Retailer brand vs own-brand

Differences between retailer brand and own-brand

Each of us has, at least once in our lives, consumed a retailer brand product, otherwise called a white label brand. But what exactly is a white label brand and how is it different from a market-leading brand? 

Interestingly, retailer brands originated in Germany during the Second World War. These were times of crisis and that was precisely what triggered consumers to buy cheaper products from brands that were unknown. Over time, this spread to other countries, for example in Spain it was not until the late 70s when the Simago supermarkets began to market these brands.

But where does the white-label name come from? The packaging of these products was basic and white, and although at first they were only food and hygiene products, today we can say that white brands include almost any type of product.

What is a white-label brand?

Expert marketers describe what a white label is as follows:

"A manufacturer's or distributor's line of generic products is called a white label. White labelling is generally cheaper than front-line brands because of, among other things, lower promotional costs."

"Also called white label are those unbranded products that are purchased by supermarket chains to put their own trademark on them. "

Therefore, we can say that a white label brings together a line of products that is offered under the distributor’s own brand, usually a supermarket, hypermarket or large store. In other words, the process is as follows: 

  • A distributor commissions a product from a company and that company manufactures it. 
  • The company then provides it to the distributor, who then sells it to the end customer under their name or trademark. 
  • This does not mean that the manufacturer is not the same as the leading brands, only that it carries an unknown brand name. 

Characteristics of a white label

White-label products are mainly characterized by the following:

  • They do not bear the name of a well-known and prestigious brand.
  • They do not invest in advertising campaigns or packaging.
  • Their designs are basic and their packaging is cheap.
  • Their quality is usually perceived as poorer than that of a leading brand, although it is something that has changed a lot over time and no longer necessarily turns out to be true. 
  • Good value for money.
  • Because of the all the reasons detailed above, these products are cheaper.

As far as quality is concerned, this is a point that is still subject to much debate. Years ago, private label products were perceived to be inferior and of poor quality; this was reflected by a much lower purchase cost. 

However, we can now see a great evolution of these brands, which are highly valued by consumers for their high quality and affordable price. 

Surely if you stop to read the label of products of white brands, you will be surprised because in many of them who is the manufacturer appears. And here comes the surprise. These manufacturers are usually leading brands, hidden behind a white label.

The Future of White Labels

The reality is that the evolution of white labels has been tremendous in recent years. The latest financial crises have made these brands a staple of shopping carts, and retailers have been betting on them more and more.

In some countries, many of the brands that started out as private labels are now perceived as commercial brands. So, do you think it's good to bet on your own brand from the beginning?

Clearly, the evolution of private labels in recent years has further highlighted the importance of commercial brands. Users want to know who is behind each distributor and who is responsible for a specific product or service. 

For example, in the case of food, many users check who manufactures each product even if it is sold under a white label.

Therefore, in the end what they often do is buy the brand they like, even if it is through a white label.

It seems that the future is for the commercial brands that bet on a clear communication with their public, and that reinforce the values and the mission of the company. The first step to achieve it? Register the brand and avoid confusion with other possible competitors. From then on, everything will evolve from this first step little by little, as has happened with white brands.

 

Author: Edith Gómez

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