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Private label: Popular with retailers, too

April 20, 2010

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House brands and other private label products have caught on with retailers, but some hurdles remain.


Hot on the heels of consumers’ migration to private label products, a Retail System Research study indicates retailers continue to design, promote and sell more of their own private label merchandise. The research notes that the recession exacerbated an opportunity for retailers to reiterate the private label value message to consumers while maintaining, or in some cases, growing their selling gross margin.

The survey found a 22% jump in the number of retailers rating collaboration as a top opportunity from 2008, regardless of the retailer’s size. In contrast, “scorecarding” suppliers was perceived as only slightly more important now than in the 2008 study, while developing long-term relationships with trusted suppliers actually showed a slight dip. In both cases, less than one-half of retailers view them as good opportunities.

The study also indicated that “legacy technology” presents something of a stumbling block for retailers as it prevents them from moving forward on a variety of issues. In turn, “existing technology” has jumped to the forefront of inhibitors that prevent execution of a successful, forward-moving private label strategy, garnering an eye-popping 75% from those retailers who are considered to have managed private label effectively.


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