Nine out of 10 leading retailers price their private label products lower than the average prices of their respective categories.
That’s according to a study from from DataWeave, a provider of competitive intelligence as a service to e-commerce businesses and consumer brands, in collaboration with corporate and investment bank SunTrust Robinson Humphrey. The study revealed that an increasing number of retailers are viewing private label brands as a way to ensure sustained profitability.
“As the CPG space reels under intense competition, a number of retailers are doubling down on private labels to capture valuable additional margin,” said Karthik Bettadapura, co-founder & CEO at DataWeave. “For instance, Kroger, Walmart, and Amazon Fresh have a higher degree of private label penetration than the other retailers we analyzed.”
Other key findings from the report, which tracked and analyzed 450,000 products across 10 leading retailers and 10 ZIP codes each, include the following:
- Product assortment is emerging as a driver that’s as critical as pricing when it comes to customer retention. Target, H-E-B, and Kroger have a head start here, offering the largest product assortments among the retailers analyzed.
- A sharp assortment strategy customized to local tastes and preferences is key to sustaining and enhancing customer satisfaction. Albertsons, Walmart, and Amazon Fresh lead here, revealing a higher focus on localized assortments.
- Home and beauty & personal care categories lead the distribution of private label products across retailers. The focus on these categories echoes a similar focus among national brands as well. These categories have the highest overall brand concentration, with around 4,000 brands each.