The evolution of private label brands

Did you know private label brands (PL) have existed for almost a century? Back in 1928, it was the Swiss who introduced the concept. And since then, PL has been spreading like wildfire. However, PL is more than growing: it is “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.

Let’s start by reviewing the origins of PL: The concept was developed during an adamant time: between the First World War and the Second. Also, remember that those were the years 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 PL was equal to “cheapness:” regarding value and quality. This strategy worked like a charm for about five decades. The combination of the no-frills approach and “intentional” lack of aesthetic appeal served its purpose. That said, over time, the Western world got richer. The man on the street accumulated more disposable income. CPG (FMCG) companies started proliferating the market with new and better brands. That became a significant hurdle for PLs. Eventually, the no-frills approach had to evolve…

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 apparent 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 with the PL. As long as the PL looked like a “poor cousin” of the market leader, it was OK. That approach, too, was efficient… at least for a couple of decades. But, as years went by, retailers realized that their PLs had a negative halo effect on the leading brand of the retailer: The characterless, inferior-looking, me-too PLs started to impact the overall image of the retailer’s brand negatively. So, it was time for PL to evolve again…

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

Self-confidence is attractive: 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, some 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 PLs are building their unique personality, people are noticing. They like what they see and ask for more. That’s why today’s most successful PLs are becoming “destination brands.” Some customers even switch supermarkets to buy a particular store brand. That’s why the future of PL brands looks bright.

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