Branded vs Own Label - striking the right ranging balance

Striking the right balance between Branded and Private Label products is crucial for retailers aiming to meet diverse consumer needs.

Biscuit shoppers have a huge amount of choice in store, with 4600 biscuits lines being sold in Convenience in the last twelve months. This large number of SKUs can cause confusion both for the shopper in finding their favourites, and for the retailer in understanding what to stock.

However, over 80% of the value in the past year came from only 7% of all SKUs.

What is important to shoppers?

So, what plays a factor in the shopper’s decision-making process? According to Lumina Intelligence, Brand remains the top consideration factor for shoppers, with 59.3% of Convenience shoppers taking it into account.

Branded products are typically associated with established quality, trust, and consumer loyalty. These products often benefit from significant marketing investments, which help to build brand recognition and perceived value. For retailers, carrying well-known branded products can attract customers, enhance store credibility, and drive foot traffic. Branded products also tend to command higher price points, contributing to higher margins and profitability.

The role of Private Label

On the other hand, Own Label ranges allow retailers to differentiate themselves, create their own identity and build loyalty. These products are often positioned as cost-effective alternatives to branded items, satisfying cost-conscious shoppers.

By offering Private Label products, retailers can exert greater control over product quality, pricing, and stock management. This control allows for more flexibility in responding to market trends and consumer preferences. However, it is worth remembering that by having an Own Label version of a branded product, retailers may encourage trading down.

Create temptation through innovation

Incorporating new product development (NPD) in the range can significantly drive category growth, enhance shopper excitement, and boost impulse purchasing.

Within Convenience, the primary reason for purchasing on impulse is ‘I saw it and was tempted’. Treat missions also account for approximately 11% of Convenience shopping occasions.

By using eye-catching activations to drive NPD visibility, suppliers and retailers can encourage shoppers to give into temptation and try something new. Innovation is key to keeping the product range fresh, relevant, and competitive in a rapidly evolving market.

Suppliers should also consider creating limited-edition products. Limited-edition products not only maintain market dynamism and consumer engagement but also provide brands and retailers with the chance to gauge consumer interest in new trends.

Sources:

Nielsen IQ Symbols & Independents data to 29.12.2024

Lumina Intelligence Convenience Tracking Programme, April 2024, Q3 2024