Definition

Private Labels are labels offered by retailers in competition with national brands.

Key Findings

• Few people actively reject (or, avoid buying) Private Labels; non-users of any Private Labels are only 20% in US and Australia, and 8% in UK
• ~60% of Private Label rejection occurs due to factors not linked to a past negative experience, with the primary reason being low perceived quality. This is the opposite of national brands.
• National brands enjoy a higher level of knowledge amongst their non-users/light buyers than do private labels (of a similar penetration size) even within a store.
• Private Labels compete with National Brands and other Private Labels in line with their market share; in line with what Duplication of Purchase would predict
• Private Labels compete more with each other when there’s: a large price gap between Private Label and National Brand; high purchase frequency of the category; and when price promotions among the national brands are common
• Private Label brands do not appeal to different buyer groups, so everyone is potentially a Private Label buyer
• Private Labels are bought in the same manner as other brands…their loyalty and penetration metrics look as they should for brands of their size; in line with Dirichlet norms (when looking within a chain)
• So, Private Labels and National Brands tend to sell to the same sorts of buyers and behave in a predictable, normal way

Best Practice

• To compete with Private Labels, National Brands must focus even more so on building mental and physical availability