Benefits of a Private Label
Private label products are making a comeback and research shows they’re not going anywhere, anytime soon.
Commonly referred to as “generic”, private label products are anything but. Known for their attractive price point, private label brands are associated with a particular store chain and are a common way to generate hefty financial returns for business owners. Private label products became considerably more appealing to consumers during the COVID-19 pandemic as consumer packaged goods disappeared and shoppers, not finding their preferred brands, instead bought private label goods. Availability, coupled with consumers’ hunt for greater affordability, sparked a boom in the private label sector and studies show that consumers aren’t always making the switch back to name brand. A recent article by Nielsen stated, “In the past few years, private label items have slowly been moving away from their traditional role as the budget-friendly, knock-off alternative to branded items. Instead, when consumers purchase private label items nowadays, they receive reasonably priced items that get the job done. Consumers are no longer considering private labels to be less than their counterparts; rather, the quality has notably improved.” According to a NACS Private Label Report, shoppers caused private-label sales to jump 13% since March 1, 2020, compared with both January and February 2020.
So, why bring private label into your store?
Consider this. A big retail chain has 3,000 stores across the U.S. They decide to obtain a private label brand because…
They have instant distribution.
Retailers have a unique advantage of a wealth of consumer insights. They see trends across brands, and therefore are privy to customer patterns and preferences that vary across different regions. A retailer that acquires a private label brand can control exactly where their product goes.
They can control the marketing.
Distinguishing yourself from the competition is critical for retail success and with a private label, you call the shots to build an image of your brand. Private label products allow you to create a distinctive and unique identity that makes your brand recognizable and one of a kind.
They can control the price.
When you eliminate the cost of the middleman, i.e. wholesalers who sell you nationally-recognized brands, private labels allow you to sell your products at a more affordable price, thus increasing your profits. As many private labels attract consumers because of perceived value, being able to set and regulate pricing gives retailers a better systemic process for refining their product assortments.
They’re in charge.
The end-to-end private label business involves few parties and has numerous advantages for retailers. With private label, you’re in control. Your brand, your marketing strategy, your success. With a private label brand, you can market, promote and sell to your standards. Implementing a private label strategy allows you to build and grow your brand the way you want and offer your customers a value proposition unlike any other.
