Competition between Private Labels and National Brands in a Multichannel Retailer

Abstract

This chapter analyzes private label and national brand competition across online and offline channels. We analyze competition using three measures: market share, a loyalty index, and what is called in the literature conquesting power (a measure of the ability of a brand to capture nonloyal consumers). We first provide a brief theoretical introduction and literature research about the topic. We also do an empirical analysis using data of a multichannel grocery retailer that sells both its own private label and national brands, through physical stores and an online store. The data include the purchases made by a sample of multichannel consumers. We find that the private label increases, in general, its competitive position in the online channel, compared to the offline channel. However, this result does not hold for all the product categories. We discuss some drivers of this general improvement, as well as potential causes for the differences between categories. We conclude with some recommendations for multichannel retailers and manufacturers.

Determining the Influence of Private Labels on Sales of National Brands: A Qualitative Approach

“…However, in the Indian retail market, the concept of the private label is at inception (Gupta, 2015; Sardana et al, 2019). The share of private brands in India is less than 5 per cent and is estimated to reach more than 10 per cent by the end of 2020 (Arce-Urriza & Cebollada, 2017; Pani, 2013; Sebri & Zaccour, 2017). The growth of private-label sales in the Indian retail industry is primarily due to consumers’ increased preference for value for money and the changing socio-economic and demographic characteristics (Dhaktod & Chib, 2015; Gupta, 2015; Kumar et al, 2015; Nielsen, 2014; Pani, 2013).…”

“…The share of private-label brands (PLBs) is less than 5 per cent, which is estimated to grow twofold by 2020. PLBs are expected to account for around 15 per cent of the total retail sales in India (Arce-Urriza & Cebollada, 2017; Pani, 2013; Sebri & Zaccour, 2017; Wahi, 2017).…”

“…Brands promoted and distributed nationally under the brand name of manufacturers are termed as NBs, whereas brands established by marketing firms or retailers who get them produced by contract manufacturers under personalized labels are known as PLBs ( Bao et al, 2011;Arce-Urriza & Cebollada, 2017). Own labels, store brands, in-house brands, retailer brands, etc.…”

Private Label Brands Awareness: Advances and Prospects

“…This contention arises from consumers' worries about searching for and choosing private label brands to be their brands of choice [7,8]. With this, [9], the competition between private labels and national brands has expanded. Therefore, a brand with effective brand awareness strategies can win consumers better.…”