Electrical retailers are being forced to invest heavily in private label and own brand ranges to retain their market share and margin against non-specialists, according to Verdict Research.

The independent retail analyst found that many specialist electrical retailers are using private label and own brands to remain competitive against non-specialists, such as supermarkets and online retailers.

“Specialist electrical retailers have suffered over the last few years as increasingly cash strapped consumers have shopped at supermarkets and online only retailers who are able to buy in bigger quantities and offer lower prices,” Natalia Grabov, Verdict analyst, said.   

“In a bid to compete, margins have been squeezed, and specialist retailers have been left searching for ways to both differentiate their products and to encourage customer loyalty.”

According to Verdict Research, launching private labels will allow specialist retailers to take greater ownership of the product process, easing the pressure on margins and putting greater emphasis on value for money.

At the same time, online non-specialists such as Amazon has also launched private label ranges too.

“Importantly to continue to win market share back from the non specialists, retailers will need to continue to add value by offering extras.  For example non specialists often aren’t able to offer add on’s like offering free repair services, and extended warranties,” Graboy said.
“Over the next few years we will see far stronger private label electrical ranges in specialist retailers and those who invest most heavily in terms of innovation and packaging will reap the rewards.”