Private labels connect stores to shoppers

Target store
Target is one of the retailers capitalizing on private-label brands. (Mike Mozart/CC BY 2.0)

It seems that many retailers are jumping into the private label game, and Amazon recently announced it would be adding new items to its list of homegrown products. Matt Sargent, senior VP of Magid, says it is becoming crucial for retailers to not only develop private-label brands but to create brand identities that emotionally connect with shoppers.

So what are the four standout benefits to starting a private label?

Sargent says No. 1 is differentiation: A private label is the best way to stand out from other retailers.

Free Webinar | Presented by LexisNexis Risk Solutions

When Preventing Cybercrime Comes at the Expense of Net Adds: How Can We Fight Both Fraud & Friction?

Don't miss this discussion on emerging cybercrime trends, their impacts on customer experience, and how you can reduce friction, while mitigating risk, throughout the customer journey.

Second is traffic drivers: Having something that no one else does allows a retailer to drive traffic.

The third benefit to private label is category expertise: Having a private label and doing it well allows a retailer to develop a sense of category expertise. Sargent cites REI as an example.

"If your questions are about camping, you to to REI," he said. 

RELATED: REI to close Black Friday and grow #OptOutside

And the final greatest benefit is increased assortment without the cost: Customers want a choice, but having a wide assortment of brands is costly to the retailer. But if the brands belong to the merchant, the costs are easier to control. 

Still, there are additional benefits to store-branded products, such as better control over a brand's identity a faster process for getting products from the design phase into the market and the ability to better control the product's emotional connection with consumers. 

RELATED: Jet joins Boxed, Amazon in private label competition

Beyond REI, Sargent notes that Target has done a great job creating private-label apparel. It's no surprise, as he believes that grocery, apparel and furniture are more prone to the private label trend than other retail divisions. 

Still, retailers need to open their eyes, as private labels are the wave of the future.

"This is not a passing phase," Sargent says. "Private label will be a growing determiner of success for all retailers." 

Read more on