Case Study: Consumer's Perception towards Private Label Brands in Retail Stores

AbstractThe retail scene is feeing a change in the increase of private label brands in apparel segment. Many of the retailers are increasing the % of private label brands in their product portfolio as store brands which enhance the store image. It is gaining importance in the various retail stores across the country. The consumers too prefer private label brands because of relatively low price compared to national brands. This study is to understand the consumer's perception towards private label brands of retail stores by reviewing the related literature and the pilot study pursued in Bangalore city. It helps us to understand the rudimentary aspects of consumer buying behaviour towards private label brands with special emphasis on apparel product.Keywords: Private label Apparel, Retail, Private label brands, Consumer Preferences.IntroductionQuick understanding about Private label brands: Private label products are commonly referred to as name brand, store brand or own label, retailer's brand, private labels etc. These brands are owned by the retailer rather than the producer or manufacturer. Private label products are found in all food and grocery categories. Private label brands existed in generics and gradually expanded to various product categories. During 1990's India had not viewed Private label brands as an important entity because the Indian retail industry at that time was still in nascent stage. Moreover, retailing in India was completely unorganized because of dominance of mom and pop stores. Gradually, the retail took shape in the form of organized retailing; at the same time Private label brands came into being. In early 1990's, Shoppers stop pioneered the concept of PLBS. It had launched 'STOP' brand which is Shoppers Stop brand. Similarly, 'Westside' brand from Westside retailer came from Tata Group.With the increasing growth of the organized retail sector, private labels too are accepted by the retail market. The very reason behind this is that from economic angle, the recession has significantly given a thrust favouring private label brands. It is evident from the major retailers like Future Group, Shopper's Stop, Westside, Aditya Birla group etc. Offering Merchandise mix has given rise to competition in retail market and the future is bright for Private label brands. We can say that organized retailers can offer various merchandise in Private label brands.Consumers prefer to buy private label products mainly due to their low price and prefer to buy products from large chain of retailers which also offer a wide variety of private label products with better quality. Consumers in India prefer private labels over national brands due to availability and price benefits in the product category. There is a substantial growth in the private labels as retailers are concerned about their store and day by day curiosity among consumers is increasing which is leading to private label brands in categories like apparel, accessories etc.According to the Market Research Agency, Technopak's report 2012 on Private Label 2012 indicates that food and grocery segment are key drivers for Private label brands accounting for 20-25% and at times, 40% of all categories in Private Labels. Margins in private labels in staples like sugar, groceries can range between 15-25%.Looking into the trends of private label brands in Indian retailing, it seems that Private label brands are a win-win situation for retailers and customers in the current retail scenario. Eventually, the profitability is increased followed by Store loyalty to the retailer. From economic point of view, retailers can sustain in business during market slump as their products can be offered at lesser price (during recession). There is nothing wrong to say that Private label brands act as shield to retailer.Definitions of Private label brands: The study uses the various definitions given below:Private label brands (PLB) refer to the brands that are owned and sold by a retailer in its specific chain of stores. …