TL;DR: They acquire actionable customer insight, develop a memorable brand identity, and map territories to delineate geographic areas for store locations so they don’t open stores close to existing ones. Mapping territories helps concentrate efforts in areas with high growth potential.
Unit sales of store brands were nominally even between 2022 and 2023, in contrast to which national brands shed 2.8% during this period. The share of store brand units was just over a fifth of the total (20.7%), up 0.5 points from 2022 and a historic record. Store brands’ dollar sale value increased by 4.7%, and national brands fared worse by 3.4%. The dollar share of store brands rose to 18.9%, up 0.2 points from 2022, another historic record.
These results seem to be part of a tendency, hopefully, a short-term one, for national brands, which continue to underperform private-label ones. From January to June 2024, total store brand sales amounted to $121 billion. Store brands hit new records in both dollar and unit share during this period, according to new sales data provided to the Private Label Manufacturers Association. As of June 16, 2024, the dollar market share was 20.4%, and the unit market share was 22.9%.
The solutions: customer insight, a memorable brand, and mapping territories
Some national brands may be struggling, and acquiring actionable customer insight is central to any strategy aimed at differentiation. This involves understanding preferences, behaviors, demographics, and unmet needs. Direct feedback mechanisms and sophisticated analytics tools can reveal valuable insight.
Another approach is to develop a memorable brand identity by synthesizing personality, tone, and visual elements to form a cohesive image grasping the brand’s essence. In a saturated market, effective positioning can ensure a national brand holds a distinct spot in the customer’s mind. Territory mapping allows brands to clearly delineate geographic areas for sales teams or store locations. This minimizes the risk of opening new outlets too close to existing ones, a practice that often brings about internal competition and lackluster sales. By visualizing market penetration and competitor activity, national brands can decide where to expand next. This strategic approach avoids markets with too intense competition, instead focusing on regions that promise healthy returns and sustainable growth.
A clear geographic view helps companies better allocate resources such as marketing budgets, staffing, and inventory. Mapping territories can help concentrate efforts in areas with the most growth potential rather than spreading resources too thinly across saturated regions.
Mapping territories also helps tailor marketing and sales strategies to specific regional characteristics. This localized approach helps avoid oversaturation and builds stronger relationships with consumers by addressing their unique needs and preferences.
FAQ
What is a saturated market?
In a saturated market, businesses compete for customers because there are more products than people to buy them. Market saturation tends to occur when several businesses in the same sector or industry fulfill a similar purpose.
What happens when a market gets oversaturated?
As businesses fight for a limited number of customers, conversion rates start dropping while customer acquisition costs begin to increase. Businesses often try to attract customers by engaging in “price wars.”
Can you establish a brand in a saturated market?
Businesses that deliver unique value can stand out in a saturated market. It starts with identifying an underserved demand or niche. You might offer superior customer service or excellent quality or adopt eco-friendly practices. Competitor research is key in a saturated market. For example, a business determines it’s not engaging with customers online effectively. Its research reveals that no competing brand is advertising on a popular local medium. It then launches a marketing campaign that involves creating engaging posts on that platform to attract new consumers.
