Private Label Strategy

TEN

Innovate Brilliantly to Beat Private Labels

Private label success in categories with low innovation versus those with high innovation: 56 percent higher

MANAGERS, ACADEMICS, and consultants all agree that the single best approach to combating private labels is to offer innovative new products. As an industry observer noted about managing relationships with Wal-Mart, “You need to bring Wal-Mart new products—products consumers need. Because with those, Wal-Mart doesn’t have the benchmarks to drive you down in price. They don’t have the historical data, you don’t have competitors, they haven’t bid the products out to private-label makers. That’s how you can have higher prices and higher margins.”¹ This could be said about relationships with ...