The Future of Private Labels: Towards a Smart Private Label Strategy

Modern day store brands (SB) or private labels (PL), now also popularly called private brands, are brands generally owned and marketed by retailers. They have been active on the market for about 70 years. Over this time span, these brands have evolved from generic, cheap, low-quality economy or budget private labels to lower-priced-than-national brand but acceptable-quality value or standard private labels. Over time, retailers extended the value proposition to the consumer segment seeking higher quality by offering premium private labels. This strategy, called the tiered-private label, comprises offering economy PL to the price-sensitive but not quality sensitive consumers, standard PL to mainstream consumers seeking acceptable quality at lower prices, and premium PL to the quality-sensitive segment seeking value. Over the last 40 years (1980–2020), these versions of private labels have witnessed substantial growth around the world, though the growth is said to be tapering in recent times.