Snapping up Private Label Goods

Snapping up Private Label Goods

Private labels, or store brands, are having a moment. Early in the COVID-19 crisis, many consumer packaged- goods (CPG) brands disappeared from store shelves due to panic buying and pantry loading. Some shoppers, not finding their preferred brands, instead bought private-label goods— and have continued to do so. The fact that private labels are frequently cheaper than national brands has helped, too, as financially strained consumers tighten their purse strings.

These two advantages—high availability and low price—have made private-label products considerably more appealing to consumers during the COVID-19 pandemic.

The consumer shift toward private labels benefits retailers as well, since private labels are typically more profitable for them. Furthermore, high-quality private labels can gain a devoted following and become a powerful driver of customer loyalty to the retailer. But will this private-label boom be a short-lived one? In the near term, are retailers at risk of disappointing firsttime buyers of private-label products with a poorly-thought-out offering? And once the COVID-19 crisis abates, will most consumers abandon store brands and go back to buying their preferred brands? 
We believe, if retailers don’t step up their private-label game, the answer to each of these questions will almost certainly be “yes.”