The evolution of private label brands

Did you know that private label brands (PL) have been around for almost a century? Back in 1928, it was the Swiss, who introduced the concept. And since then PL has been spreading like wildflowers. To be fair PL is more than spreading: it is also “evolving.” Today, we are witnessing a quiet renaissance, which deserves to be analyzed. This article is the first installment of a three-essay series on private label branding.

Migros eliminated the middleman, inventing the private label concept.
Migros eliminated the middleman, inventing the private label concept.

Let’s start by reviewing the origins of PL: The concept was developed during a particularly tough time: between the First World War and the Second. Also, keep in mind that those were the years were leading up to the Great Depression. So, it’s not a coincidence that the concept of PL is deeply rooted in low cost. Marketers conditioned people for decades to think that PL was equal to “cheapness:” regarding both value and quality. This strategy worked like a charm for about five decades. The combination of no-frills approach and “intentional” lack of aesthetic appeal served its purpose. That said, over time, Western world got richer. The man on the street accumulated more disposable income. CPG (FMCG) companies started to proliferate the market with new and better brands. That became a major hurdle for PL’s. Eventually, the no-frills approach had to evolve…

The famous "No Name" brand is still very popular
The famous “No Name” brand is still very popular

The next step in PL’s journey was the “me-too evolution.” In a crowded market, the easiest way to be recognized for a PL was to look similar to the leading brand. In addition to the obvious benefit of being recognized instantaneously, resembling the market leader had a critical unconscious effect: Customers automatically associated some of the positive attributes of the leading brand to the PL. As long as the PL looked like a “poor cousin” of the market leader, it was OK. That approach too was very effective… at least for a couple of decades. As years went by, retailers realized that their PL’s had a negative halo effect on the main brand of the retailer: The characterless, inferior-looking, me-too PL’s started to negatively impact the overall image of the retailer’s brand. So, it was time for PL to evolve again…

Me-too store brands were the next evolution in private label branding
Me-too store brands were the next evolution in private label branding

The third generation PL’s look distinct… very distinct. They are more than wannabe store brands. PL’s are building their bold personalities. Today, well-designed PL’s are giving CPG’s a good run for their money. And this new breed of PL is relentless! It is infiltrating in every category. No longer retailers are offering just customer staples. Any product you can think now has a PL version. Some retailers are so proud of their store brands that they want to leverage to those to be one of their key differentiators. And, that fact turbocharges the next and final evolution of PL’s.

Private label brands now have their own look and feel. They look self-confident.
Private label brands now have their own look and feel. They look self-confident.

You see, self-confidence is an interesting thing: When you don’t trust yourself, people instinctually take notice and don’t believe in you. On the other hand, when you have self-confidence, same people start having faith in you. The more assertive you are, the more they trust you, and the more they trust you, the more self-confident you become. It is a positive feedback loop. Now that PL’s are building their unique personality, people are taking notice. They like what they see and ask for more. That’s why today’s most successful PL’s are becoming “destination brands.” Some customers even switch supermarkets to buy a particular store brand. That’s why the future of PL brands looks really bright.

Canadian grocery store Loblaws' clothing line Joe Fresh became an international success story. A true destination brand
Canadian grocery store Loblaws’ clothing line Joe Fresh became an international success story. A true destination brand

On the next article, we will analyze the sublime nature of PL’s. Why do we buy PL? Is low cost the primary motivator? What’s going on in our mind while picking a PL? Stay tuned.

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