Private Label Buyer
Doug's Drift

Private Label & National Brands - Can't We All Just Get Along?

April 1, 2014

Retail has seen significant change in the emphasis placed by retailers and consumers on private label. Valuable shelf space is in flux as retailers experiment with how far they can penetrate into categories formerly owned by national brands, while still providing the key national brands their shoppers seek. This is a game of balance, with the desired outcome of getting more total products into the (physical or virtual) shopping cart.

This is the age of “Big Data,” and retailers can track which specific store brands and national brands shoppers regularly put into their carts. Subsequent analysis helps decision-makers astutely stock departments. Such data also illuminates opportunities for cross-merchandising and future product/line development.

Competition has intensified. Some private label lines resemble—and surpass—their nationally branded counterparts in overall branding, formulation, packaging, marketing and quality, while select value-tier lines capably meet shopper needs, eliminating the need for a national brand in that space. Meanwhile, retail channels continue to shift, and omnichannel throws 3-D digital depth into the scene, providing our contextual field of play.

But every step along the way, private label and national brands have much to learn from each other. The interplay between these two industry segments will not subside, continually revealing the future of retail.

This ongoing competition between private label and national brands—and the knowledge each can glean from the other—is precisely the subject of a panel discussion PLBuyer is organizing with FMI for its Private Brands Summit in June. Stay tuned for complete details on this exciting event.

I originally conceived of the idea for the panel back in late 2013, and the timeliness of the topic was quickly confirmed when IRI released its December 2013 Times & Trends report on “Private Label & National Brands: Paving the Path to Growth Together,” which notes that while growth has slowed since the 2007–2009 recession boom, “private label growth (average 4.1 percent annually) continues to outpace industry average (2.8 percent annually). But, a granular analysis of CPG trends confirms what IRI posited one year ago—private label and national brands are each showing areas of strength, and industry dynamics are evolving.” The report goes on to suggest that “private label and national brand marketers can enjoy mutual growth by not simply coexisting, but rather evolving and working together to serve the full spectrum of consumer needs and wants.”

 Such cooperation could easily serve as an exponential growth catalyst for the retailers and suppliers who can successfully navigate these largely uncharted waters.