Storebrands: 2023 Private Label Outlook: Turning the Page
The past two years have seen the changing of the calendar from December to January met with hope and a level of cautious optimism as retailers and product suppliers alike sought to put the prior year’s hurdles behind them.
For those needing a reminder, the past three years have offered mountainous challenges ranging from a global health crisis to supply chain speed bumps and price hikes not seen in a generation or two. Hoping for a normal business climate? Most experts will say they are no longer sure what normal is.
What is clear is that 2023 will offer its own unique set of opportunities and challenges, and for the private label sector, the chance to build off a strong 2022 when inflation led consumers to seek out lower-cost, store-branded products to make ends meet. In the process, many shoppers also discovered their money saving choices revealed products that rival or exceed the quality offered by legacy national brands.
“We have again seen retail brands become more accepted by the consumer and we hope that continues, even if the economy shows some improvement this year,” said Peggy Davies, president of the Private Label Manufacturers Association (PLMA).
While price will continue to be a major factor in consumer spending habits and the choices they make when shopping in-store and online, industry experts also feel there is more retailers can do to highlight the benefits of store brand products that go beyond simply being less expensive than their national branded competitors.
“Retailers need to treat their private label brands as brands,” said Barbara Connors, vice president of Strategy and Acceleration with 84.51°, Kroger’s retail analytics firm. “They need to focus on marketing their brands to drive awareness and keep their products top of mind with shoppers. While consumers may buy the items because they are less expensive, it’s important for retailers to also highlight the quality of the items as well.”
Utilizing these long-standing tenets of marketing would also give retailers the chance to create an emotional connection with shoppers about a given retailer’s private label assortment. To do so, there’s a line of thinking among those who closely watch the private label industry that retailers need to continue evolving what motivates them when working to develop new products.
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