By Gunter Soydanbay.
Did you know that private label brands (PL) have been around for almost a decade? Back in 1928, the Swiss introduced the PL concept and since then it has been spreading like wildfire. Actually, we should point out that PL is not only spreading but also “evolving.” We are witnessing a quiet renaissance, which deserves to be analyzed. This is the first installment of a series of essays on private label branding.
Migros eliminated the middleman, inventing the private label concept.
Let’s start by reviewing PL’s origins: It was invented during tough times, sometime between the WW1 and the WW2. Also, those were the years leading up to the Great Depression. So, it’s not a coincidence that the PL concept is deeply rooted in low cost. For decades, people were conditioned to think that PL was equal to cheapness, both in terms of value and quality. This tactic worked like a charm for many decades. The combination of no frills approach and intentional lack of beauty served its purpose. But over time, masses got richer and had more disposable income. The proliferation of choice became a major hurdle for PLs. So, the no frills approach had to evolve…
The famous “No Name” brand is still very popular
The next step in PL’s journey was the “me-too evolution.” In a crowded market, the easiest way to be recognized was to look similar to the leading brand. In addition to instant recognition, resembling to the market leader had unconscious effects: Consumers would automatically associate some of the positive attributes of the leading brand to the PL. As long as the PL looked like a poor cousin of the market leader, it was OK. That approach too, worked like a charm for a couple of decades. However, as time passed by, retailers realized that their PL brands had a halo effect on the retailer’s brand: The characterless, me-too brands started to negatively impact the overall image of the retailer’s brand. It was time for PL to evolve again…
Me-too store brands were the next evolution in private label branding
Third generation PL brands look distinct. Really distinct… They are more than wannabe store brands. PLs are building their own personalities. Well-designed PL brands are occupying the shelves, giving CPGs a good run for their money. And they are relentless, infiltrating in every category. No longer they are offering just staples. Any product you can think of, you name it, PL has it. Retailers started to be proud of their store brands so much that they want those to be one of their key differentiators… And, “that” turbocharges the next and last evolution of PLs.
Private label brands now have their own look and feel. They look self-confident.
Self-confidence is an interesting thing: When you don’t trust yourself, people instinctually take notice and don’t trust you. But, when you have self-confidence, same people start trusting you. The more self-confidence you have, the more they trust you, the more they trust you, the more self-confidence you gain. It is a positive feedback loop. Now that PLs are building their own unique personality, people is taking notice and asking for more. That’s why today’s most successful PLs are becoming “destination brands.” People sometime switch supermarkets to buy a particular store brand. The future of PL looks really bright.
Canadian grocery store Loblaws’ clothing line Joe Fresh became an international success story. A true destination brand
On our next article, we will analyze the unconscious of PLs. Why do we buy PL? Is low cost the main motivator? What’s going on in our mind while picking a PL? Stay tuned.
