Catching up on Private Label Trends

In January, I predicted that private labels will do well in 2008. (See Private Labels Will Boom in '08.) Here are six recent news items showing that my growth prediction and the findings from Facing the Forces of Change®: Lead the Way in the Supply Chain are still on track.

1) HD Supply announced the launch of two new “proprietary” (a.k.a. private label) brands called Seasons and Brigade. According to a HD Supply press release: “The Seasons brand will be carried on products such as kitchen and bath fixtures and ceiling fans, ultimately used by consumers, while Brigade will be carried on heavy duty products, such as tools and hardware, ultimately used by professional contractors and trades people on the job.”

2) Industrial Distribution’s The State of Private Labeling in Distribution looks at developments at W.W. Grainger (NYSE:GWW), Wurth Industries, and IDC-USA. But don’t get confused by whether a distributor’s brand is called a “private label” or something else. Whether the distributor creates a brand or simply offers a non-branded product, the customer is buying the distributor’s brand rather than buying the national manufacturer’s brand.

3) Modern Distribution Management has a fascinating interview with United Stationers (NASDAQ:USTR) CEO Dick Gochnauer, who describes his company’s private label strategy. Quick quote: “You can’t avoid addressing a need the end user has. They are demanding some options in private label, and if you don’t fulfill it someone else will.”

4) A recent post by David Gordon and Allen Ray on their Electrical Trends blog are hearing that “a number of large, European-influenced companies continue to develop their product offerings.” You’ll hear more from David and Allen in the forthcoming Outlook 2009 report in October.

5) The Wall Street Journal recently noted that consumers are also shifting to private label / store-brand products due to the economic slowdown. (See Private-Label Goods Make Gains in Tough Economy.) Consistent with previous research, one analyst notes that private label brands takes share from second-tier brands more than the market share leaders.

6) According to Jason Busch at Spend Matters, his informal conversations with sourcing professionals who work for retailers in various segments of the market (e.g., food, general merchandise, electronics, etc.) indicate that private label goods are picking up steam.

---

Feel free to drop me a line or comment on the blog if you want to share your own company’s experiences.