Tuesday, March 20, 2007

Private Label Brands On The Rise

According to the Private Label Manufacturers Association private label brands control nearly 21% of the market (units). Additionally, the goal of many retailers is to raise that to 25-30% and possible more.

Retailers are attempting to differentiate themselves from their competitors, just as brands compete, by limiting the overlap of SKUS on shelf. By gaining exclusive rights to products and brands, in addition to the growing number of private labels on shelf, retailers are able to give the consumer a unique choice of product offering. Granted, exclusive deals draw customers to the stores based on the brand recognition, but additionally, the unique products and offering helps position the retailer in the mind of the consumer. If Kohl's and Macy's carry the same product, the consumer would begin to have problems separating the two, but when Macy's starts carrying brands or products exclusively, these products help the customer see Macy's as different from Kohl's.

This trend towards private label may eventually lead to a growing separation between high price point and low price point products. Possible leading to two price points on shelf; a private label brand and a nationally recognized brand.

*Read more stats on private label brands.

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