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How Private Label Is Gaining E-Commerce Traction

Store brands are breaking out of brick-and-mortar
Photograph: Shutterstock

While private label has traditionally been a brick-and-mortar phenomenon, the category is gaining online sales, according to a recent data analysis from Nielsen. 

Consumer packaged goods private label now accounts for 3% of online dollar sales, compared to 1.3% two years ago, with household and baby care products seeing particular success.

However, categories such as private label health and beauty register at barely even a percentage point of online dollar sales but have 17.9% of in-store dollar sales.  

While traditional brands are still winning e-commerce due to their familiarity, more and more retailers are heavily investing in their private label offerings and, as the report puts it, "balancing name cache with value." 

Walmart, for example, has taken the lead with a 48% share of CPG e-commerce private label dollar sales, up from 27% share two years ago. 

"Private label has not reached a plateau in physical stores, and especially not online," the report noted. "As retailers and e-commerce providers increasingly take control of supply chains and launch their own 'brands,' the friend-and-foe dynamic between retailers and brands will continue to get more complex." 

The report predicts that brands will find themselves "in a tight spot between niche disruptors and private label, and only the most innovative will win the omnichannel battles ahead."

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