Private label: Shifts and Strategies
Use your brand’s unique identity and a one-of-a-kind insight into the niche markets, and increase brand value and consumer engagement by creating a private label line.
A shift in the perception of value and branding
The global pandemic stimulated the private label market, as economic pressure, logistic issues, and panic hoarding left consumers to change their behaviors.
Sales in private label goods will continue to thrive post-pandemic as consumers look to save money without sacrificing quality. Millennials are less loyal to brands and have a more flexible approach to purchasing based on value rather than because of the brand name.
Earlier, private label products could deliver on value but fell short to be perceived as innovative and enjoyable. To continue the success that the pandemic has given private labels, the parent retailers must create product lines that compete on quality, innovation, and pricing.
Every brand has to align its aspirations with the value that its product can deliver with its possibility to create leverage in the desired customer segment. To tap into new markets, the brand has to develop products that are both innovative and can standalone.
Differentiation and innovation
Parent brands are now facing the issue of ensuring that their private labels are sustainable by maximizing their appeal in as many ways as possible. Millennials and Gen Z are the core consumers of private label products, primarily those with a higher income. They have become more willing to pay a higher price for products that align with their values and experiment with a new brand. This is helping widen the scope of private labels.
With this in mind, retailers and parent brands should promote private labels based on their quality, highlighting materials, and benefits, which should position them on the market on the same level -if not higher- than national brands.
Key action points
We have gathered the four most important action points for creating a private label:
- Parent brands can tailor products and strategies through market analysis of national brands, comparing categories, online views, and social media impressions to create specialized private-label versions.
- Parent brands must create a real point of difference. Innovation and elevated design will lead to an increased number of loyal consumers and become a pathway to engage with new consumers.
- Be authentic. Gen Zs shall be viewed as hunters of authenticity. Therefore, parent retailers must retain a level of honesty and transparency around their private label product launches.
- Retailers can leverage their market position and access unique data to launch niche private labels that tap into new segmented markets and capitalize on emerging trends.