New brands developed in-house to facilitate business diversification
The DIA brand has been the company´s hallmark and the lynchpin of its business model for almost three decades. The group’s umbrella brand has been able to accommodate different retail formats and trademarks created to facilitate international expansion, adapt to emerging shopping habits and diversify the business. DIA created the Clarel trademark in 2013 in order to penetrate the dedicated household, health and beauty products channel. In the wake of the acquisition of Schlecker’s Spanish and Portuguese sales network, DIA renamed the newly-acquired stores, launched a new private-label brand, Bonté, for the personal care range, and adopted and revamped the Baby Smile, Basic Cosmetics and AS labels.
The DIA Group encompasses different brands, trademarks, channels and business formats. It operates the DIA Market, DIA Maxi, DIA Fresh and Fresh by DIA formats in order to cater to customer needs on every shopping occasion. In 2013 the group added the Clarel chain in the wake of the acquisition of the Schlecker stores in Spain and Portugal.
In order to adapt to its local operating markets, the company has also developed several trademarks, such as Minipreço, Mini Fresh and Mais Preto in Portugal.
In 2013 the group launched a new private-label brand, Bonté, targeted at the personal care sector, and adopted Schlecker’s Baby Smile, Basic Cosmetic and AS brands, bolstering its multi-brand strategy.
4.3.1 DIA private label
DIA was the first Spanish retailer to create a private label brand. Since 1984 DIA shoppers have been able to choose between a representative sample of name brands and an ever-growing range of products sold under a private label synonymous with top quality at unbeatable prices.
The DIA brand is one of the company’s core growth drivers. In 2013, revenue from the sale of DIA-branded products exceeded €5bn, which represents 44% of total group revenue.
Since its creation, the company has been gradually adding to the DIA product range and extending its private label to its international operating markets. It currently offers its customers 7,600 DIA-branded SKUs which cater to customers´ varying preferences and sensitivities all over the world.
Revenue from the sale of DIA-branded products exceeded €5bn in 2013, 44% of the group total
In 2013, sales of DIA-branded products defended their share of the overall mix in all markets. In France, Spain and Portugal, sales of DIA products accounted for over half of sales by value, while in Argentina and Brazil they represented 39% and 37%, respectively (see accompanying chart). In China, where the DIA label is becoming the entrenched leading private-label brand, DIA-branded products commanded 7% of sales.
The cross-fertilisation of private-label brands from one market to another increased in 2013: increasingly the products marketed initially in one country are successfully introduced into other markets.
The success of the DIA brand is predicated on offering top quality at unbeatable prices. To this end, the company controls the performance and distribution of all the products carrying its brands by performing ongoing audits to certify its suppliers, thereby vouching for the safety standards of each of their factories.
In recent years, DIA has gone to lengths to improve its product labelling and added manufacturer names to its private-label product packaging.
As for its relationship with the suppliers themselves, DIA works continually to ensure mutually beneficial development and nurturing of these ties. It operates three websites exclusively for local suppliers through which it shares financial, commercial and logistics information. These three platforms provide key business management and development information; they save time and make both parties´ work more flexible and efficient.
4.3.2. Bonté, Baby Smile, Basic Cosmetics and AS
With a view to becoming the benchmark specialist in the health & beauty and home and personal care categories, DIA integrated Schlecker´s Spanish and Portuguese store base in February 2013 and rebranded the entire chain under the Clarel name in November 2013.
The new trademark, the vehicle being used to remodel the 1,129 stores acquired from the German retailer and launch the expansion process underway (with 60 new Clarel stores already opened), encompasses the cosmetics, home and personal care, pet and baby food and care product ranges.
Located in city centres in establishments with a floor area of between 160 and 260m2, the Clarel stores stock around 5,500 SKUs, between name and private label brands, and present a modern, user-friendly image that stands apart from that presented by the competition. The Clarel store image is also totally different from the rest of the DIA establishments’ store images. Framed by a logo that is modern and upbeat and dominated by black and white, the Clarel stores maintain and round out the former Schlecker categories, while restructuring and clarifying them in order to improve the shopper experience. The new store network is serviced by a staff of 3,300, most of whom have received dedicated training designed to enhance product familiarity and sales and customer service techniques.
Different brands for different categories
Following an exhaustive market study, research and product development process by the DIA teams and suppliers, the DIA group decided to develop a new brand for the product categories focused on personal care. And so Bonté was born, a private-label brand which covers the entire health and beauty product segment, while encompassing different ranges within this segment with unique packaging presentation for each.
Bonté sits on Clarel’s store shelves alongside Schlecker’s existing brands such as Baby Smile and Junior Smile (babycare range), Basic Cosmetics (make-up and cosmetics) and AS (pet food and care), although DIA took action in 2013 to update these brands’ images in order to make them more attractive to the buying public. Between them, the group sells over 750 SKUs under these brands.
All these specialist brands, together with the flagship DIA brand, populate the company’s new range of private labels, which encompasses over 8,300 products in all. The common denominator: they all offer top quality at unbeatable prices.
In order to maximise operating synergies between DIA and Clarel, both store networks sell common articles under just one trademark. And so shoppers will find Bonté products in DIA’s neighbourhood store formats, although these product ranges are deeper at Clarel stores.