The Lowdown on Private Label Brand Strategy

Long gone are the days of store brand boxes sitting forgotten, collecting dust bunnies on the bottom shelves. Today, private labels are getting a lot of attention—some flying easily under the radar as national brands. How did this happen? As consumer conceptions of value change rapidly, retailers have upped their game to go head-to-head against national brands. Understanding these strategies is important to jumping your hurdles in the race with private label.

Private Label Brand Strategy Infographic

Traditional approach

  • Retailers setting value in price like Walmart’s Great Value

Overbrand approach

  • Retailers using their brand as an overbrand like Giant’s Nature’s Promise

Tiered/retailer identity approach

  • Retailers creating one or more private labels that may or may not be associated with the store brand like The Fresh Grocers’ Fresh Market or Target’s Market Pantry and Simply Balanced

The strategy with the most possibilities—and therefore the most threat—is the tiered approach. Store brands have realized that tiered strategies can please customers that perceive value through competitive cost while having the freedom to branch out to satisfy other perceptions of value. This “hybrid” approach has been the key for many retailers to get a leg up on leading name brands.

Shoppers’ appreciation for a good deal hasn’t vanished; they’ve just stopped settling. With information at their fingertips, they can compare product prices and reviews from friends, family and fellow shoppers with a few screen taps. The advantage of the tiered approach is that retailers can position their brands differently based on category trends with less risk than national brands. Here, you see an example of Target’s tiered private label brands. The organic option is sold in septic carton packaging, standing out among the other offerings.

Target Private Label Brands
Simply Balanced organic cartons are 2 oz. less than Market Pantry cans and sold for double the price.

Consumers are more sensitive to the appearance of food than ever. Social media platforms like Instagram and Pinterest are flooded with cutesy bento box lunches and refrigerators shelves that look like they’ve been stocked by interior designers. People choose food brands with an aesthetic they identify with. With beautifully seamless packaging design and branding, these faux “name brands” are barely distinguishable from trusted national brands.

The retail shelf is akin to a catwalk—your audience can turn their attention away from you and onto the next model at any time. Your packaging needs to be bold enough to steal the show, especially when new, more affordable “designers” are in the running. The success of private label has made it apparent that a big, recognizable logo is not enough. When consumers are so close to purchase, this new level of branding and positioning from private label makes it easy for even brand loyal consumers to give it a go.

So, how can you keep private label from stealing your lunch money? While retailers have infiltrated the packaging game, they must divide resources and messaging across many categories. Name brands that specialize in specific categories should invest in adding a perceptional value that private label can’t quite touch. Think about what your brand stands for—does it have a purpose? Does it have a point of view that connects to today’s shopper? How does your USP translate through design? How can you deliver your brand promise beyond your product? Use social media to react to current events that are relevant to your category and engage with consumers about your product. Stay involved, and don’t be afraid to explore new ways to make the most of your environment. It could be saving you more lunch money than you think!