Executive Briefings

Private Label Goods Highly Beneficial to Retailers, Study Suggests

The private label industry now represents one in every $6 of spend in the United States and poses a significant opportunity for retailers to drive margin, differentiate products, and serve consumer's wide and changing tastes.

Private Label Goods Highly Beneficial to Retailers, Study Suggests

According to Deloitte's new Private Label Sourcing Survey, several retail trends are spurring private label growth. Drawing from the responses of nearly 400 apparel, general merchandise and grocery retailers, the study also uncovers the pressures on retailers to manage costs, turn new merchandise around faster and provide consumers a lens into sourcing practices.

 Key trends from the survey include:

More Than Cost: Faced with strong market pressures, retailers reported that they are focusing efforts on product quality, speed to market and mitigating risk to satisfy consumers, with the majority ranking quality assurance programs as the top strategic response for the second year running.

• Fewer, Deeper Manufacturer Relationships: With 3 in 4 ( 76 percent) retailers already or planning to consolidate vendors, the industry is placing bigger bets on fewer manufacturers, causing potential ripple effects that could upset the current sourcing landscape.

• Mixed Success on Reshoring: Reshoring production to domestic vendors was retailers’ number one emerging response to market pressures with nearly one third (32 percent) planning to reshore in the future, yet across categories only 50-70 percent of those that have attempted to reshore have succeeded. Among companies claiming successful experiences, only 65 percent reported improved top-line growth.

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According to Deloitte's new Private Label Sourcing Survey, several retail trends are spurring private label growth. Drawing from the responses of nearly 400 apparel, general merchandise and grocery retailers, the study also uncovers the pressures on retailers to manage costs, turn new merchandise around faster and provide consumers a lens into sourcing practices.

 Key trends from the survey include:

More Than Cost: Faced with strong market pressures, retailers reported that they are focusing efforts on product quality, speed to market and mitigating risk to satisfy consumers, with the majority ranking quality assurance programs as the top strategic response for the second year running.

• Fewer, Deeper Manufacturer Relationships: With 3 in 4 ( 76 percent) retailers already or planning to consolidate vendors, the industry is placing bigger bets on fewer manufacturers, causing potential ripple effects that could upset the current sourcing landscape.

• Mixed Success on Reshoring: Reshoring production to domestic vendors was retailers’ number one emerging response to market pressures with nearly one third (32 percent) planning to reshore in the future, yet across categories only 50-70 percent of those that have attempted to reshore have succeeded. Among companies claiming successful experiences, only 65 percent reported improved top-line growth.

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Private Label Goods Highly Beneficial to Retailers, Study Suggests