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Marketing Matters: Private Label Grows Up

By: Donna C. Barson
Posted: February 11, 2008, from the February 2008 issue of GCI Magazine.
Back to the February issue.

It used to be that, for the consumer, buying a private label brand meant a deal with the economic devil. Private label purchases cost less and saved the consumer money, but a distinct drop-off in quality was often the trade-off from a national label alternative.

But, as Bob Dylan sang, the times they are a-changin’. Today, in every category, retail outlets are aggressively stocking private label products next to national brands, and often using private labels to attract customers into their store. From packaging down to performance, private labels are giving the national brands a run for their money.

What does that mean to the savvy marketer? Simply this: private labels have emerged as a definite threat to sales, shelf positioning and even the decision of what products are carried. Foolish personal care marketers ignore these warning signals at their own peril—and the likely detriment to their products.

Private label development has been the most significant at grocery stores, with a nearly 20% incursion rate. Supercenters are next, with 16%. Both are formidable personal care retail outlets. Even non-traditional personal care markets such as apparel chains—including New York & Co. and Ann Taylor—and accessory chains such as Coach offered personal care products in 2007.