Private Brands Spur Product Innovation
Today, 80 percent of consumers say private-label products meet expectations. And we can all guess why, right? Value prices for quality products are all the rage. But while it’s great that people are onboard the private brand gravy train, the truth is that this transition has been especially beneficial for shoppers on the hunt for inventive private-brand products. Not too long ago, people had a difficult time getting the options they needed. Now, private brands have enabled the accessibility of products through innovation, personalization and reasonable pricing. But this goes beyond the copy-cat products private brand was once known for to now include products that address fashion, pet and beauty needs. These categories all have private brands that are changing the retail game. Therefore, if you’re a company looking to penetrate these verticals, check out some recommendations for getting it right.
Private-label clothing brands are getting more personalized than ever with the creation of niche lines like Target’s brand for kids, Cat & Jack. Since the line launched last year, Cat & Jack has surpassed the $2 billion mark to be one of Target’s largest brands, proving the opportunities in this vertical. However, what has stood out in terms of innovation is what the brand has managed to accomplish outside of the mainstream. Recently, Cat & Jack grew to include a selection of sensory-friendly pieces that help make children with autism, among others, do away with itchy tags and uncomfortable seams.
What’s more, Cat & Jack is now making adaptive apparel for children with disabilities. So what does this mean for others looking to break into private-label fashion? Take a cue from Target and look for fashion white space that meets the needs of those who have yet to be personalized to, while also appealing to general trend-seeking consumers. And as new style trends emerge, experiment with those. Apparel is a large category that remains highly fragmented, so take advantage of that. After all, there’s a reason tall and petite clothing options became so popular.
When it comes to pet food, premium continues to reign because many shoppers view their pets as an extension of the family, with 84 percent saying they pay as much attention to the ingredients in their pets’ food as in their own, according to Open Farm. Because of this, we’ve seen several innovations in the private-label pet food industry that are aligning more closely with the values of modern U.S. consumers. Kroger’s Abound pet line is a glowing example of this since it provides food that is made of all-natural ingredients, is free from fillers and more, and blends in trendy super foods.
In 2017, a survey conducted by Nutro showed 75 percent of dog owners said their clean-eating efforts influence what they feed their dogs. Take Kroger’s lead and look at how to integrate new labels like farm-grown, sustainably produced, minimally processed and, for proteins derived from livestock, antibiotic and hormone-free or humanely raised. As humanization continues to impact pet food, be sure to also keep a lookout for plant-based options and pet subscription services, too. Who knows, maybe one day we’ll see a private brand refrigerated section dedicated to pet food.
Private-label cosmetics are having a moment right now, with 18 percent year-over-year growth. To do away with the perception of stuffy beauty brands, retailers have taken a modern approach to makeup by innovating private brands. Walgreens has done this well by launching its CYO brand, which targets younger audiences with prices under $8. While the line gives shoppers a bang for their buck, the core of CYO is personalization (even the name is up for interpretation and can mean Create Your Own, Color Your Own, etc.).
By encouraging shoppers to #MIXLAYERHACK, Walgreens hopes to make products that lend themselves to the ever-evolving needs of consumers. To serve those needs, innovative products have made their way to the forefront of the line with the creation of two-tone square-shaped lipsticks, three-pronged eyeliner pens and more. By combining innovation and personalization, Walgreens has set itself up for differentiation in the marketplace. And for those looking to do the same, ask yourself how you can look outside of traditional makeup trends. If your customer is multicultural, look to incorporate international trends. If your customer is concerned with animal welfare, make a fully vegan line. One thing’s certain: the possibilities are endless.
While private brands are doing more to address personalization, there are still other categories to innovate in as shoppers look for products that are made with them in mind. Looking to other verticals, we’ve already begun to see a wave of private brands addressing this. The question is, what vertical will private brand personalize next?
Jim Holbrook is the CEO of Daymon, a provider of expert global retail strategies and services.
