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Benefits of Private Labeling

Posted by JC Manufacturing & Marketing on 6/28/2021 to Marketing B2B

Why Smart retailers are prioritizing private label

Whether it's to protect market share from Home depot and Lowes or meet demands for uniqueness, more DIY AND CONTRACTOR SALES companies are building out proprietary lines.

 "Private label is here to stay. It's people that figure it out first and best, on the merchant side and on the supply chain side, those are the ones that are going to be relevant years from now. If you're just going to market a line with the same stuff that everybody else has, you're not adding value to anyone's life and customers have to want the merchandise. It can't be something you force feed."

Smart Retailers increasingly use their own brands to stand out from the competition

Any conversation around private label quickly brings up an image of 1970s-era white labels with black type and the term “generic.” But that idea is as outdated as bell bottoms and feathered hair. Gone, too, is the idea that consumers turn to private labels when dollars are tight.

The current economic boom has done nothing to blunt the rise of private labels or private brands. Instead, they are enjoying something of a resurgence — and proving to be a powerful brand differentiator.

“At this point in time, private brands have never been more critical to retailers’ strategies,” says Carol Spieckerman, a retail strategist and trainer. “Digital has driven the ubiquity of national brands, so price comparisons are a click away. Private brands are one of the only ways to differentiate, drive destination shopping and blur price comparisons.”

A well-executed private brand strategy can drive growth — and for good reason. Spieckerman prefers the term “private brand” since retailer brands have moved well beyond simply changing out the label. Retailers now actively market these brands and see their private brand portfolios as corporate assets.

A well-executed private brand strategy can drive growth — and for good reason. “With private label, retailers can control every aspect of the brand, and that’s part of why they are so attracted to them,” says Mitch Duckler, managing partner of brand strategy consultancy FullSurge. “They can control not only the positioning, but the marketing and activation as well.”

Durham notes that consumers trust the retailer, and are more likely to then trust the retailer’s brand. “There is no doubt that transparency is an overarching theme across all of packaged goods. Whether it is sustainability, quality or price, private brands offer retailers an opportunity to dull one of their biggest challenges: price comparisons.

“The bigger question is, ‘Do national brands matter?’” Durham says. “That whole conversation has been dominated by this sort of underlying belief that only manufacturers could own brands. What we know is that consumers do not know and do not care who owns brands.”

Whether it is sustainability, quality or price, private brands offer retailers an opportunity to dull one of their biggest challenges: price comparisons. “The transparency that mobile and the internet have brought to retail has motivated most retailers to minimize comparability to their competitors,” says Keith Anderson, senior vice president of strategy for Profitero, which monitors 450 million products across 5,000 retail websites.

“Of course they are going to carry national brands and the same items that their competitors carry, but they want to increase the assortment that is not directly comparable. That drives retailer demand of private labels.” He notes that premium brands offer opportunity for retailers as well. “Ten or 12 years ago, most people in the industry associated private label with opening price point or national, value-oriented generics.”

Private brands also offer the opportunity to build relationships with customers in unprecedented ways. “The best retailers are looking at their customers and saying, ‘How can we engage them?’ With the old private label, that was never asked,” Durham says. “It was, ‘How do we make Cheerios and sell it for 30 percent less?’ Nobody loves you for doing it. They expect you to have it, but don’t love you for that. Now the question is, ‘How do we engage her so that she wants to come back?’”

Home improvement is in itself a large category for store brands — though they may not be as obvious. Harbor Breeze has significant market share in the ceiling fan category — but the Lowe’s name doesn’t appear in the private label. The Home Depot also has its own brands; most major home improvement chains have exclusive brands, which they may not own but essentially control.

Anderson does not foresee a day when private labels grow bigger than the brands themselves… YET… but that day is coming as Big Brands ally themselves with Big Box Stores and cut out the vast segment of the Independent retailer who does not stand a chance when it comes to price on the name Brands.

There is going to be enough competition from emerging brands and direct-to-consumer brands. It may be that they’re the ones that eclipse the retailers, as opposed to the retailers incubating these brands.”

Private-label products have come a long way the past few years. What used to be associated as simply generic and low-priced, these items are now sought out by consumers daily. In fact, 61% of consumers are purchasing more private-label brands now than they were two years ago, according to retail service provider Daymon’s new Private Brand Intelligence Report.

Since the start of 2017, private-brand sales have increased 4%, which is eight times the amount of national brand sales, the report says. Moreover, these brands have contributed about $50 billion in margin to retailers—a $2 billion increase since 2016. And private-label products are being purchased regularly, as 81% of consumers said they do so on every or almost every shopping trip.

“Private brands have entered a renaissance period that has allowed them to become more differentiated than ever before,” said Jim Holbrook, CEO of Daymon. “We are seeing that retailers with distinctive, one-of-a-kind private brands will survive and thrive, while those with national-brand equivalents will struggle as competitive pressures mount.”

Here are reasons private-label brands are thriving in today’s market…

1. Providing better value

Private labels offer high-quality items at a reduced price, and nearly three-fourths (74%) of consumers said that private brands are now a better value for their money, the Daymon report says. Additionally, 61% of respondents said they want to see more deals customized to their shopping habits. Holbrook said top retailers are using private-label brands to do so, with some now offering proprietary brands in sectors such as Home Improvement, clothing and beverages.“With private brands, there’s the notion that you’re getting a deal or at least not paying a nonsensical premium for the name on the packaging, and that’s why these brands are growing so much,” he said.

2. Driving loyalty

The more unique a retailer’s private-brand lineup is, the more loyal its shoppers are, the report said. In fact, 53% of consumers said they shop at a store specifically for its private brand. Increased loyalty aligns with trustworthiness, too, and 85% of consumers said they trust private-label brands just as much as national brands.

3. Emphasizing customization and experience

Private-label retailers are dabbling with create-your-own products and services, and for good reason. About 77% of consumers have chosen, recommended or paid more for a brand that provides a personalized service or experience, the report said.

Moreover, 59% of consumers want an engaging shopping experience, which includes interacting with and providing feedback to retailers. This is especially true for younger consumers, as 78% of millennials said experiences are more important than products. The report suggests consumers are likely to make impulse purchases and buy gifts, specialty products and more if kept engaged.

So to wrap it up.. Smart Retail's Secret Weapon Is the “Private Label”

It's not just about price, but about building beloved brands and loyalty.

The Advantages of Private Label Branding

High Margins

Private label brands typically have significantly higher profit margins than resale products. This is because the cost basis for making your own products is usually much lower. This is especially true if you do a good job developing and marketing products of high quality that demand good prices in the marketplace. Supermarkets routinely use private labels to fetch strong profit margins that offset minimal gains on top industry brands with high costs of acquisition.


Private label branding is one way to separate yourself from competitors. Your name on the products separate you from the rest of the crowd. One of the greatest attributes of private labels is that you inherently have an exclusive right to sell the products. If you market the brand well and create demand for it, you benefit as your customers' only source. This contributes to your ability to charge premium prices, and you attract more customers who buy additional items when in your stores. Fashion retailer Buckle, for instance, has its branded "BKE" jeans but also sells many other clothing brands.


Building a loyal customer base is central to long-term business success. Private label branding is one way to build customer loyalty from people who like your products. High quality brands with limited accessibility to a large customer base help you gain loyalty from core customers. Your customers feel attached to your brand and like the feeling that they are among the select few who own it.

Resales from imprinting Websites and Location Phone numbers

Now when you can imprint your company LOGO and name as a Private Brand... along with your company branch address and phone number and add your website as well... what you have done is to combine both "marketing" and "retail profit" into one product. That is a "DOUBLE WHAMMY!"

So come on Smart Retailers get with the program… We offer you the opportunity to Private label and sell… “CONTRACTOR Problem Solver Products” from our line of Super Seller products! Check us out!