Today, there are more private-label brands on the market than ever before. In fact, according to one survey, most consumers in Canada choose private labels over national brands when grocery shopping. Clearly, in-house brands are on the rise, and it’s more than likely this trend will continue to grow over the coming years.
As a retailer – especially an e-retailer – taking advantage of this trend can help your business grow and improve your profit. In this blog post, we delve into the world of in-house store brands, explore the advantages they bring to the table, and give you tips on how to venture into this lucrative and innovative territory.
Private Label Brands: Definition and Benefits
First, let’s get the basics out of the way by explaining what exactly private brands are. In short and simple terms, private label brands are products owned and marketed by a retailer under its own brand name.r
Notice we said ‘owned’ and ‘marketed’ by a retailer but not ‘manufactured.’ This is because private label brands can but don’t have to be made by the selling retailer; in fact, in this arrangement, goods are often manufactured by one company for another, which then brands, markets, and sells them.
This strategy has numerous benefits for the retailer, which is why it has gained traction across various industries, including fashion, beauty, electronics, and beyond. Some of these benefits include enhanced profit margins, flexibility and control over product development and inventory, brand differentiation, and more.
- Increased Profit Margins:
By cutting out the middleman and directly controlling the production process, retailers can greatly reduce their costs and, as a result, enhance their profit margins. The retailer can not only set but also control their prices, which is not possible with branded goods.
- Brand Differentiation:
It’s good to stand out in any market, but most especially in a saturated one. This is another area where store labels can help. Because they can be as exclusive or unique as the retailer wants, these goods create a unique selling proposition, helping a retailer differentiate themselves from competitors.
- A Stronger Brand Identity:
While we’re on the subject of branding, here’s another area where in-house brands can help you – creating a more powerful brand identity. From packaging to marketing, every element can be aligned with your brand’s values and messaging.
- Control Over Goods:
When you partner with third-party brands, you surrender control over product development, quality, and inventory. With in-house brands, you regain control. This flexibility can help you adapt swiftly to market trends, make strategic adjustments, and maintain consistent quality standards.
- Better Long-Term Customer Relationship:
Understanding your customer base is crucial for sustained success. Private-label brands allow you to tailor products to your audience’s specific needs and preferences. This targeted approach can lead to stronger customer relationships and increased customer satisfaction.
How to Get Started
If you’re considering venturing into private-label brands, start by thoroughly researching your target market. Understand their needs, preferences, and pain points so you can develop products that offer a solution to their problem(s), or that truly resonate with your audience.
To do this, you’ll want to take full advantage of all technological advancements on offer, including industrial design rendering tools, which are bound to transform the landscape of e-commerce over the next few years.
Imagine being able to offer potential customers a lifelike, detailed preview of your latest private-label product, right from the comfort of their screens. Industrial design rendering with KeyShot allows for precisely that. This type of software enables you to create photorealistic 3D renders of your in-house products, enhancing the overall customer experience while allowing you to stand out from the competition.
Of course, since quality is non-negotiable here, you should also partner with reliable manufacturers. Conduct thorough research to ensure that your chosen manufacturers uphold quality standards and look for companies that share your commitment to excellence. At the same time, make sure they can accommodate the flexibility needed for private label customization.
When introducing your in-house products, invest in strategic marketing to create anticipation and excitement. Use social media, email campaigns, and collaborations to generate buzz around your new offerings, especially the exciting, next-gen renders of your private label products.
Once your store brands are in the market, closely monitor their performance. Track sales data, customer feedback, and market trends. It’s important to stay agile and be prepared to adapt your strategy based on real-time insights. The ability to pivot and evolve is crucial in the dynamic landscape of private-label brands.