders included, can not afford to ignore them. Private labels are, however, not just another generic competitor. The retailer that sells them is also an important account, and the issue includes the question: to produce private label or not? Several authors have recently suggested a number of effective strategies for leading national brand manufacturers against private labels. However, the empirical evidence for the strategies identified is scarce. Using a sample of 101 Dutch national brand manufacturers, we get a better understanding of the sets of strategies companies use. Using an inductive approach, we find four dominant profiles that are linked to performance and are discussed.

The Short- and Long-Term Impact of an Assortment Reduction on Category Sales

In a collaborative study with a major Dutch retailer, the authors assess the short- and long-term effects of a 25% item reduction on category sales. On an aggregate level, a major assortment reduction can lead to substantive short-term category sales losses but only a weak negative long-term category sales effect. Short-term category sales losses are caused mainly by fewer category purchases by former buyers of delisted detergent items. However, the results also show that the assortment reduction attracts new category buyers. These new buyers partially offset the sales losses among former buyers of the delisted items. The collection of supplemental process data on assortment perceptions and actual search time in the test stores before and after the assortment reduction provides evidence that delisting results in an increase in perceived search efficiency and a decrease in actual search time.

Out-of-Stock: Reactions, Antecedents, Management Solutions, and a Future Perspective

In today’s competitive environment, service-oriented retailers are faced with one important question: How can we deliver good service levels to our customers, while becoming more cost efficient at the same time? Superior levels of service to customers are necessary to differentiate these retailers from the strongly priceoriented chains, such as Aldi, Lidl, ASDA, Wal-Mart, and Colruyt. One key differentiator of service retailers is their assortment. In general, service retailers offer more national brands than discounters, and also a wider variety of products. However, offering more variety in products and brands has two important consequences. First, retailers are confronted with more costs in the supply chain, due to higher inventory, procurement, handling, and warehouse costs. Second, more variety also increases the probability that out-of-stocks (OOS) may occur, which may lead to customer dissatisfaction and (temporary) store disloyalty. As service retailers strive to compete with discounters on service, OOS can severely jeopardize their competitive position in the consumers’ mind.

Reducing Assortments without Losing Business: Key Lessons for Retailers and Manufacturers

Abstract To gain efficiencies in the supply chain, retailers regularly consider which items of products or brands they can delist. However, increased efficiency is not granted when products are dropped. Choosing the “wrong” products or brands may result in reduced customer satisfaction, lost category sales, or increased store switching behavior. The detergent assortment reduction at a Dutch retailer showed that sales losses can only be observed in the short run and that the reduced assortment is more attractive, especially to new buyers in the category. A survey across multiple categories revealed that negative effects of delisting are less risky for weaker brands and utilitarian products. Retailers are welladvised to be cautious with dropping strong, hedonic brands and use a set of criteria to make the best delisting decisions. Manufacturers should apply approaches depending on the strengths of their brands when confronted with an impending delisting