In recent years, there has been a huge surge in demand for private label brands. Consumers are increasingly seeking these brands out, with this turn of events making big waves in retail. Traditionally, private label products were viewed as budget-friendly but inferior. But now? They’re synonymous with quality, innovation, sustainability, and everything else that today’s consumer is prioritizing.
Why, exactly, are private label brands stealing the limelight? More importantly, what does the future hold for the world of retail and private labeling, and how can you ensure that your own private label brand continues to thrive? Read on as FLPL explores this further.
Private Label Brands and Premiumization
Private label brands first appeared as a means to give consumers a budget-friendly alternative to pricier, national brands. However, premiumization has been a growing trend in retail in recent years, and private label brands have managed to keep up. Brands are investing in higher quality ingredients, such as those in the FLPL ingredient catalog that our private label clients can choose from. Rather than using generic ingredient combinations, we’re all about encouraging our clients to push boundaries by incorporating rarer, cutting-edge compounds in their beauty products.
Other private label brands have been following similar lines of thought. As a result, private label brands have earned themselves a reputation for being more than capable of offering up high-end products that outperform the ‘regular’ brands.
This is helped by how private label brands are able to offer exclusivity in a way that larger brands struggle to do. Private label brands can offer a tailor-made experience to consumers. They can target a much smaller niche, often capturing the entire market.
Exclusivity and premiumization are two huge buzzwords in the retail sector at the moment, and private label brands can easily check both boxes.
Aligning With Evolving Consumer Values
Of course, not all consumers want exclusive premium products. Some seek affordability, while others are looking for a good balance between price and quality. Many consumers bring other values into their purchasing decisions too. Sustainability is one. Research shows that, even when considering inflation and the cost of living crisis, consumers are still happy to spend 9.7% more on products that have been sustainably sourced or produced.
However, again, this is the beauty of private labeling. Private label brands can easily cater to evolving consumer values. Sustainability is also a growing focus among private label manufacturers. At FLPL, not only can our clients make use of organic and sustainably harvested ingredients, but they also have their choice of eco-friendly packaging. How sustainable a product’s packaging is usually also provides some indication to how sustainable that brand is, making this a great way to get your entire brand in front of the eyes of key consumer groups.
Generational Appeal and Adapting to Trends
It has recently been noticed that private label brands seem to have a wide generational appeal. While they were previously focused on a narrow demographic, these brands are now garnering attention from growing segments, such as Millennials and Gen Z.
Why is this? It’s partly down to how private label brands are so efficient at adapting to trends. People don’t want to have to wait months to buy a trending product – they want access to that product as soon as possible. Larger brands tend to have a long supply chain, which makes this impossible. By the time they launch a new product, trends have moved on. However, private label brands usually enjoy a much shorter lead time. They’re able to continuously adapt their product line to keep it in line with generational demands and popular trends. In fact, many private label brands are known for being big trendsetters themselves!
Retailers Have Taken Note
With more and more consumers leaning toward private label brands, retailers are taking note. Many retailers now agree that private labeling is the future. In response to this, they’re launching their own private label brands that enable them to compete with the smaller labels out there.
While this may mean more competition for your own private label brand, retailers are also more open to stocking other private label products. They want to provide choice to shoppers, and private label products offer just that.
This is true across just about every industry. However, beauty and wellness private label brands seem to be experiencing more success than most. Retailers are clamoring to sell these private label products, and those brands are raking in the profits as a result.
As it so happens, the beauty and wellness sector is exactly what we specialize in at FLPL. All of our products fall into this category, making it easy for you to enter this lucrative market.
Ensuring That Your Private Label Brand Continues to Stand Out
While the future definitely looks bright for private label brands, there’s also no denying that this could now mean that competition will soon get fiercer for private label brands already in existence. How can you ensure that your private label brand continues to stand out? Here are a few tips:
Explore Emerging Micro-Niches
One of the best ways to make a name for your brand and build a credible reputation is to tap into an emerging micro-niche. This refers to a small and specialized segment of a larger market. For example, if face moisturizers are a niche, moisturizers for women over 40 who have dry skin would be a micro-niche.
Finding a micro-niche for your private label brand will immediately give you a competitive edge. Sure, your buyers will be ultra-targeted but this will also help you to build a connection with them. Strengthen this and it will continue on into the future, turning this into long-term loyalty. You’ll also find marketing much easier if you have a micro-niche to call your own.
Struggling to find a micro-niche for your private label brand? An experienced private label manufacturer, like FLPL, will be able to help you with this. Even if you only have a very vague idea as to the products that you want to sell, we’ll help you to flesh those plans out, choose a micro-niche to target, and create the perfect products.
Polish Up Your Branding
The stronger your branding, the better your business will be able to stand out to consumers. They’re much more likely to buy from a brand that they already feel connected to, which is why memorable branding is so vital.
While you may think that your branding is already on point, spending some time polishing things up will never hurt. Make sure that your branding is consistent, unique, and memorable. Push your brand and get it out there, using everything from social media to more traditional techniques to do so.
Again, this is something that some private label manufacturers will help with. At FLPL, our clients have access to our branding and marketing team. They can help to take your current practices to the next level! Whether you want to power up your existing branding strategy or are looking for a complete overhaul, our experts can help.
Embrace an Omnichannel Approach
There’s a good chance that e-commerce will be a part of your selling strategy. However, in this day and age, a basic e-commerce store is no longer enough. Omnichannel is becoming the talk of the e-commerce world, and it’s something that your business needs to embrace if you want to make it to the top.
What is omnichannel? It’s a customer-centric approach that provides a seamless user experience across different channels. Netflix is one example – you can start watching a show on your laptop and then finish it on your TV. Many retailers are using this technique now too. They’ll send an email to get you onto their store or app, after which you do some browsing and save some items as favorites. You might buy them there and then or you may decide to complete your purchase the next time you’re physically visiting one of their stores. Either way, they’ve used multiple channels to complete that sale.
Research shows that adopting an omnichannel approach can significantly boost sales. This is down to the higher conversion rate, all thanks to the seamless customer experience. One interesting study also found that omnichannel customers tend to spend 10% more than single-channel customers – something else that many private label brands are making note of.
Provide an Experience
We’ve already talked about how private label brands are gaining a reputation for selling quality products. However, many consumers are now looking for more. In addition to purchasing a product or a service, they’re also looking for a larger experience that helps them create an emotional connection with that brand.
Again, this is where your branding is really important. A compelling narrative will appeal to your customers on a personal level. However, you could also make use of other immersive ideas. From virtual experiences to private events, this will give your customers the ‘extra’ that they’re seeking.
The result of this will not only be an increase in customer loyalty, but you’ll also find that your customers are willing to pay a higher price for an item. They’ll associate it with a higher value due to the overall experience that you’ve provided. As you can imagine, this can do the world of good for the profitability of your brand.
Private Label Brands Will Be the Future of Retail
If you’ve been thinking about launching some new products and building a brand, there are a few different ways in which you could go about this. While the alternative options certainly hold some merit, private labeling is definitely going to dominate in the future. Not only are consumers becoming increasingly receptive to private label brands, but taking the private label route offers so many benefits for your business too. You’ll save on costs, take fewer risks, streamline the manufacturing process, and more.
