Private label trends

Increasing competition in the retail world is driving retailers to invest more in their own brands, hoping to increase profit margins and strengthen customer loyalty. Retailers like Walmart, Target and CVS no longer just sell other brands’ products. They are investing more heavily in private labels, removing brands from their shelves.

Retailers and e-commerce platforms can use data gathered from selling other brands over the years to design their own brands. Their location can also help track shopper behavior online and in-store.

Amazon and other websites can track the characteristics of shoppers, who likes promotions, bids, who is online often, who likes to be vegetarian…; based on their current shopping behavior, then design products to target the target segments they find most profitable.

Retailers are launching private labels to boost profits and compete with e-commerce giant Amazon. Notable movements over the years include:

– Pectsons’ private label Organics has launched 1,400 new private label products, double that of 2017.

– Kroger’s Simple Truth brand reached $2 billion in sales, and Kroger partnered with Alibaba to sell its own label in China.

– Target has launched new private labels including Made by Design (home furniture brand) and Smartly (home care brand).

– Walmart launched new private labels this year, including a wine brand. They also bought the Eloquii apparel brand, then bought Bonobos, Moosejaw and Modcloth.

E-commerce platforms are jumping on the private label trend. Amazon currently offers more than 120 private labels.

Smaller marketplaces like Boxed and Thrive Market have also launched private labels. These e-commerce retailers are well-positioned to spot market gaps: online marketplaces can track products shoppers look for but don’t find, analyzing narrow categories. compete, find low-priced products. They also gain a better understanding of how consumers use products to optimize marketing messages. Private labels represent a sales driver and shopper’s loyalty to retailers, but an increased threat to traditional consumer packaged goods (CPG) brands.

According to CB Insights