Private Label Power

The New Power of the Private Label Brand- “No Name—No More.”

By Stefan Paul

Just looking at the many challenges that the US has encountered over the last several years including the dot com bust, Wall Street’s meltdown, corporate scandals, recession and layoffs, SARS, trade wars, wars in Afghanistan and Iraq, government budget deficits, and tensions with EU countries, one can begin to realize the pressures that have been exerted on its leading national brands. From Coca-Cola to Tide to Bounty and even Johnson and Johnson, the biggest and most respected category-leading brands have been feeling the pinch of a highly interconnected, rapidly changing and volatile competitive landscape. Literally no major brand is immune. Even mighty P&G has had taken the unprecedented step of reducing its brand portfolio by up to 25% to help it deal with the new market realities. But, with the turbulent competitive landscape finally looking manageable, another, possibly more significant, challenge is on the horizon that could change the nature of the “brandscape" completely: the rise of private label brands. Known as “house brands,” “no-name,” “generic,” or “retailer’s own,” these brands have been around for decades—usually eeking out an existence with their poor packaging, no marketing support, basic quality, and reliance on price competition. They were commodities—no real competition for the mighty national brands with their sophisticated marketing campaigns, brand management systems, advertising budgets, and fancy packaging. The key word here is “were” commodities... not any more. And this is the hurricane on the horizon, or the paradigm shift, that could be the single-biggest challenge national brands have ever come up against. And the signs are everywhere that this reality is well under way.

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