What: Private labels were unexpectedly fortified by the Covid-19 crisis.

Why it is important: Following the meeting we held on Private Labels in January 2021, some of the lessons learnt and pieces of advice displayed by Alix Partners echo our conclusion.

Given the fact that, usually, private labels sell in store, 2020 should have seen their share of business decreasing significantly in a newly digital world. However, Alix Partners points out the fact that digitalisation goes along with knowing the customer better, which, for some retailers, allowed them to not only optimise their private label business, but increase it.

It is worth reminding that private labels can represent a significant portion of the business: USD 2 billion for Target (with 4 brands), a fourth of the turnover for Costco, or more than EUR 300 million for El Corte Inglés.

Alix Partners identifies 3 key success factors for the private label business:

• Customers insights should be injected into all steps of product development processes. This should be eased by the access retailers have to their own customers’ data through their various payment and loyalty schemes,
• Make sure the assortment completes in the best way possible the national brands offer,
• Define the operating model according to the targets: maybe historical processes (especially in production) might have become outdated when compared to the actual objectives of the brand

Alix Partners Private Labels