Private Label Is Booming

Brandweek reports that Amazon is expanding its private label offerings. Its newest: Tom Douglas by Pinzon, brand of kitchen utensils from the celeb chef (see above). This isn't one of those generic private label excursions--it's more like Target's deals with designers, an attractive combination of style and value.

Best Buy is also adding private label goods, to help with market share and (of course) to boost profit margins. Its brands include Insignia, Dynex, Geek Squad, Init, and Rocketfish.

In short, it's no surprise that private label is booming. People are trading down, period. Even after the economy finally recovers, buyers are not going to go back to manufacturers' brands in every category. At least some of the new buying patterns will become long-term habits. In some circles, frugality is the new status symbol, which is just fine for private label manufacturers and retailers.

According to a survey just released by the Private Label Manufacturers' Association and GfK Custom Research:

• 91% of respondents plan to keep buying store brand products after the recession ends;
• 8% said they will stop buying these products once the economy rebounds;
• 90% of respondents said private label items are as good as, or better than, national brand products.

Nonetheless, some big-brand fans will remain loyal no matter what, and some will still make a show of buying certain brands when others can see the purchase or when the purchase has particular meaning (given as a gift, for instance). Next year at this time, let's see how many people really keep buying those store brands and how well the big brands are doing.