The intrinsic value of Private Brand remains its pricing structures vs. growing quality of product and widening assortment. The economic crisis has helped private brand sales and global uncertainty is driving customers back for savings. Add a national polarizing 2024 election year, and customers are hard wired to economize in some areas, then splurge occasionally in others. Pre- Covid, many Gen Z customers, were already looking for ‘Mix and Match’ across their Brand and Private Brand experience. That behavior continues, pricing will always be key and the clear winner in Private Brand.
How many times did customers have to navigate out of stock messages in-store and online during COVID 19. It’s still with us, still frustrating us, availability and choice remain a constant in the battle for retail supremacy. It’s likely the overall winner will get this right on-shelf and online by a thorough review of supply chain format and distribution. Identifying the right suppliers, sharing objectives and working together to deliver future demand; key in this age of ultimate convenience.
Item out of stock, would you like to replace it with something else?
Availability may be the number 1 trigger for customers to switch to Private Brand. Private brands are set up for speed and agility at volume. It has a great head start, with huge volume distribution in bigger retailers, and the opportunity to pivot into any product, pack, design, customer-need state.
Private Brand is traditionally based on appeal in-store at shelf. Customers buy based on packaging design, visual cues, competitiveness on pricing, assortment, differentiation in flavors or fragrance.
Once sold, repeat purchase relies solely on the quality of the product. It’s truly the word-of-mouth winner in homes. The quality of private brands in the US is now matching many National Brands. I know that US retailers are continuing their focus on improving quality to challenge National Brands.
The traditional story of “me too” or “match too” for Private Brand is disappearing for the first time. While customers expect an assortment and quality that matches National Brand, Private Brand trust is so high it can quickly innovate and compete for product basket must-haves. Many retailers have such a wide assortment of multi-category driven Private Brand that they can bring real innovation, insight, to delight their customers avoiding start-up pain and risk. Safe investment worth the effort, products that bring a customer to your store that only you supply, is the golden ticket for retail.
Large online success means customers are trying some Private Brands without the traditional in-store visual cues. They already believe in the products and the quality and will try new options. Retailers need to move fast to bring their Private Brand and product stories to life in a digital way.
Marketing investment in story-telling is not just for National Brands anymore, Private Brands must navigate harder in this digital space to win more market share.
Good value must be matched by even better values…
Customers are strongly considering their lifestyle values in the buying mix. For example, there is a 69% customer growth interest in Sustainability when buying a product , and 57% need to see evidence of Diversity and Inclusion commitment when making choices not just marketing .
Good value must be matched by even better values. Those values need to be authentic; customers increasingly call out any greenwashing in Sustainability or lack of authenticity in Diversity and Inclusion, responding brutally on-line and in real time.
The original concept behind Private Brand was accessibility. Uniquely inclusive; for everyone and anyone to be able to purchase, regardless of income.
Leading with Brand not product can help bridge this gap for retailers who possess strong and authentic overarching values, already key in these areas; no-one is more experienced at attracting a wide customer base to store than Private Brand retailers. Private Brand was always built for everyone, inclusively offering multiple price points.