Private label products succeeded in gaining market share during the early 1990s and 2000s recessions that followed the bust and 9/11. During inflation, customers flock to private label products to save money. In the early 1990s, consumer demand was low, and private label brand names had an advantage over their competitors in the price-sensitive market. Walmart was among the first retailers to use private label brands as early as 1989. In the mid and late 2000s, private label brands became even more successful because of increased consumer demand for affordable, quality products. In response to this increased demand, retailers began to use larger quantities of private label brands to increase their profit margins. This also led to an increase in the number of different lines offered by retailers and manufacturers.

Retail stores also use private labels as complementary strategies to premium brands. They are usually positioned as value brands that compete with the more premium pricing of their respective competitors. Labels such as Wal-Mart’s Great Value, Costco’s Kirkland Signature, and Kroger’s Private Selection have been used effectively in this way.

Gen Z however is driving value-driven purchases and it’s different from previous generations. Gen Z is willing to spend money on products and experiences that are sustainable, convenient, and nostalgic because they want a sense of belonging in what they consume. This generation also values authenticity. They like knowing where their product comes from, how it’s produced, and more importantly, how it was made by the person who created it.

Private labels lack marketing money, which means that they have no brand image or limited visibility on social media or television. Gen Z consumers are not too keen on these products, which are often not even recognizable as being a brand. Others argue that private labels are a marketing tool to make consumers think they are getting a good deal, but in reality, the product may not be all that great.

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