23% of the dollars spent at an average retailer are now spent on private brands, according to Lisa Rider, VP Retail Marketing, at The Nielson Company. That’s nearly 1 dollar for every 4 dollars spent!
Needless to say those of us with a design practice that is seeing an increase in private brand development, have been sensitive to this for some time. Others in the consumer brand design industry ignore that number at their peril.
But for retailers that appears to be the good news. The bad news according to Ms. Rider, is that this market share will grow very slowly for the next decade, at less than one half of one percent a year. Yes, there will be exceptions, but that is Nielson’s overall prediction, given current demographic and economic expectations. The very quick jump in several percentage points that took place during this economic crisis, from roughly 20% to 23%, will hold, but not grow quickly from here.
I can tell you there was some disagreement about this assumption among the retailers I spoke with in the hall. Most seem more optimistic.
This event was organized by Christopher Durham of the site My Private Brand. And during his comments on Tuesday he expounded on a number of issues. Some of the most interesting included,
1. Consumers don’t care who owns the brand
2. Stop whining – no one deserves shelf space
3. Tell a story
4. Make private brands a core competency
5. Make private brands a strategic pillar
6. Be proud of your brand
7. White is dead
I found the last idea the most intriguing, given the recent importance that white has played as a foundation of many new, and closely watched, private brand introductions, as well as a core element in a significant number of new national brand identities.
As Michael Ellgass, Senior Director of Grocery Marketing for Walmart, said during his comments on their Great Value brand, “the home team always wears white.”
More on this color debate (is it really a color or just a default, and can you own it and build a brand around it) in the next few days.