SAN FRANCISCO, March 27, 2019 /PRNewswire/ -- Nine out of 10 leading retailers price their private label products lower than the average prices of their respective categories, reveals the latest study from DataWeave, a provider of Competitive Intelligence as a Service to e-commerce businesses and consumer brands, in collaboration with SunTrust Robinson Humphrey, a leading full-service corporate and investment bank. In line with the finding, the study reveals that an increasing number of retailers are viewing private label brands as a way to ensure sustained profitability.
"As the CPG space reels under intense competition, a number of retailers are doubling down on private labels to capture valuable additional margin. For instance, Kroger, Walmart, and Amazon Fresh have a higher degree of private label penetration than the other retailers we analyzed," says Karthik Bettadapura, Co-founder & CEO at DataWeave. "Our study unveils several such key insights covering product assortment & distribution patterns, price perception, and private label dynamics, revealing a clear snapshot of the disruptive transformations sweeping across the US CPG landscape."
Other key findings from the report, which tracked and analyzed 450,000 products across 10 leading retailers and 10 ZIP codes each, include the following:
Product assortment is emerging as a driver that's as critical as pricing when it comes to customer retention. Target, H-E-B, and Kroger have a head start here, offering the largest product assortments among the retailers analyzed.
A sharp assortment strategy customized to local tastes and preferences is key to sustaining and enhancing customer satisfaction. Albertsons, Walmart, and Amazon Fresh lead here, revealing a higher focus on localized assortments.
"Home" and "Beauty & Personal Care" categories lead the distribution of private label products across retailers. The focus on these categories echoes a similar focus among national brands as well. These categories have the highest overall brand concentration, with around 4,000 brands each.
"The report emphasizes how customer experience has emerged as a stronger force over the past few years, with it informing almost every decision about pricing, product assortment, promotions, and private label investments," says Youssef Squali, Global Head of Internet and Media Equity Research at SunTrust Robinson Humphrey. "These dynamics will continue to be vital in driving profitable growth as online commerce in CPG scales aggressively in the near future."
DataWeave provides Competitive Intelligence as a Service to e-commerce businesses and consumer brands by aggregating and analyzing data from diverse Web sources at massive scale. DataWeave's AI-powered technology platform enables e-commerce businesses to make smarter pricing and assortment decisions for profitable growth, and consumer brands to optimize Share-of-Voice, improve e-commerce shelf velocity, and govern the online brand.