In the past, I have talked about the impact private labels can have for retailers and on national brands. Something I hadn't considered is a concept that I most enjoy about private labels. Some stores such as Target have taken private labels to a new level. Target has a value private label brand, but it also carries Archer Farms, an upscale private label that appeals to a separate demographic from value private label brands. The effect of these independently branded private labels has been powerful for retailers, but at the same time not stealing sales from the national brands. However, in a poor economy, private label sales go up. Retailers allow value private labels to claim shelf space from national brands while using the national brand identity (think store branded mac and cheese). When the economy rebounds, consumers return to their favored national brands and private label sales slip. If a retailer has aggravated a national brand though private label practices, what is to keep the national brands from fighting back with their pricing structure, or by simply not working with retailers who stole business away from them in the past?

One way protect the national and private labels is to create store brands with character. As Terri Goldstein suggests, a store brand with its own experience, separate from its national brand competitors allows everyone to win in the end. The idea of using a store brand in this way -- as more than just a value branded version of a national brand -- is something that is done well at stores like Trader Joe's and Target. Consumers seek out the store brands at these stores as readily as they do the national brands. And, at the end of the day, if you are the only store that carries Archer Farms trail mix, and that trail mix is the best trail mix in the market, then guess where consumers will go to get it? In end, the retailer is able to benefit from its unique product line and the national brands at the same time, and for years to come.

This concept is definitely something retailers should be reconciling these days, and I am sure we will see more examples of these issues impacting the marketplace in the next few years to come.