The past decade has witnessed a huge rise in the growth and popularity of private label products. It is not just businesses who love these products, but consumers too lean towards private label products.
Private label goods including private label skincare products have certainly disrupted many industries in the most positive manner. Let’s analyze the important factors that drive their popularity along with 5 major reasons why consumers absolutely love them.
How Private Label Products are Thriving
Private label products go by different names including own-label brands and store brands. They are produced by different third parties, and are later sold under a business’s or retailer’s brand name.
An interesting point to note is that there was once a time when private label products were seen as low quality substitutes to high-end products. With time, however, they have evolved and give quite a tough competition to premium and national brands.
Recent reports show that the sales of private label products alone in the US make up for more than $200 billion across the globe. And they have quite substantial growth in the food, household goods, skincare and supplement sectors.
Huge retail companies including Amazon, Costco and Walmart have played quite a positive and significant role in growing private label products. They have done so by providing high-quality products at market competitive rates. Now let us take a look at why consumers are gravitating more towards private label products.
Why Consumers Lean Towards Private Label Products
Consumers nowadays are preferring private label products because of their exclusivity, affordability and excellent quality.
NielsenIQ prepared a report in 2023 that shows how private label products are responsible for about 19.4% of all the retail sales in the US. Moreover, McKinsey also conducted a survey in 2022 which discovered that 74% consumers think that private label brands provide similar or even better quality as compared to national brands.
Let’s uncover the top 5 reasons why consumers nowadays love different private label products.
#1- Great Quality and Pricing
Private label products offer a great combination of quality and pricing. This is a big reason why consumers nowadays love these products so much.
Mostly, private label brands try to collaborate with seasoned manufacturers so they can deliver top-notch quality. That’s how they build a reliable brand. Also, there are no middlemen involved when it comes to private label brands. Consequently, that results in low costs allowing the brands to offer products at economical rates to the consumers.
When customers get premium quality products at affordable rates, they are bound to love them.
#2- Innovative Products
Another reason why consumers prefer using private label products especially private label skincare goods is the level of innovation they offer.
Retailers and private label brands now invest more in innovative product formulations, premium ingredients and continuous testing to make certain their products fulfill national brand benchmarks, and even surpass them.
With this shift, consumers perceive private label products as premium alternatives to national brands.
#3- Sustainable and Ethical Options
Technology has brought about a great sense of awareness in society. Consumers nowadays make excellent use of it to increase their understanding of ethical sourcing and sustainability.
Moreover, consumers also understand that they have a role to play in choosing ethical products when it comes to skincare and other goods. This is why they now seek brands that complement their core values.
Private label brands have positively responded to this demand by providing organic ingredients, safe formulations, cruelty-free testing, and eco-friendly packaging. Modern consumers appreciate and respect all these features.
#4- Unique and Exclusive Products
Contrary to the mass-market brands, the private label brands come with a lot of exclusivity. Brands request for unique formulations and special customizations in their private label products to build an innovative and distinct brand identity.
Consumers always appreciate variety and uniqueness in the product offerings they get. Who doesn’t love special jojoba oil soaps and acne-reducing serums, right? Customers nowadays cherish unique private label products and show eagerness to purchase them even if they are available through exclusive retailers or brands.
#5- Reliable Reputation of Retailers/ Brands
Retailers and brands with excellent industry reputation such as Whole Foods (365 Everyday Value) and Target (Good & Gather) have built value, faith and dependability in their private label offerings.
Consumers, after having a good experience with certain private label products feel quite confident buying them. They know the retailers and brands are trustworthy and have built excellent goodwill over the years. The reputation of the private label brands and retailers does play a pivotal role in encouraging more consumers to choose private label skincare products and other goods over their national and international counterparts.
Final Thoughts
Private label products have undoubtedly brought quite a revolution in the e-commerce and retail ecosystem. Consumers and businesses are benefiting from these offerings in an equal capacity. If you are considering building your own brand of private label products especially skincare goods, make sure to work with a reliable manufacturer.
