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.
Now that the private label war is on, Walmart is entering the battlefield armed with a growing array of branded products.
Why The Private Label Push?
Driven by a view that private labels will play an increasingly critical role in driving loyalty and profits, Walmart is in many ways revamping its approach. Rather than focusing solely on attracting bargain hunters, the retailer is expanding its private-label lines with trendy items that are likely to appeal to a wide array of shoppers.
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, two-thirds of surveyed shoppers now believe that private label products offer extremely good value for the money. More than 70% say private-label quality has improved over time.
This helps explain why a retail giant long known for its “everyday low price” image has decided it’s time to invest in high-end areas such as wine and fashion.
What’s In Store for Walmart Shoppers?
Several new clothing lines, such as Wonder Nation and Time and Tru, are replacing older ones — in part to offer more fashionable styles, and in part to cater to a growing segment of consumers willing to buy clothing online.
Though it’s still the largest clothing retailer in the US, Walmart is facing stiff competition online. Some 38% of Amazon Prime members bought apparel on the marketplace last year, closing the gap with Walmart’s 42%.
Clothing is far from the only category making new inroads with consumers, however. In food and beverage, Walmart is further reinforcing its image of quality with a new line of $11 private label wines designed to “drink like a $30 or $40 bottle of wine.”
What’s Next For Walmart Private Labels?
Thought it’s still 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 growth coming from premium private labels. Kantar Retail’s grocery analysts, meanwhile, are predicting private label growth between 2017 and 2022 to outpace the previous five years.
Widespread acceptance among consumers has also put private label brands in a position to potentially “steal” as much as $64 billion from national names within the coming decade, according to one report.
Walmart’s earlier attempt to launch a clothing line more than a decade may not have panned out. This time, however, the market appears to be more than 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.