Strong own-brands, always part of the retail armoury, have taken on even greater importance as Amazon has grown.
As the online Goliath has pushed into ever more categories, established retailers have built up their own-label offers safe in the knowledge that the same item can’t be found, or price-compared, on Amazon or other sites by showrooming shoppers.
It’s not just retailers with a bricks-and-mortar presence that are reaping the benefits of focusing on own-brand or exclusive relationships with third-party brands.
In its first-half results today, Asos reported that own-brand accounted for 39% of sales.
Add in exclusive collaborations with external partners and between 55% and 60% of what it sells is only available to customers of its websites. As Asos points out, that provides “an additional important point of differentiation”.
The importance of a robust own-brand assortment was also evident in Tesco’s full-year figures. More than half – 51% – of food sold at its supermarkets was Tesco own brand.
Like-for-like sales of the grocer’s own-brand ranges were up 4.2% as it continued to work its way through a relaunch that will ultimately encompass 10,000 products.
Exclusive partnerships such as the Wicked Kitchen range of vegan dishes, are “experiencing strong repeat rate purchasing”.
And in the hard-fought, and for some retailers hard-pressed, clothing category, Tesco notched up 2.6% like-for-like growth, “reflecting the strength of the F&F brand and quality of our range”.
That word, quality, is surely at the heart of successful own-brand, no matter at what price point – the own-label success of value specialists such as Aldi in food and Primark in fashion prove that there is more to their appeal than their prices.
And the decisions by department store groups Debenhams and House of Fraser to trim their stables of house brands show that a brand has to live up to its promise – simply sticking a name on a label will not wash with shoppers who want to see genuine brand attributes in evidence.
Quality also matters when third-party brands choose who to team up with for exclusives – they want quality business partners.
In the case of Asos what they see is what they get – an etailer in tune with its customer base and at the top of its technological game.
The attractions of number one grocer Tesco as a partner are obvious.
But it’s a testament to Tesco’s reinvigoration and openness to change that emerging businesses such as Wicked Healthy, which is behind the Wicked Kitchen range and seems to have an ‘alternative’ ethos more in common with companies such as Brew Dog than ‘traditional’ companies, has linked up with it.
Own brand and exclusives may not be new retail ideas, but today’s results show that their appeal, when well executed, is undiminished.