MediaBuyerPlanner: Retailers must change their marketing strategies if they hope to increase market share of private-label products, according to a new report from Information Resources, Inc.
The report, titled Private Label 2007-U.S. and Europe: Retail Branding Strategies Capture Market Potential, says that while most U.S. households buy some private-label products, penetration is low on a category-by-category basis, writes MediaPost. Few households buy large quantities of private-label products, and about one-quarter of private-label buyers drive 50 percent of sales.
Private-label sales also decrease with higher-income shoppers.
About 70 percent of private-label sales are in only 20 categories, with butter, gastrointestinal tablets, pasta, and cups and plates all seeing growth.
Grocery stores and chains have the largest share of the market, but club stores like Costco are seeing the highest growth.
In order to grow to its potential, private label merchandisers should invest in spending on innovation in product, merchandising and packaging, according to the report. They should also expand, not only into other product categories, but into multi-tiered offerings, such as offering value and premium brands.
Investing in point-of-purchase merchandising and using their best-known brands as umbrella brands for packaging could also improve penetration.
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