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Big data systems enhance retailers’ predictive capabilities, providing them with a significant advantage in understanding end-market demand, increasing the competitiveness of retailers’ private labels, and significantly impacting manufacturers’ sales strategies. This paper applies dynamic game-theoretic models to explore the interaction between the retailer’s information-sharing strategies and the manufacturer’s sales mode selections when the retailer introduces a private label. Through backward induction, the equilibrium strategies of both parties can be derived. The results show that the manufacturer consistently benefits from information-sharing under both sales modes, potentially achieving a win-win outcome under the agency selling mode. Improving the retailer’s information forecast accuracy encourages a shift from reselling to agency selling mode. The retailer’s lower information forecast accuracy or the smaller demand variance offers no first-mover advantage to either the manufacturer or the retailer. Additionally, an Information Compensation Mechanism (ICM) for revenue-sharing is proposed, and contract conditions across different sales modes are discussed.

To study consumer brand misinformation, we run in-store blind taste tests with a retailer’s private label food brands and the leading national brand counterparts in three large consumer packaged goods categories. Subjects self-report very high expectations about the quality of the private labels relative to national brands. However, they predict a relatively low probability of choosing them in a blind taste test. An overwhelming majority systematically choose the private label in the blinded test. Using program evaluation methods, we find that the causal effect of this intervention on treated consumers increases their market share for the tested private label product by 15 share points during the week after the intervention, on top of a base share of 8 share points. However, the effect diminishes to 8 share points during the second to fourth weeks after the test and to 2 share points during the second to fifth months after the test. Using a structural model of demand that controls for the self-selected participation and allows for heterogeneous treatment effects, we show that these effects survive controls for point-of-purchase prices, purchase incidence, and the feedback effects of brand loyalty. We also find that the intervention increases the preference for the private label brands, and that it decreases the preference for the national brands, relative to the outside good. Interpreting the intervention as an information treatment about the product, we find evidence consistent with an economically large informational barrier on demand for the private label product relative to an established national brand.

We measure the causal effects of income and wealth on the demand for private-label products. Prior research suggests that these effects are large and, in particular, that private-label demand rises during recessions. Our empirical analysis is based on a comprehensive household-level transactions database matched with price information from store-level scanner data and wealth data based on local house value indices. The Great Recession provides a key source of the variation in our data, showing a large and geographically diverse impact on household incomes over time. We estimate income and wealth effects using “within” variation of income, at the household level, and wealth, at the zip code level. Our estimates can be interpreted as income and wealth effects consistent with a consumer demand model based on utility maximization. We establish a precisely measured negative effect of income on private-label shares. The effect of wealth is negative but not precisely measured. However, the estimated effect sizes are small, by contrast to prior academic work and industry views. An examination of the possible supply-side response to the recession shows only small changes in the relative price of national-brand and private-label products. Our estimates also reveal a large positive trend in private-label shares that predates the Great Recession. We examine some possible factors underlying this trend, but find no evidence that it is systematically related to specific private-label quality tiers or to the overall rate of private-label versus national-brand product introductions. Data and the online appendix are available at https://doi.org/10.1287/mksc.2017.1047 .

This study investigates the decision process of own-brand intrusion by contract manufacturers and their selection of invasion sales modes under the consideration of service quality disparities between brand manufacturers and contract manufacturers. Specifically, the study constructs a three-tier supply chain system comprising a brand manufacturer, a contract manufacturer, and an e-commerce platform. The equilibrium profits under different sales mode combinations are determined by using reverse induction methodology, and the optimal sales mode combinations are analyzed and compared. The study reveals that the decision process of contract manufacturers’ own-brand invasion depends on the potential market demand. Furthermore, when brand manufacturers adopt the reselling mode, the service quality level does not affect the decision process of invasion sales modes. However, when brand manufacturers adopt the agency mode, contract manufacturers with low service quality levels are more suitable for invasion through the agency mode, whereas contract manufacturers with high service quality levels are better suited for invasion through the reselling mode. Additionally, for the equilibrium sales mode combination among members of the supply chain, it is observed that with lower commission rates, both brand manufacturers and contract manufacturers choose the agency mode, while with higher commission rates, both choose the reselling mode. When commission rates are moderate, brand manufacturers prefer the agency mode, whereas contract manufacturers prefer the reselling mode.

Private brands are currently relatively well accepted by consumers and are generally considered to be of high quality, yet they face various challenges that can threaten their sustainability. This has been confirmed by several authors looking at consumer perceptions of private labels across different countries. The aim of the study was to assess consumers' attitudes and relationships towards private brands and to identify factors that may influence their purchasing decisions. To achieve the objectives, a questionnaire survey was used, where the research sample consisted of 239 people shopping in retail food stores in the Czech Republic, of different gender, age, level of education, and monthly income. It was found that consumers perceive private brands positively in most cases. Using the Friedman test, it was found that consumers care most about low price and quality when buying private brands, while they attach the least importance to the appearance of the packaging. Based on the decision tree, it was revealed that private brands are mostly purchased by women who are employed, students or those on maternity leave, those who have lower incomes and who are under 25 years of age. The results of the logistic regression confirmed that lower price and reasonable quality increase the chance of buying private labels. These findings, such as consumer perception of private brands, and frequency of purchase, are very important to determine appropriate marketing strategy. Based on an effective strategy, retailers can then aim to increase the number of products sold and customer loyalty.

Income inequality is a growing social issue in the United States, yet little research has examined whether and how it affects consumers’ everyday purchasing decisions. To address this gap, we analyze the role of income inequality in shopper behavior, namely grocery shoppers’ preference for private labels versus national brands. Since income inequality increases people’s interest in brands that are associated with higher status than others, we predict that shoppers facing higher inequality have a stronger preference for national brands rather than private labels. The results support our thesis: Americans living in places with high versus low income inequality include fewer private label items in their shopping baskets and are willing to pay a higher premium for national brands. Further, consistent with social comparison theory, we find that the link between income inequality and preference for private labels versus national brands is stronger when people have higher social comparison orientation.

We aimed to compare New Zealand private label (PL) and branded label (BL) packaged food products in relation to their current (2019) healthiness (sodium and sugar contents, and estimated Health Star Rating (HSR) score), display of the voluntary HSR nutrition label on the package, and price. Healthiness and HSR display of products were also explored over time (2015 to 2019). Data were obtained from Nutritrack, a brand-specific food composition database. Means and proportions were compared using Student t-tests and Pearson chi-square tests, respectively. Changes over time were assessed using linear regression and chi-square tests for trends (Mantel–Haenzel tests). Altogether, 4266 PL and 19,318 BL products across 21 food categories were included. Overall, PL products in 2019 had a significantly lower mean sodium content and price, a higher proportion of products with estimated HSR ≥ 3.5/5 (48.9% vs. 38.5%) and were more likely to display the HSR on the pack compared with BL products (92.4% vs. 17.2%, respectively). However, for most food categories, no significant difference was found in mean sodium or sugar content between PL and BL products. In the period 2015–2019, there were no consistent changes in estimated HSR score, sodium or sugar contents of PL or BL products, but there was an increase in the proportion of both PL and BL products displaying HSR labels. In most food categories, there were PL options available which were similar in nutritional composition, more likely to be labelled with the HSR, and lower in cost than their branded counterparts.

Motivated by the observed private-label products entering the market, this paper studies the encroachment of private-label manufacturers considering the quality effort and the platform’s e-word-of-mouth. We analytically derive that customer brand recognition ability and the e-word-of-mouth (e-WOM) gap of different platforms have an impact on the private-label manufacturer’s quality effort and price. Moreover, the higher the willingness to pay for the quality effort cost, the more effective the private-label encroaches market through platform channel. In addition, we find the weaker the customer’s brand recognition ability, the higher the profit of the platform with good e-WOM in the face of the encroachment of private label through the platform with good e-WOM. However, in the face of the encroachment of private label through bad e-WOM and direct channel, the profit of platform with good e-WOM is lower. The e-WOM gap of the platform has a feeble impact on the profit of the brand manufacturer and platform. Furthermore, we find when customer brand recognition ability is high, the optimal encroachment channel for private label manufacturers is the platform with good e-WOM; when customer brand recognition ability is moderate, the optimal encroachment channel for private label manufacturers is the platform with bad e-WOM; when customer brand recognition ability is high, the optimal encroachment channel for private label manufacturers is direct channel.