Private labels are now big retail's hot trend, driven by Gen Z's preference

Lately, there's been a lot of buzz about private-label brands in the retail world. It seems they're the new big thing! That's been supported by dozens of recent months' reports and surveys, where these store brands are advancing fast and even showing their dollar sales rise faster than some well-known national brands. That's according to a report from the Private Label Manufacturers Association, which reported that last year, store brands reached an all-time high with a whopping 20.7% share of all unit sales.

One major factor behind this trend is the rise in food prices, which have shot up by 25% over the last four years. The price increase has nudged consumers to give store brands a shot, with many finding them just as good as the national names, and at a better value. The same quantity—up to 50%—considers the store or the place of shopping depending on the presence of this or that private label products. Additionally, 60% of shoppers reported they've been buying more store-brand items compared to the previous year.

But here's the thing: it's not just the food. Take, for instance, the Tech Company Bazaarvoice. In a survey of 1,000 adults, it found that more than half were keen on private-label clothing and accessories. More than 80% held favorably to it.

Talking about the sustainable advocates under Generation Z, this is the segment that is at the forefront of private label acceptance. This past fall, PLMA learned that often, it's Gen Zs who are shopping store brands: 64% of Gen Z consumers are often shopping store brands. 51% of all consumers have based their shopping destination decisions on the availability of store brands. It looks like the youngest shopping cohort is setting trends that could make private labels even more popular.

On a much larger scale, yet another study from Bazaarvoice indicated that nearly 70% of consumers would explore new brands or have switched to them by now. So, what this percentage means is a huge chunk of consumers exploring options or staying ready to switch around their buying habits.

Going further into consumer attitudes, Zarina Stanford, the chief marketing officer of Bazaarvoice, told sourcingjournal.com: "They need to live up to consumers' expectations for private label products with the same vigor as one might for an entrenched national brand. This perception and reaction regarding the needs of consumers is tantamount to the success of private labels. One would guess that this is what Stanford would say: no doubt, the companies that listen to the consumers, who are their bosses, will, without any doubt, have success in the realm of private labels.

So, what's the takeaway from all this? This is the change of what consumers want and new economic factors like inflation. Also, there is a new generation of consumers whose preference is sustainability and smart spending. Already, retailers and businesses have taken note and know that being adaptable to these preferences could spell a big win in the retail market. As private labels continue to gain sharpness and attention toward more interest and consumer loyalty, they may redefine what makes a brand successful in today's marketplace.

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