Store Brand Facts | PLMA

What Are Store Brands? Who Makes Them?

Simply stated, store brands are the products that carry the retailer's name or private brands. Surveys reveal that nearly every shopper buys store brands with a high degree of regularity and in volume. So, consequently, they are ubiquitous in the home. Store brand products can be found in the refrigerator, pantry, or medicine cabinet; in the office space, basement, shed or garage.

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They often carry the chain's own proper name, or a variety of brand names created exclusively by the retailer for its stores. In some cases, a store may belong to a wholesale buying group that owns labels made available to the members of the group. These wholesaler-owned brands are referred to as controlled labels.

Store brand items are offered in just about every one of the hundreds of food and non-food grocery categories: fresh, frozen and refrigerated; canned and dry foods; snacks, pet care, health and beauty items; over-the-counter drugs, cosmetics, household and laundry products; lawn and garden chemicals; paints, hardware, auto aftercare, stationery, and housewares; among other sections in the store.

Retail chains of all sizes develop and market store brands in various ways. They may create a whole line of products around a particular feature – such as Safeway's O Organics, Eating Right and Open Nature; Kroger's Simple Truth, Comforts for Baby, and Private Selection; Albertsons' Essential Everyday and Wild Harvest, or Aldi's Simply Nature.

In other cases, a majority of the store brand SKUs might all carry the same name – such as Costco's Kirkland Signature, Wal-Mart's Great Value, Whole Foods' 365 Everyday Value, or Meijer Gold. The chain's name can also serve as an eponymous store brand: Walgreens, CVS, Rite Aid, Family Dollar, DG, Wegmans, Giant Eagle, Publix, Raley's and Trader Joe's are examples.

Store Brands Are Everywhere

Store brands are everywhere. When it comes to how the products can help meet their family's needs, consumers are turning to private label in a variety of retail chains beyond their favorite food, drug and discount store.

Specialty chains – such as those selling home office products, hardware, domestic goods, consumer electronics, baby and child care, home improvement, do-it-yourself, pet care, toys, personal care and others – are bringing to market a variety of products that compete on equal terms with the national brands in that sector. Familiar store brands in these channels include eponymous lines from Staples, Ace and Petco; as well as unique brands from Home Depot (such as Husky, Hampton Bay, HDX) and Lowe's (Kobalt), among others. Store brands are becoming prevalent in these specialty chains for the same reasons they have grown in supermarkets, drug stores and discount stores. They are available in multiple SKUs and offer the same advantages in performance and savings that consumers expect from store brands that meet their grocery needs.

Many of these non-grocery chains started out primarily as sellers of big brands. But the emergence of high quality and dependable private label manufacturers in these spaces has enabled them to undertake a strategic expansion into store brands much like their counterparts in grocery have over the past few decades.

So, the store brands advantage is not just available to consumers with their cereal, orange juice and aspirin purchases. They can purchase store brand printing paper and writing instruments; toys and games; housewares, kitchenware, and small household appliances; tools and paint; and linens, towels and home décor such as vases, bowls and picture frames. They do so with the same confidence that they are getting top quality and performance at significant savings when compared with to the brands.

Where Do Store Brands Come From?

For many consumers, store brands have become an important ally in how they are able to provide their families with high quality, great value, everyday products at a lower cost than most national brands. And store brands have also become important to retail chains, another reason they have grown so quickly. They give the chains a way to set themselves apart from the competition and enable them to offer their customers more choice.

Historically, store brands signified good value for consumers while national brands were generally seen as the premium item in a category. That is no longer true. Many chains now offer premium products that are not solely focused on value but on uniqueness and high quality and performance. As they become more than just a place to buy products, a merchant, the nation’s stores are motivated to find and develop items they can put their own name or brands on and become a true marketer of their own goods.

But where do store brands come from? For the products, chains turn to store brands manufacturers. When they do, they demand high quality across the board – from ingredients to the supply chain, from the packaging and labeling to the final product itself. Store brands manufacturers who meet those high standards come in all sizes and many are listed on major stock exchanges. There are thousands of companies operating in hundreds of categories that supply products in partnership with retailers.

Store brands manufacturers fall into several classifications:

•Large national brand manufacturers that utilize their expertise and excess plant capacity to supply store brands.

•Small, high-quality manufacturers that specialize in particular product lines and concentrate on producing store brands almost exclusively. Often these companies are owned by corporations that also produce national brands.

•Major retailers and wholesalers that run their own manufacturing facilities and provide store brands for themselves and, in a few cases, for other retail chains as well.

•Regional brand manufacturers that produce private label products for specific demographic markets.

•Large, nationwide manufacturers of store brands across a range of food and non-food product categories who supply a multiplicity of retail chains and channels in the U.S. and even internationally.

Store Brands Meet All Standards & Requirements

These companies take steps to ensure their products meet the same exacting standards and requirements of national brands. Just like the big brands, store brands are tested and analyzed for quality and safety by independent companies before they ever reach store shelves. When it comes to food, retailers and their private label suppliers abide by the Nutrition Labeling and Education law that requires standard labeling, while content and health claims need to meet FDA regulations. Non-food items also conform to prevailing federal and industry standards and regulations.

Private label suppliers also manufacturer, package, and label products to meet the stores' own rigorous specifications. These may be tailored for a specific product and even exceed general standards on quality and performance. Each store’s private label line has its own unique identity and the products’ packaging reflects that. One of the reasons store brands have grown is the recognition of the importance of functional and attractive packaging. Not only how the package looks but also how it opens and seals; as well as sits on a shelf, pantry, tabletop, or refrigerator.

While packaging makes an important first impression on the shopper, ingredients and quality remain paramount. With most consumers saying in polls that they believe store brands are as good as, or even better than, national brands, the next logical step is to be more innovative. And innovative products can be found all over -- from fresh and frozen cases in supermarkets to health and wellness-oriented, diagnostic items on drug store shelves and to household cleaning products arrayed in discount stores. Another area of innovation is the development of products targeted to specific consumer needs, tastes and interests, such as ethnic, gluten-free, low fat, reduced calories, diabetes-approved, international and U.S. regional cuisines, and "better for you" items. Organics, plant-based, vegan, and natural are store sections that are particularly busy with such on-trend store brand introductions.

Store Brands: The Smarter Choice

As ever, store brands represent significant savings for shoppers. The proof can be found in the independent sales data. Using average cost per unit, in a store wide price comparison between store brands and national brands, it is estimated that U.S. consumers save more than $40 billion a year on grocery and household purchases by opting for the store brand over the national brand version of their favorite products.

As well, ongoing audits conducted on behalf of PLMA compare pricing at retail for store brands vs. national brands on about 100 typical shopping cart items in major supermarkets and mass merchandisers in selected markets around the country. These studies consistently demonstrate that shoppers save one-third or more on grocery and household items by selecting store brands over national brands. One of the largest contributing factors to the pricing differential that exists between store brands and national brands is the marketing expense incurred by national brand makers, which is passed on to consumers and referred to by some analysts as the “marketing tax.” Many of the largest CPG companies spend 20 cents or more of every dollar on trade promotion and advertising in an effort to drive sales and share and maintain their position in consumers’ minds. The strategy also supports brand equity in the eyes of key Wall Street analysts and shareholders, who place a premium on the public perception of a brand’s position in the marketplace in addition to the intrinsic worth of the products themselves.

Habit, familiarity, and successful mass market promotion and advertising driven by influential network TV and print newspapers were reasons shoppers were drawn to national brands a half century ago. In the internet and social media age much has changed, not the least consumers’ allegiance to big brands.

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Formerly national brand-loyal Americans are now more knowledgeable about the true value of products they buy and they are reaching instead for store brands. In the process, they are building new habits and making new friends. With top quality, unique items and solid savings, store brands add up to a smarter choice for shoppers.

In a worldwide market as highly competitive as the one we live in, which changes by leaps and bounds in a matter of months and even weeks, retail branding has become a fundamental tool for any company that wants to stand out in its sector. 

In the case of retail, this concept becomes even more important.

Retail branding has become one of the most effective ways to create an emotional connection with customers and differentiate yourself from the competition. In this article we will delve into its benefits and strategies for applying it to physical retail.

What is retail branding?

Retail branding refers to the process of creating and maintaining a brand for a retail business. 

It is the set of actions and strategies used to build a unique and coherent image that allows the brand to be identified and differentiated from others in the market. In short, retail branding seeks to create a personality for the business that connects with customers.

This concept appeals to the use of various marketing techniques applied to brand development. But not in any environment and space, only in physical stores. 

With retail marketing, commercial shops are designed centred on a brand, but also focusing on the customer experience. The aim is to ensure that the experience is optimal during the time that each consumer passes through the establishment.

Branding is much more than just a logo or a catchy slogan. It is about the way a brand is perceived by customers, including its personality, its purpose, its voice and tone, as well as the experience customers have when interacting with the brand.

How do you make retail branding the best it can be?

As retail design professionals, we must create an interior design that is identifiable with the brand, and achieve the creation and development of a solid, easily identifiable brand. 

In this process, it is crucial that the whole space has a coherent look and feel: from the store window to the content, the signs on the outside, the façade, the check out… All of this while also combining the sensations and what we want to communicate.

Beneficios del retail branding

What are the benefits of retail branding specifically for retail? These are some of the most outstanding ones.

Customer loyalty

The creation of a strong and coherent brand is key to generate an emotional connection with customers. This can lead to increased brand loyalty and loyalty to the brand. Therefore, with good retail branding, the store will be able to create customer loyalty and recurrence.

Differentiation

In an increasingly competitive market, creating a unique and recognisable brand is essential to stand out from the competition. Strong and well-executed retail branding can help businesses stand out and be recognised by customers.

Increased trust

A strong and consistent brand conveys a sense of security and confidence to customers, which can increase the likelihood of them making a purchase.

Attracting new customers

A strong, well-positioned brand can attract new customers and generate more interest in the business.

Increased profitability

When strong retail branding is achieved, it is possible to increase the profitability of the business through customer loyalty and attracting new customers, which can lead to higher sales and higher profits.

Strategies for applying retail branding to physical retailing

Now that we know what retail branding is and what benefits it brings to physical shops, let’s get to the heart of the matter: how to apply it and what strategies to follow?

Here are some tips and methods that we consider essential:

• Make things easier: Yes, what seems so logical turns out to be more complicated than many people think. First of all, you have to avoid barriers such as inadequate height and obstacles to access products; have useful signage with indicators that improve the experience and comfort; and, finally, eliminate waiting and queues as far as possible, especially in the payment area.

• Define the brand personality: How do you want customers to see you? What values do you want to convey? Brand personality is the essence of the brand and should be reflected in all branding strategies.

• Creating a logo and visual identity is essential to building a strong and recognisable brand: The logo should be simple, memorable and consistent with the brand personality. When we mention visual identity, we are referring to the colours, fonts and graphic styles that are used in all aspects of the business, from the physical shop to digital marketing.

• Develop a coherent communication strategy: This aspect is fundamental to creating an emotional connection with customers. A consistent communication strategy involves defining the voice and tone of the brand and ensuring that this is reflected in all aspects of the customer experience, including advertising messages, social media content and in-store communication.

• Creating a brand experience in the physical shop: The brand experience in the physical shop is essential to building a strong and consistent brand. This involves everything from shop décor and ambience to customer service and the way products are presented.

• Use packaging as a branding tool: Packaging is one of the first things customers see when they buy a product. Good packaging should be consistent with the brand’s personality and convey the quality and value of the product.

• Apply branding in the digital strategy: Digital presence is essential for any retail business. That is why branding must also be taken into account in the online sphere, whether it is a website, advertising or social media.

• Keep branding up to date: Branding is a dynamic strategy and must be constantly updated and adapted to ensure it remains relevant and effective.

A key tool in retail design

Retail branding is an essential tool for businesses that want to stand out in an increasingly competitive market, where retail design makes the difference from the very first minute. 

By creating a strong and coherent brand, businesses can create an emotional connection with customers, increase loyalty, differentiate themselves from the competition and attract new customers. 

In short, by applying retail branding strategies, businesses can improve their market presence and increase their chances of success.