STM or Private Label is a trademark owned by a retail chain (super or hypermarket). In Ukraine and Russia, STM sales have been growing steadily over the past few years. This process especially accelerated after the 2014 crisis.
In July 2016, the share of STM in the ATB discount supermarket chain amounted to 24.9% in the assortment list and 24% in the turnover. And it continues to grow. In 2016, Retail Group (“Velmart”, “Velika Kishenia”, “VK SELECT”, “VK Express” and the Moldovan chain Green Hills Market) reported that the share of STM amounted to 6.2% in their turnover. The same indicator for Eco Market was 7.5%.
All STMs fall into 3 main price categories:
- discounters or the low-price segment of products;
- mid-price segment;
- premium brands (in Ukraine they are less common than discounters, but they are the most promising, as far as profit is concerned).
In Eastern Europe, the share of STM in the total turnover of chains is still low. Today in Ukraine STM accounts for no more than 10% of sales. In Western Europe, the figure reaches 30%. The main opportunity for retailers is the development of premium STM. Further growth of the Private Label category will be due to elite STM. At the beginning of 2016, 6% of the Ukrainian population purchased STM once a week or more often. Even today, according to Nielsen Ukraine surveys, more than 50% of Ukrainian shoppers are ready to switch to STM. However, the assortment available in retail chains is not yet ready to meet their needs.
Another peculiarity of the Ukrainian market is that STM growth in 2016 was mainly driven by non-productive categories. These include detergents, household goods, care and decorative cosmetics and pharmacy STM (e.g. vitamins).
Watsons’ local STM retailer M.A.G.
STM promotion strategies
- Creating STM discounters and price dumping.
- Extending the supermarket brand and extending its reputation to STMs.
- Displacement of competitors. the most complex strategy, which requires the greatest effort, but also brings significant profit. The essence is to replace in the consumer’s mind the goods of a well-known brand and to tempt him to choose STM. To do this, you need to create a mystified image of the product. This can be achieved with the help of design.
If you want to create an umbrella STM or redesign an existing Private Label, contact KOLORO. We will develop a brand identity that will increase sales and expand the category range.
Design of sandwich packages for 7-Eleven chain sandwiches
STM design: the situation in Ukraine and in the world
Discounters are characterized by the simplest possible packaging. Often in its design, chains use eye-catching colors to attract more attention to the product. This technique achieves the goal, but repels a part of potential consumers who are ready to buy STM, but the eye-catching design makes them apprehensive. Subconsciously, they associate screaming contrasting colors and large logos with a low-quality product inside.
The fact that many manufacturers choose thrash design does not mean that it is the only right solution. For example, the STM of the Novus chain, Promo Marka, is made in the style of minimalism. It belongs to the low-price category of STM. However, brand managers decided to emphasize not on cheap design, but on honest presentation of the product. They maximize the possibilities of viewing windows, demonstrating products (cereals, cookies) and neat product illustrations (canned food, dairy products). Even a low price is no reason to give up the emotional message. Promo Marka has it. It is clean, and fresh – a feeling that is achieved through proper use of white color and subtle details like fonts or floral illustrations.
Promo Marka, Novus – laconic STM design
Among STM of the mid-price category, we would like to mention the design of some products of Premiya own brand, which belongs to Fozzy Group (Sylpo supermarkets, Le Silpo delicatessen markets, Fozzy wholesale hypermarkets, Fora convenience stores and Bumi Market chain). For example, juices (with the image of fruits and vegetables on the entire perimeter of the package), tea, processed cheese and children’s line “Premiya Riki Tiki”.
Part of the assortment of STM “Premiya”, Fozzy Group
However, there is a disadvantage. There are quite a lot of products under the Premiya brand. They were not launched at the same time, and the design, to all appearances, was done by more than one agency. Therefore, except for the logo, the products have nothing in common. Strategically, this is detrimental to the brand, as it blurs its image in the eyes of consumers. After all, one of the key positive qualities of STM is the ability to quickly find all the goods of one brand that the consumer needs. And this is helped by a unified style of packaging design.
Premium brands of retail chains are a relatively new and most promising category for STM. Packaging design is the main thing that can attract a consumer to such a product. Its task is to mesmerize a person. Packaging for the premium category of STM should not be associated with negativity. Its goal is to create the impression that the consumer has a full-fledged brand in front of him. Fozzy Group’s STM, Premiya Select coped with this task.
Part of the Premiya Select range, Fozzy Group
STM development: 2 main rules
- Think in advance that the product line will expand. It is necessary to choose a corporate identity that leaves room for maneuver and can be adapted to new product categories. It should be understood that STM is a giant umbrella under which 200 to 400 SKUs can be united (sometimes the number reaches up to 700 units). Therefore, in addition to the logo, the design should be based on a common denominator.
- Clearly understand the price segment in which the STM will be presented and base your decisions on it. Premium STM categories are becoming increasingly popular. When developing a design for them, it is important to create a vivid emotional image of the brand, which will tell about the quality of the product.
Decided on the answers to your questions and ready to start the project? Contact our managers right now, they will answer all your questions and send you a rough estimate.
Identity for the Private Label of Pressbyrån supermarket
STM design that hits the mark: a checklist
1. Product comes first
The most important characteristics for STM are price and product quality. Therefore, when creating the design of Private Label packaging, it is important to emphasize the product itself. A concise description, transparent inserts or viewing windows (if the technical characteristics of the package allow for this technology), and a composition that is indicated in large letters on the front of the package will help. The logo goes to the background, it can be quite small and inconspicuous. This will be a plus for the product.
An example is the STM design of retailer EasyFood. A white background, a bright pattern that symbolically demonstrates the content of cans and packs, as well as a prominent indication of the category to which the product belongs – these are the 3 secrets of STM success.
EASYFOOD is the perfect example of a simple STM design that doesn’t repel
Another example is the STM of the Garant chain. Here the emphasis is on text and recognizable fonts. There are two advantages to this approach. Firstly, the whole line looks very organic, and consumers can easily find the brand’s products in different departments of the supermarket. Secondly, the large letters themselves tell about the contents of the packs, which speeds up the shopping process. People will be grateful for the time saved. Also, subconsciously, such a font is associated with openness and causes more trust in the product.
STM of the Garant network – the category name is in the foreground, the logo corresponds to the size of the info label “eco”.
2. A storm of emotions
Many consumers in Ukraine and Russia associate STM with cheapness and poor quality of goods. However, it is very easy to deal with this negativity by using competent design. The following two examples are excellent proof of this.
The first is a cookie packaging design for the Fortnum & Mason chain. The cardboard cylindrical chest with elaborate illustrations defies the competition. The language will not turn to call this STM “cheap” or low-quality.
STM cookie chainFortnum & Mason cookie design
The second is the umbrella STM ICA Gott liv. It consists of bright geometric patterns that emphasize the essence of each product. The color scheme is expressively different from the majority of products. This makes the STM stand out and recognizable. And brightness sets a positive mood.
STM design ICA Gott liv
3. Not what it seems
We have already written above that the most profitable for a retailer is the creation of elite products under STM. To do this, it is necessary to develop an STM design that does not give away the brand of own production in the product. Examples could be the STM of retailer Tesco or the Salde Plata seafood range of Aldi Supermarkets.
Tesco finest chocolate, snack and cookie design
Sal De Plata STM packaging design
STM design: the bottom line
Having learned about the statistics of STM consumption in Ukraine and the world, having seen the examples of Private Label design, we can say that this sphere has great prospects for development. We hope that Ukrainian retailers will follow the example of their European colleagues and continue to expand their STM lines with quality products with attractive design. And KOLORO marketers and designers are always ready to help!
You can order STM development at KOLORO branding agency. We will create for you a brand in a unified corporate style, which will become a leader among consumers.
