Innovative Private Label Sets Pace for Evolving Retail Industry
As retail continues to change, private brands are leading the way for the rest of the industry, according to the latest edition of Daymon’s “Private Brand Intelligence Report,” which offers an inside look at the emerging trends and strategies in the private-brand sector.
In 2018, there was a 4 percent rise in private-brand sales, almost six times the growth of national brands, the report found, noting that the growth came from categories across the retail spectrum, among them beauty and personal care, pet, household, and food.
Private brands have also become a key source of differentiation, store choice and consumer preference. In Daymon’s report, 98 percent of national-brand assortment was found to be the same across retailers, and 53 percent of shoppers said that they shop at a store specifically for its private brands, with 81 percent asserting that they purchase private-brand products during every shopping trip.
“Consumers are empowering retailers to be pioneers – to offer new and unique private-brand products that align with their constantly evolving preferences and needs,” said Michael Taylor, president of Stamford, Conn.-based Daymon. “With shoppers becoming ever more channel agnostic, retailers must pivot from category-led updates and focus on consumer-centric platform innovation. This will help them raise the profile of their private-brand program and differentiate from their competition.”
Innovation is a major factor in a successful private-brand program, the company’s report noted. Last year, best-in-class retailers introduced more than three times as many new private-brand products as the industry average, a pivotal driver of their private-brand growth, which was nearly five times that of the industry average.
The future of private brand innovation lies in three key areas, according to Daymon:
- Plant-based Products: Daymon estimates that the influence of this trend is rising rapidly, going from a handful of categories in 2014 to 90-plus categories in 2018, with emerging plant-centric options representing more than $13 billion in cumulative sales last year.
- Redefined Functionality: Science, specialization and simplicity are redefining functionality, with 49 percent of consumers saying that options tailored to their specific lifestyles are very important to their brand choice.
- Engaging the Senses: As 59 percent of consumers seek engagement when they shop, and six in 10 want experiences that stimulate the senses, private brands should focus on sensory levers that enable dynamic interaction with customers.
“Analyzing and understanding consumer behavior is essential as retailers aim to build an unbeatable and continuously differentiating private-brand program,” added Taylor. “The Daymon ‘Private Brand Intelligence Report’ offers detailed explanations of these emerging trends and the factors driving them, as well as strategic suggestions for how retailers can embrace bold innovation in their private-brand programs, making it a crucial source of market intelligence.”
The comprehensive report features insights and thought leadership from Daymon’s team of industry experts in category, fresh, culinary and wellness, who employed proprietary analyses, consumer surveys, market research and global intelligence to provide key action steps for retailers.