Walmart is a retail company that many people are familiar with. They operate everything from hypermarkets to grocery stores and discount department stores. While we’ve already touched base on Amazon private label, Home Depot private label, and Target private label brands, now it’s time to cover Walmart Private Label Brands.
Private labels aren’t new for Walmart. Back in 1983, Walmart launched its first private label brand, and it was for dog food. The brand was called Ol’ Roy and the marketing approach only grew from there. Starting with dog food, the company introduced private labels for clothing and more.
Over the years, Walmart has also started to explore a new niche market. These include customers with higher incomes and those who shop primarily online. The new brands they introduced include Bonobos, Moosejaw, Jet.com, and Modcloth.
Private Label Brands are Expected
Chances are that you’ve noticed you can’t buy certain brands anywhere else except for Walmart. Brands like George, Wonder Nation, Ditto for Time and Tru, and other brands are exclusively sold at Walmart stores. There are also non-apparel house brands that are sold at Walmart. These include groceries with the Great Value label, technology products under Onn, and wine under Winemakers Selection.
Overall, Walmart has a few dozen brands under its umbrella. As one of the largest retailer brands in the world, it’s no surprise that they place private label products next to national brands. Back in the day, stores' brands would always stand out as they were superior to private label brands. This is because private label goods were subpar quality. Now, they’re stepping up and investing more into their types of inventory and packaging to compete with their counterparts.
It takes a lot of resources to develop a private label brand selection like Walmart has. However, this doesn’t stop other retailers from doing it. Target has quite a bit of private labels including All in Motion and Cat & Jack. 10 of their private labels bring in more than $1 billion in sales each year. 4 of their brands produce more than $2 billion in yearly revenue. Bed Bath & Beyond recently showcased a new private label brand called Studio 3B for home decor.
Walmart has improved its efforts to get its private-label products up to par with Target and Bed Bath & Beyond. They launched the brand Free Assembly Kids as a move in the right direction. This effort could generate a bit of unexpected growth in sales.
Walmart Private Labels
Walmart doesn’t have the same approach as other big-box retailers when it comes to private brands. They double down on low prices, which is their core offering. This compares to focusing on creating name recognition and building new customer bases.
The white-labeled products at Walmart focus on keeping the value-oriented customers shopping in-store. Most of the non-Walmart brands that are found in-house are strategic investments. These include Jet.com, Bonobos, and Modcloth. The idea was to keep these brands separate from the private label brands. Walmart experiments a lot with its private labels to determine the best strategy.
The In-store Advantage
Retailers like Amazon continue to expand their fulfillment capabilities and this puts pressure on traditional retailers. Amazon Prime offers cheap and quick delivery options. This is what changed consumer behavior. Americans tend to expect fast and free delivery from most retailers nowadays.
However, Walmart has something that Amazon can’t easily provide. Walmart has physical stores, and they’re practically everywhere. The retail giant has focused on utilizing its real estate as a competitive advantage. Even though Amazon has recently opened up a few brick and mortar shop locations, they’re not as easily found as Walmart stores.
In-store pickup is also a staple. Walmart has redesigned the in-store experience for consumers. They did this in order to better accommodate those who purchase items online and go to pick them up in-store. Walmart also started offering free next-day shipping on certain products to consumers located within certain regions.
Brands From Walmart Private Labels
There are over 29,000 products under Walmart’s private label brands. They’re part of more than 315 brands in 20 categories. The Auto & Tires category has more than 5,000 products. More than 92% of the products in Auto & Tires are from the tire brand Douglas. Walmart also has close to 5,000 products in the Clothing, Shoes & Accessories category and Party & Occasions.
Walmart’s Home category has the largest number of private label brands. Following the Home category is Patio & Garden which consists of 49 brands. The Auto & Tires category has 39 brands. Party & Occasions only consists of 3 brands, but the total products are just under 5,000.
Low prices are part of what keeps consumers coming back to Walmart. About 41% of Walmart's sold products are priced under $10 and from two categories. These include Clothing, Shoes & Accessories and Party & Occasions.
27% of the products sold at Walmart are between $10 and $25. About 95% of the products found in the Clothing, Shoes & Accessories category are less than $25. When it comes to the Auto & Tires category, the items get a bit more expensive. 70% of the products are above $50.
Customer satisfaction is crucial for any company. Walmart Private Label Brands do well when it comes to customer satisfaction. More than 49% of the private brand products have a customer satisfaction rating between 3.5 and 4.5.
Products in the Auto & Tires category have the highest average rating which totals out to be about 4.6. These ratings show that consumers trust Walmart’s private labels just as much as some name brands.
When it comes to shipping, delivery, and pick-up options, efficiency is key. Walmart does its part by offering competitive options. They off free 2-day shipping for more than 8,000 products. Over 7,000 products have free shipping options.
Another advantage for Walmart when it comes to product fulfillment is their stores. They have more than 4,650 stores in 90% of the United States. Most of their products are available for either next-day delivery or free pickup. It’s what gives Walmart a competitive advantage over retailers like Amazon, Whole Foods, and more.
The Impact of Walmart Private Labels
Now that you know what is private label, you can understand its impact. While Amazon focuses on improving their private label brands in apparel, Walmart is focusing on the Auto & Tires category. 84% of Walmart’s consumers prefer to purchase their private label brand products. Only 27% of Amazon consumers purchase their private label brand products. Some companies also prefer to do private label dropshipping as a kitting technique.
In 2018, U.S. private label brand sales totaled out to be over $128.5 billion. This compares to only having 1.1% of sales growth of national brands. Retailers are consistently investing in innovative private brands in different categories. They’re also making sure to focus on quality. In 2019, surveys indicated that 40% of customers “always or frequently” purchase store brands. 25% of customers said they plan to purchase more private label brand products in the future.
At most retailers, the store brands aren’t seen as generic products that have subpar quality like they used to. 70% of shoppers believe that the quality of private label brands is just as good as the national brands. Retailers are focusing on their brand strategy with these private label brands. By doing so, these products are low-priced, high-quality, and ensure customer loyalty.
Walmart’s Growth Plan
Walmart Private Label Brands might not be as advanced as its competitors. However, it is presumed to grow. The retailer carries a lot of different products, and they need national brands to help grow their private label plan.
The potential of Walmart’s private label brands shouldn’t be underestimated. They recently started focusing on their private labels by launching new brands. These include Free Assembly and Free Assembly Kids.
Private label brands are a key part of Walmart’s growth plan and what’s to come from the retailer in the future.