What’s in Store for Walmart Private Label Brands?
Did you know that 84% of Walmart customers purchase private label products?
Eighty-four percent. That means four out of five shoppers regularly bypass big-name brands to buy items with Walmart’s own stamp of ownership on them.
With so much talk around Amazon’s private label push, it can be easy to forget that Walmart was first to popularize the trend more than three decades ago. From dog food to clothing, the world’s largest retailer has long offered its customers alternatives to well-known brands in a wide variety of categories.
With the private label war still going strong, Walmart continues to come to the battlefield armed with a growing array of branded products.
Why The Private Label Push?
Once used as a strategy to attract bargain hunters, Walmart private labels now include an ever-expanding variety of items with the goal of driving loyalty and profits.
The strategy is in line with demand from consumers, whose reignited love of private labels goes well beyond price alone.
Once likely to view private brands as “cheap” alternatives, many consumers now prefer them. One recent study found that 81% of consumers buy private-label products every time they shop. Another revealed that 25% buy more store brands than they did five years ago.
That’s not all. Nearly seven in ten shoppers say private labels offer extremely good value for the money, and 62% say buying private label makes them feel like a smart shopper.
With results like these, it’s easy to understand why Walmart continues to place increasing importance on its private label products.
First, the retail giant dropped its “everyday low price” image. When that worked, the company started investing in high-end areas such as wine and fashion. Fueled by further successes, the movement continues.
What’s In Store for Walmart Shoppers?
Earlier this year, Walmart launched a new line of “high-quality, trend-driven” furniture and home decor called MoDRN. It’s positioned as an exclusive, online-only specialty collection — one designed to promote consumer loyalty and sales in the increasingly crowded marketplace space.
Similar developments are evolving in the apparel category, which was recently expanded to include a curated collection of graphic tees, teddy coats and other fashion-forward styles. For that addition, Walmart revived and relaunched the once-popular label Scoop as its own private label brand.
These and other additions are further reinforcing Walmart’s image of quality, as well as its appeal to growing segments of consumers looking for more options online.
What’s Next For Walmart Private Labels?
Though it’s still too early to tell how the current private-label battles will play out, recent research offers some clues. Nielsen has found store brands to be growing three times faster than national brands, with much of the increase attributable to premium private labels.
Similar results were discovered in another report from CBInsights, which also concluded that private-label sales growth is three times higher than branded products
Walmart’s earlier attempt to launch a clothing line more than a decade may not have panned out. This time, however, the market is clearly ready for the retail giant to up its private label game.
This is one trend that we’ll definitely continue to monitor, so be sure to subscribe to ChannelAdvisor’s monthly newsletter if you’d like to receive updates as they occur.
Editor’s note: This blog post was originally published on August 10, 2018. It has been updated for accuracy and comprehensiveness.