BeautyMatter Mentions First Insight | Private Labels Challenge Dupes as Consumers Pull Back on Beauty Spending
Consumer Perception and Retail Profitability
Greg Petro, CEO of First Insight, noticed that the company’s AI-driven modeling identified an emerging consumer interest in private-label brands. That prompted a study titled The Quiet Takeover of Private Label Brands.
“Eighty-four percent of consumers trust private label as much or more than national brands,” Petro said, citing the research. The report also found that 45% of those polled say they’ve permanently switched to a private label when the product met or exceeded expectations.
Private labels, which are more sophisticated than ever, are being viewed as a good value, not just the least expensive option. “Gone are the days if a product had the Chanel name on it, customers would just buy. Consumers are extremely savvy, and if you aren’t creating a great product, with a great formulation, a value position, and something they want, they won’t buy,” said Petro.
Petro pointed out that sometimes consumers don’t even realize an item is a house brand. “Seventy-one percent of consumers thought they could spot a private label, but 72% were unable to do so when shown a side-by-side comparison,” Petro said.
Private Label Global Growth
There have been challenges in crafting successful private label brands, and the concept is not a panacea, according to Petro.
“Private brands offer a great opportunity for everybody if you do it in an authentic way. If you are doing it because you think you are an expert, you are going to lose.”
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