Private Brand Innovation: How to Optimize and Reduce the Cost of Market Research

Table of Contents

The world of market research has evolved significantly in recent years, and in this context, private label brands have emerged as key players in the distribution sector.

Globally, private brands represented 53.4% of the fast-moving consumer goods market at the end of 2024, with year-on-year growth of 4.3% in sales. The global private brand market is valued at over $500 billion, with expectations of sustained growth.

Focusing on Europe, the continent leads the private brands market, with an average penetration of 39.2%. The map shows that countries such as Switzerland or Spain even surpass this average:

In the past, private brand manufacturers had to invest significant time and money to obtain data and develop their products. To analyze the market, they sent teams to stores to conduct store checks and collect prices. This, in addition to being expensive, involved high operational costs. They also had to manually cross-reference large databases, a slow and error-prone process. If they wanted access to detailed market reports, the only option was to pay specialized agencies like Mintel, which represented a large financial outlay.

Today, in an increasingly dynamic and competitive environment, technology has changed the game. Manufacturers can now access precise real-time data with a much lower investment. These tools allow them to analyze trends, optimize strategies and make faster and more informed decisions to remain competitive.

In this article, we will explore in depth what private label brands are and how they impact the market. We will also analyze how the market and technologies are changing to conduct market research and better understand the environment in which private label brands operate.

Introduction: The Importance of Market Research for Private Brand Manufacturers

Currently, access to detailed information has become an essential resource for the business development of manufacturers. Market research is the process by which companies collect and analyze relevant data about their competitors, consumers and industry trends.

For private brand manufacturers, this analysis is vital for several reasons:

Adapting to product and assortment trends: Changes in consumer behaviour and market fluctuations require agile, data-driven responses to make innovation or retail pricing decisions.
Identifying opportunities: Thoroughly understanding how the market and assortments fluctuate in terms of formats, product types or their characteristics allows for the identification of market niches and innovation opportunities.
Optimizing resources: Implementing strategies based on market information avoids unnecessary investment. It also optimizes operational efficiency, not only improving the accuracy of decisions but also their agility. It also reduces costs on traditional tools.
Competitive advantage: In a saturated market, having technology to anticipate the market and competition can have a huge impact on sales, accelerating innovation cycles or securing better commercial terms, whether you’re a private label or a third-party manufacturer.

The integration of technological tools into the market research process has facilitated access to quality information for private brand manufacturers, optimizing their decision-making processes and strengthening their market position. But what exactly are private label brands? We answer this question below.

What Are Private Label Brands or Retailer Brands?

Definition and characteristics

Private label brands, also known as retailer brands, are products manufactured by a third party but marketed under the distributor’s or retailer’s brand. These brands are characterized by:

Competitive costs: Generally, private label products are priced lower than leading brands, making them attractive to consumers seeking quality at accessible prices.
Loyalty to the retailer’s brand: Being associated with large distribution chains generates trust and loyalty among consumers.
Personalization and differentiation: Although based on commonly manufactured products, retailers can personalize or differentiate them to meet the specific needs of their markets.
Flexibility in the offering: Manufacturers have the ability to adjust their products according to market demands, allowing for greater adaptability to changing trends, both in the product itself and in formats to compete more efficiently.

Types of private label brands

The market offers a wide variety of private label brands that adapt to different segments and needs. Among the most common types are:

Supermarket own brands: These have become a benchmark in sectors such as food, cleaning products and personal care. Some examples are:
- Hacendado (Mercadona): Food and beverages
- Carrefour Discount (Carrefour): Basic food and cleaning products.
- Aliada (El Corte Inglés): Food and household products.
Retailer brands in hypermarkets: These brands typically cover a wide range of products, from clothing to electronics. For example:
- Amazon Basics (Amazon): Electronics, accessories and home goods.
- Inextenso (Alcampo/Auchan): Clothing and fashion.
- Essential B (Fnac): Electronics and appliances.
Specialized private label brands: In sectors such as health, beauty or technology, private label brands have specialized to compete with leading brands by offering high-quality products at more accessible prices. Examples of these specialized private label brands:
- Kirkland Signature (Costco): Vitamins, supplements and premium foods.
- Bebé Due (Eroski): Baby products.

Each of these types responds to specific positioning and segmentation strategies. This allows distributors to offer alternatives that suit the preferences and budgets of different audiences.

Origins, evolution and relevance in today’s market

The origin of the term “private label” comes from the use of white packaging where the label indicated the product category (milk, flour, soap, etc.).

To trace its origins, we must look back to Germany during World War II. In the midst of a major economic crisis, consumers stopped buying popular manufacturer brands and started buying lower-priced products without a well-known logo.

Gradually, this trend spread to other countries, especially in the 1970s. Specifically, according to the agency Comunicare, in Spain, it was the low-cost supermarket chain Simago that brought this trend and began marketing this type of product in 1977.

The evolution of private label brands has been marked by consumer sophistication and technological advancement. In the past, private label products were perceived as lower-quality options. Today, many have managed to stand out for their quality and competitive development.

A notable example of this would be Deliplus, Mercadona’s personal care and cosmetics brand. In recent years, it has managed to position itself as a real alternative to name brands thanks to the quality of its products and innovative development. One of its most successful products is the Sisbela Anti-Wrinkle Cream, which went viral after it was discovered that it shares a composition with a luxury cream sold for over €80 in perfumeries, while the Deliplus version costs only €5.

The current relevance of private label brands lies in their ability to respond to an informed and demanding consumer who seeks high-level products at accessible prices without sacrificing innovation or design.

The Impact of Private Label Brands on the Market

Advantages for distributors

The rise of private label brands has represented a radical change in market dynamics, becoming a fundamental strategy for distributors. Among its main advantages are:

Greater control over the supply chain: By marketing private label products, distributors can better manage the production, logistics and quality of products.
Differentiation and customer loyalty: Offering exclusive and personalized products under their own brand allows distributors to create a unique identity and strengthen consumer loyalty.
Rapid adaptation to trends: Technological tools allow for real-time analysis of competitor or manufacturer brand movements, enabling rapid adjustments to product offerings.

Challenges for name brand manufacturers

The rise of private label brands has also presented significant challenges for name brand manufacturers. These include:

Price competition: The ability of distributors to offer products at lower prices puts pressure on traditional manufacturers, forcing them to reduce their costs without compromising quality.
Innovation and differentiation: Manufacturers must constantly invest in research and development to maintain the relevance of their brands in a fiercely competitive market. A good example of this strategy is Danone. Instead of focusing only on direct competition in yoghurts, where pressure is high, the company has opted for premium products focused on health and nutrition. This decision has boosted its sales and improved its performance. With this approach, Danone not only diversifies its offering but also redefines its strategy to differentiate itself from private label brands and remain competitive.
Changing consumer behaviour: The growing consumer confidence in private label products has transformed market expectations, requiring a more focused and personalized marketing strategy.

In Spain, several manufacturer associations have opened a debate, accusing private label brands of unfair competition. This is because some large supermarket chains have removed manufacturer products from their shelves, ceasing to offer them.

Faced with this situation, name brand manufacturers have no choice but to adapt, with innovative and flexible strategies. This will allow them to maintain their market presence, differentiating themselves through quality, consumer trust and the pursuit of new distribution channels.

Market Research Techniques Used by Manufacturers

To keep up with market demands and overcome current challenges, private brand manufacturers are adopting various market research techniques driven by advanced technological tools. Some of these techniques are:

1. Data analysis

The use of Big Data allows companies to process large volumes of information from various sources, such as Mintel, NIQ or Statista.

This information is analyzed using various data analysis tools to identify consumption patterns, trends or customer behaviors. By better understanding how the market works, manufacturers can adjust their product offerings and develop customized strategies.

2. Predictive analytics tools

Predictive analytics uses artificial intelligence and machine learning algorithms to anticipate future trends and behaviors. This technology helps predict which products will be in greater demand and when peaks of interest will occur. With this data, manufacturers can plan their inventories, optimize marketing campaigns and improve strategic decision-making.

3. Competitor analysis

Using digital benchmarking tools facilitates the comparison of products, marketing strategies and competitor prices. We are at a unique historical moment for obtaining, through digital channels, the best information from the global market. This is because the parallelism between the online and offline worlds is increasing.

Competitor analysis will allow private brand manufacturers to identify strengths and weaknesses in their own offerings. It will also uncover opportunities for differentiation.

How Private Brand Manufacturers use flipflow to Conduct Market Research

As we have seen, market research techniques play a fundamental role in the strategy of private brand manufacturers. However, the key to effective research lies in the ability to access precise data in real time. In this context, flipflow has become an essential tool for these manufacturers, allowing them to obtain detailed information about the market and make informed strategic decisions.

Real-time monitoring of categories and markets

Retailer brands use flipflow to analyze their target categories in different retailers and countries. Manufacturers of various product verticals, such as Grupo Ubesol, Importaco or AMC, can closely follow market evolution at different points of sale, regions and even countries and adapt their strategy according to the data obtained in real time and organized as they need for their business logic.

Thanks to the constant visibility offered by the platform, manufacturers can observe in detail the strategies of distributors or private label brands that they consider benchmarks. In this way, they can detect the launch of new products, changes in active assortments and variations in prices or formats. They can even automatically calculate prices per unit, gram or liter.

In addition, the platform provides standardized product images, descriptions and other attributes. Using this information, manufacturers can analyze the composition and differentiation of products in the market, as well as their prices and their positioning on shelves.

Competitive analysis of retailer brands

Beyond studying name brands, private label manufacturers use our tool to conduct in-depth competitive analysis of other private label brands. With the platform, they can examine formats, recent launches, market trends and positioning strategies.

A key aspect is the comparison of prices, promotions and product segmentation. This allows these manufacturers to adjust their strategy based on market behavior. Flipflow’s ability to segment products by attributes through its cutting-edge AI-based technology facilitates detailed analysis and agile, informed decision-making.

Identifying key markets and optimizing resources

Another fundamental benefit of flipflow is the ability to detect where the most relevant launches are occurring within each category. For example, manufacturers can focus their attention on markets like Mercadona in Valencia, Caprabo in the Basque Country and even Walmart in the US, where important new products are often introduced.

Manufacturers such as Maverick, focused on the domestic market, and Importaco, with an international presence, can use this information to expand strategically and obtain data from any market in the world without incurring high costs. They manage to reduce the need to send Point of Sale Manager teams to different territories, thus optimizing resources and efforts.

The Crucial Role of Market Research with flipflow in the Success of Private Label Brands

Market research has become a crucial element in the success of private label manufacturers. The ability to analyze and anticipate market trends, thanks to advanced technological tools, allows these manufacturers to position themselves competitively and respond agilely to consumer demands. In this context, we offer a significant competitive advantage. We provide more detailed, faster and more economical information than traditional reports purchased by manufacturers, such as those from Nielsen. Our tool can not only completely replace these traditional information sources. It can also be used partially, integrating into existing research processes. Even in a complementary way, by providing additional data and real-time analysis that enrich the purchased reports.

The future of market research is geared towards greater integration of AI, predictive analysis and digitalization. This promises to radically transform how companies understand and relate to their markets. For private label manufacturers, this evolution represents a unique opportunity. It allows them to consolidate their position, optimize their processes and offer products and services. All this, responding precisely to the needs of an increasingly demanding consumer. Will private label brands continue to ride this wave of innovation to gain further ground? What strategies will name brands adopt to remain competitive in this new scenario?

It will be interesting to see how each market player responds to these changes in the coming years, and at flipflow we will be here to offer the necessary support with our advanced market research tools.