Betting exclusively by private labels: could it have negative consequences for retailers?

Abstract

PurposeThe authors analyze the relationship between different consumer attitudinal variables and a number of variables related to consumer perception of the store and purchasing behavior, in assortments composed exclusively of private labels (PLs).Design/methodology/approachThe authors developed an experiment based on an online survey to test the hypotheses formulated. The model’s causal relationships are established using structural equations.FindingsThe image of stores that only offer their own brand is mainly configured by price consciousness and the attitude toward the private label. The private label purchase intention is strongly influenced by the store image and a favorable attitude toward the brand, and loyalty strategies should be aimed at securing a clear perception of providing real value.Practical implicationsFor retailers who only offer their own brands, an assortment with price-competitive PLs is key to the strategy of differentiating them from other retailers. It is reasonable to assume that, if retailers have a favorable image, customers transfer this brand value to their PLs and trust them. Customer loyalty strategies of these retailers should be aimed at ensuring that consumers clearly perceive that their assortment provides real value and that, although it is limited in terms of number of brands, it can meet all their needs.Originality/valueThis research represents a significant contribution to brand management literature because, includes, together with loyalty to the store, its image and the PL purchase intention as consumer response variables. Another differentiating feature is the methodology used. Estimation of the structural equation model permits the simultaneous estimation of the relationships between the variables.