IntroductionPrivate labelBrand owned not by a manufacturer or producer but by a retailer or supplier who gets its goods made by a contract manufacturer under its own label. Also called private brand.Private brands are also known asCorporate brandStore brandsOwn brandRetailer brands.
Private Brand Growth Some of the factors for this growth include:•Consumer Value - Store brand programs offer highquality products at retail prices that are often 10-30% less than national brand varieties.•Retailer Profitability - On the average, retailersprofit margins on private brand products are 10%higher than the profit margins on national brands.•Consumer Confidence - Educated consumersrecognize the value of private brand products andare unwilling to pay premium prices for nationalbrand products.
Contribution of sales
GROWTH OF PRIVATE LABEL BRANDS• The Marketing Whitebook 2010-11, the retail sector inIndia was worth $410 billion, of which organized retailcomprised 5% at $51 billion.•private label brands constitute 10-12% of organized retailin India.
RISE OF PRIVATE LABELS• Gaining prominence in big retail outlets• Recession spears private label appeal• Brands in their own right .• Private labels do matter : - Highly profitable - Bargaining Power - Improved planning - Consistency in stock availability
Growth drivers Retailers need differentiation and better profit margins. They imitate designer brands which will reduce their R&D expenses. Better margin and better control in deliveries. Independent pricing strategy. Brand equity and loyalty.“Five years back, our private label brands were around 17.5% in terms of sales and today they are almost 22.5 %— at 5% increase - says Salil Nair COO, Shoppers Stop Ltd.
SOURCE:- Private label from consumer perspective 2010
Private Label Apparel Brands SHOPPERS STOP PANTALOONS Austin Reed Wear Denim/ RIG Biba / kashish/Stop UMM/ Lombard 7 East / Jeevah / Life Ajile Mario Zegnoti/ Tantra Rangmanch T Base / Veda AnnabelleVettorio fratini/ Mens wear Honey
Private Label Apparel Brands WALMART BIG BAZAAR OP/ STARTER NIGH HOODFADED GLORY/ PLAINS AFL GEORGE SPUNK DICKIES SHRISHTIMISS TINA/ WHITE STAG D J& C SASSON SACH
Challenges faced by Private Labels Higher risk of inventory. Higher Research and Development expense. Markdown or return allowances will not be available. Failure of the product will create a negative image about the retailer. More marketing expenses.
Private labels are slowly becoming theprotagonist in the big Indian retail growthstory.