Marketing trends have changed dramatically over the past few years, thanks in part to the fast moving pace of the internet, but also due to the boom in buyers of the Millennial age. The youth of yesterday is now the buyer of today, and they collectively have $200 billion to spend in 2018 alone. That’s a huge number and as a private label retailer you should want a slice of that profit pie. Millennials and Generation X’ers have been coming into their own financially and have seen the benefits of private labeling when those before them could not.
Brands and manufacturers have long considered private labeled products to be “category killers.” They fear they’ll dilute the market with lower quality similar or even identical products at cut rate prices that will take away from their profits. To be fair, they’re not entirely wrong, as retailers have seen success in offering their own private labeled products as of late. In fact, products labeled under a retailer’s name account for one-fifth of all grocery sales in the United States. While this does indicate a loss of revenue for manufacturers, they’ve seen the benefit of offering their own premium private labeled products. By offering products at a lower cost but from a reputable brand or manufacturer, they’re seen as an economical option without a loss of quality.
Value without Compromise
The above concept brings us to the main reason Millennials and Generation X’ers have started flocking to private labeled products. Given the fact they’ve grown up in more challenging economic times and the cost of living rising every year, they’ve had a crash course in learning the value of a dollar. Most live at home and have had to implement a budget to which they strictly adhere. However, they don’t want the cheap knock-off products that most people think about when they hear the phrase “private label”. They want a good value without compromising their want/need for quality.
Embrace the Customer Review
Here’s a statistic that should convince you to market your private labeled products to Millennials: 51% don’t have a preference when it comes to choosing between private labels or national brands. This means that if given the opportunity to purchase a quality product at even a slight discount, even if it’s not branded, they’ll buy it. However, what really gets their wallets open are customer reviews. Thanks to the internet and social media, word of mouth takes on a whole new meaning. Some companies tend to shy away from encouraging reviews from customers. But when you consider the fact that 84% of Millennials say that user generated content or customer reviews on a product or company can have an impact on their purchasing decisions, it’s impossible to ignore.
The private label industry has exploded over the past few years, and an emerging buying market is expected to do the same with Millennials. Let us help you get started so you can tap into that $220 billion spending opportunity with your own private labeled products so you too can find success amongst the Millennial and Generation X buyers.