Private label sales are set to outpace those of national brands

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KEY TAKEAWAY: Private label’s online dollar share more than doubled over the past year, according to Nielsen. CPG private label sales now account for 3% of online dollar sales, up from 1.3% two years ago. Walmart is leading the space with a 48% share of CPG online private label sales, up from 27% in 2017.

Consumers have welcomed private brands into their shopping carts, and in-store momentum should continue to build in the years ahead. Store brands currently account for 17% of CPG sales in brick-and-mortar and sales of private label in-stores have increased by $7.9 billion over the past three years, according to Nielsen.

From Amazon’s new skin care line to Chewy.com’s new private-label pet food, retailer branded products are no longer a niche online. CPG private label accounts for 3% of online dollar sales, up from 1.3% two years ago, and some categories-particularly household care and baby products-are caught in the crosshairs.

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“Private label has emerged as the new challenger brand in e-commerce,” Nielsen researchers noted in their report.

While most retailers offer private label products online, they may not be doing enough to push the sale and make their own brands visible. E-commerce giant Amazon is ahead of the curve with an abundance of private label lines, many of which fall into the household and baby product categories. Other online-only retailers like Thrive Market and Brandless have made names for themselves by selling high-quality private label products and cultivating loyal customers in turn.

Private label sales are set to outpace those of national brands, according to IRI data. But IRI also found that traditional grocers are losing a significant portion of these sales to mass and club retailers like Costco. By pumping up key store brands through e-commerce, grocers could very well get their mojo back.

Brands in household care and baby products, take note. Be prepared to learn from private label’s online success, while re-establishing the credibility you’ve built over time, or risk alienating consumers entirely.

Yet for all categories, private label growth opportunities online remain-some much more than others. Take health and beauty, for example. Its private label products together do not even register a percentage point of online dollar share, yet they have 17.9% of in-store dollar share.

Originally published at https://www.newmediaandmarketing.com on June 28, 2019.

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Marketing contrarian with over 15 years of developing leading edge and award winning digital marketing initiatives.

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