They are no longer just used to attract value-conscious customers or protect category margins. Instead, private labels are being used to differentiate a retailer’s product range and overall positioning. In fact, due to a stronger focus on quality and marketing efforts, private labels have lost their notoriety for being “just cheap.” In a recent study, more than 80 percent of all respondents said that private labels are as good as or even better than branded products. That is a “big plus” for private branding. Retail consolidation has given private brand confidence and will continue to do so in the future. In concentrated markets, private labels have comparatively high shares, but show limited overall growth. If a certain saturation level is reached, private labels can only achieve further growth through innovation and a different approach. As a result, retailers in mature markets increasingly take into consideration the latest private label trends, such as covering entire price ranges, addressing customer-relevant topics (such as fragrance and cosmetics), creating stronger branding, leveraging technology to engage with customers, and vertically integrating to extend influence throughout the entire value chain.
Basic rules do exist for creating a private brand, but they are not “rocket science” and by my opinion, anyone who has an innovative idea or product can make a brand successful and prosperous through innovative approach and most importantly strong will.
Writer: Jan Vreca., creative designer www.jvd.si