Final answer:
Retailers view private label brands as leading brands that boost store traffic and reinforce the retailer's brand power. These brands contribute to the store's strong market presence and are positioned as high-quality, exclusive alternatives to national brands. Establishing a reliable reputation is crucial for this strategy, making private labels a significant asset to retailers.
Step-by-step explanation:
Today, retailers often view private label brands as leading brands that serve as a destination draw. This perspective has evolved significantly from past views where private label brands were considered secondary options to national brands. The change in perception can be attributed to the value that a well-respected brand name carries, which has been carefully built up over many years.
A common strategy for large retailers is to establish their private labels as exclusive and attractive options that can only be found at their stores. These brands are typically positioned as high-quality alternatives to national brands. With widespread advertising and the cultivation of a loyal customer base, private labels can achieve a strong market presence. Retailers with private labels now strive for economies of scale and aim to establish a good reputation that encourages repeat customers and word-of-mouth recommendations.
Additionally, particularly with the growth of department stores and a more standardized approach to consumerism, consumers often seek dependable and consistent products that come from brands with a known reputation. Thus, rather than being considered as lower margin offerings or 'throwaway brands,' private labels are leveraged to drive customer traffic and enhance the brand power of the retailer itself.