How private brands are driving demand — and gaining a following

When we think of the history of private brands, for a long time it was largely associated with copycat generics with good margins. Then over the years, the sector gained a reputation as a national brand equivalent. Today, private brands set the pace for the rest of the industry. They have gone from being a mere financial tactic to a key point of difference for retailers, and a driving force behind store choice. 

In fact, Daymon’s research shows that more than 5-in-10 shoppers said they shop at a store specifically for its private brands. What’s more, Daymon finds that the more private brands customers buy, the more committed they are to that retailer. Said differently, private brands drive demand and establish a dedicated following not easily replicated by national brands. 

Growing acknowledgment of the power of private brands has sparked a renewed focus on the industry, with an increasing number of retailers doubling down on their private brand businesses. As a result, one of the biggest trends we are seeing in private brands today is the shift from imitation to bold innovation. Thanks to mounting consumer interest and affinity towards private brands, the time is ripe for retailers to pioneer. In fact, 85% said they trust private brands just as much, and 81% said they buy private brands on every shopping trip. In short, we are seeing the balance of power shift to private brands.

With renewed industry focus and permission to pioneer from consumers, drug retailers have the opportunity to take a more progressive stance on their private brand programs and leverage growing desire to be proactive in managing personal wellness to spark innovation. 

Today’s shoppers are more engaged than ever in taking control of their health, which has evolved from condition-based treatment to a more holistic, hyper-personalized approach that balances physical and mental agility. Retailers can seize this opportunity through their private brands to deliver new and unique solutions that plus up performance, personalization and functionality, particularly in the face of rising healthcare costs. 

Consumers are now much more educated on ingredients and so feel confident in purchasing private brand products to solve for their health-and-wellness needs. What’s more, private brands have started to respond to consumer demands for cleaner labels where such unnecessary ingredients as dyes and preservatives have been removed, thereby further building credibility and confidence with the consumer as preferred options to meet their wellness goals.  

Even in beauty and personal care, private brands are beginning to rise to the occasion. Shoppers are seeking products that not only are effective but also align with their personal values regarding natural ingredients, label transparency and social responsibility. 

In turn, they are embracing solutions that are as close to nature as possible, giving them access to cleaner and healthier products, while reducing their impact on the planet. Progressive retailers are responding with private brand innovation that harnesses the power of plant-based ingredients, such as adaptogens and superfoods, as well as eco-friendly formulations — think upcycled ingredients and sustainable packaging. 

Expect to see more follow suit to capitalize on this intersection between beauty, wellness and social consciousness. In doing so, retailers will deliver on the needs and results shoppers seek, while making them feel good about their purchase to build connectivity and loyalty.

Private brands will continue to be the key to success in 2020 and beyond, as long as retailers use them to innovate and lead. In today’s highly dynamic and competitive retail environment, a strong private brand program provides the strategic lever needed to drive traffic and store choice. Adopting a culture of approaching private brands in this way opens the door to new opportunities for evolving well beyond the norms of the industry.


Nicole Peranick is senior director of retail transformation at Daymon. 

More Blog Posts In This Series