At Home Depot, four triggers to a private-label program

As the world's largest home improvement retailer intends to leverage its private-label offerings across its businesses in the United States, Mexico and Canada, its top merchandising executive described the process for choosing a private-label brand.

There are four triggers that drive a private-label program, said Craig Menear, executive VP merchandising, during the company's recent Analyst and Investor Conference. They are:

• Lack of brand relevance. ("If a brand doesn't carry its weight with a customer, the category could very likely become private label," he said.);

• Lack of innovation;

• A financial issue that needs to be solved in the business; and

• A quality issue or opportunity. 

" If there is a quality problem, or a significant opportunity to improve the quality and also drive a stronger value proposition for the customer, we'll look to private label or exclusive product," he said. 

Proprietary and private-label brands combined represent about 14% of the company's business, Menear said. Any growth in these categories will ultimately be determined by customer wants and needs, he added.