Private Label: The Millennial Preference?


I’ll never forget my first pair of Nikes.  My mom will back me up on this.  It was a big deal.  Those shoes were clean.  The shoes made me feel cool (and trust me I wasn’t cool).  But it meant something else: My family could afford them.  Those shoes were as much a socio-economic symbol as anything else.  That was my generation.  Branding was about cleaner, faster, shinier, whiter.  Conspicuous consumption was the end game (perhaps best hyperbolized in Brett Easton Ellis’ American Psycho) and certainly caused the “greed is good” gaffs that promulgated my generation’s consumer identity.

There is a sea change happening.  51% of millennial buyers have no preference between generics/private labels and national brands.  For example, the company Brandless sells high quality generic products at an intentionally low price point.  Everything Brandless sells is less than three dollars.  Status be damned, their strategy is to connect with a millennial buyer who is underwhelmed by Mad Men branding tactics.  Good product, fair price, no spin.  As millennial buyers begin to take front and center in the market Brandless may very well be on to something that the home service industry should consider: Private labelling in order to broaden reach and appeal among younger home owners.

Generic and/or private label product sales are exploding among millennial buyers.  According to research conducted by the Nielsen group private label sales grew by 4.6% over prior year in the retail clothing segment–a 2.2 billion dollar improvement.  The Private Label Manufacturing Association reports a 10.5% increase over prior year in the food and home goods market.  Amazon Basics, Whole Foods 365 private label products–two examples of aggressive private label strategies that are succeeding.  The German grocer store Aldi is opening locations across the United States.  Aldi is built on the private label concept and offers a “double guarantee” on these products (new product + money back).  Millennials will shop there and, like Brandless, walk away feeling like they haven’t been forced to choose between quality and price point.

From a traditional branding perspective engaging millennials means re-evaluating the efficacy of traditional branding strategies.  As Jeff Fromm notes, “We’re in the early states of consumers controlling the sales cycle.”  Millennial buyers–hyper connected, having lived through a post-2008 economy–want to participate in the research and purchase process.  They’re skeptical of manufactured promises in as much as they’re skeptical of stock photos.  More than half of millennials want benefits and a fair price.

From a contractors perspective this growing affinity toward generics and private label products may start a movement toward private label home service products and equipment.  51% of millennials would likely buy an air conditioner labelled “Cool” and a furnace simply labelled “Cozy” providing that the performance benefits were not seriously degraded and the price point was acceptable.

There’s a brilliant scene in Mad Men in which Don Draper says, “People buy things because it makes them feel good.”  As generic and private label sales start to explode it’s important to note that what makes people, genders, and generations feel good are radically different.  Turns out that smart millennial buyers feel good about saving money without compromising quality while participating in the sales cycle.  Private label products may be just what they’re looking for in their homes.

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