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Private Label Groomed to Take on Personal Care Brands

By: Mark Whalley
Posted: May 4, 2011, from the May 2011 issue of GCI Magazine.

page 2 of 5

The growth in private label across sectors is one of the most pervasive trends influencing consumer packaged goods; trust in private labels is stronger and brand choice is greater than ever.

Historically, private labels were simply positioned as lower-cost alternatives to name brands. Now, in many instances, private label quality has reached parity with national brands, and private labels are delivering above consumer expectations.

Product ranges have also dramatically improved. Private labels can no longer be lumped together as cheap substitutes. They range from basic, no-frills generics to premium, highly specialized “destination brands,” such as Boots No.7 in the U.K. Many retailers also now offer a wide range of private label options covering the entire quality spectrum, giving consumers more choices within the private label category itself.

Even more interestingly, the notion that private labels simply follow in the footsteps of national brands is becoming outdated, too. In some cases, retailers are even leading the way in bringing innovation to consumers. Walmart, for example, launched Fat Foam, a no-drip hair coloring product based on Japanese technology, in September 2010, beating national brands to the market by half a year.

Michael Smith, senior buyer for hair care and color at Walmart, commented that the retailer “wanted to bring [Fat Foam] forward and use our scale and our marketing muscle to bring it early to the U.S.” Doing so signifies a real commitment to using private labels preemptively rather than solely as a means of competing using similar products and formulations at a lower cost.

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