Daily Insights

A Penchant for Private Labels

By: Cymone Thomas | Sep 05, 2019

The sound of U.K. supermarket sales rebounding may initially be music to brands’ ears. But news that shoppers spent £85 million more on private labels than they did the previous year can quickly turn their smiles to frowns.

Private labels in Gartner L2’s Digital IQ Index: Food UK overshadow Index brand’s visibility on retailer platforms across all analyzed categories. They are particularly strong in the frozen and canned food categories, which correlates with reports that these items are among the private labels that shoppers purchase most frequently. Despite the competition, retailer platforms can’t be abandoned altogether as only 15% of tracked brands offer direct-to-consumer commerce. Plus, their sheer scale and reach is far greater than brands can achieve on their own.

Google search provides a fairer opportunity for brands to compete by leading consumers directly to retailer product pages, avoiding category pages dominated by private labels. But when it comes to value-based marketing, tracked brands miss a trick.

Google searches for “gluten-free”, “vegan” and ‘healthy meal” have been on an upward trajectory since 2012. Retailers are already leveraging this by optimizing content and driving product innovations. Indeed, Sainsbury’s and Tesco are among retailers that launched private label vegan products last year to claim a share of a market expected to climb 26% by 2021 to reach £932 million.

Currently, Index brands fail to optimize content for health-related keywords, leaving retailers to push their private labels and other brands in Google Shopping ads. Optimizing product pages and repositioning relevant products to align with consumer trends will help brands secure some quick wins in search. Let’s hope this one doesn’t fall on deaf ears.

See more: Europe , Retail , Search , Google , Sainsbury's , Tesco