Private-label brands in the spotlight

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Private-label brands in the spotlight

More and more retailers are turning to private-label or own-brand goods, seeing here a competitive advantage: cost reduction, targeting specific customer trends and consequently, increase in consumer loyalty.

As it turns out, the customers themselves often prefer the category of own-brand products:

  • Private-label product sales are now three times higher than branded products, according to a research
  • One out of every four products sold in the United States is a private label or a store brand, according to a survey carried out by the Private Label Manufacturers Association.

Amazon sets a good example in this matter, increasing their own brand stock. The e-commerce giant stocks roughly 7,000 private label products across a range of sectors. The company rolls out the private labels under Solimo and Happy Belly logos. Big Data is used to determine big demand.

Retailers can do even more to push this agenda:

  • According to Gartner L2 report, less than 40% of retailers showcase the private-label goods on their homepage, category and product pages. These products are often shown side-by-side in the broad category pages like ‘fresh vegetables’. Consequently, the customers might have dificulties in finding them.
  • Private-label brands may think about embarking on new opportunities: on-demand or subscription services, smart home technology, next-generation vending machines, in-office marketplaces and development of their own loyalty schemes.
  • Three private label brands within each retailer might strike a happy medium: a low-cost brand, a premium, high quality, higher priced brand and a middle-ground, organic or specialty private label – ethnic, organic, non-GMO.

The days when the store was just the place one went to buy big brands aren’t over. Nevertheless, the store’s brands are becoming part of the mix.

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