The Rise of the Private Label and How Brands Can Fight Back

Discount fatigue is real. Shoppers are value-hungry, retailers are margin-obsessed, and big FMCGs are caught in an endless cycle of discounts that erode brand value, visibility, and long-term viability. While price-cuts still have their place within the marketing calendar, relying on them as the default strategy is a risky bet - especially when private label is winning.

Private-label products have evolved far beyond “budget” positioning. They’re now premium, purposeful, and increasingly preferred. In Australia, private label makes up around 18% of FMCG market share and in some categories like meat, bakery and produce, share exceeds 80%. Across APAC, 75% of consumers say private labels are good alternatives to name brands, and over half now say they’re more likely than ever to choose them. A clear signal of growing desire for private label among value-conscious shoppers.

 

For brand marketers, the challenge has shifted. This isn’t just about who can shout the loudest on shelf or slash the deepest at checkout. This is about who can create real value in a way that shoppers remember and retailers support. And it starts by expanding the toolkit beyond just pricing - and recognising that value-add can be just as powerful, if not more, than money off.

It’s easy to see why discounts are so widely used. They’re easy to plan, simple to execute, and they do get sales results, at least in the short term. But under the surface, there are big issues:

• 37% of FMCG sales in APAC were products sold on promotion, mostly on a discount
• Nearly half of those promotions are loss-making
• Brands relying on these generic promotions have a lower likelihood of outperforming the competition
• Over time, continuous discounts erode customer trust, diminish brand equity, and create unsustainable pricing expectations

It’s no surprise that Marketing leaders are under pressure. On one side, retailers demand price support. On the other, procurement teams are watching ROI like hawks. And in between, shoppers are switching at speed, loyalty is waning, and your margin is disappearing.

What makes private label such a growing threat isn’t just affordability. It’s the growing perception of relevance and quality. Retailers back their own brands with priority placement and aggressive pricing. In the store, that means your brand is fighting for space against a better-supported rival. Online, it means your product might not even surface in the top search results.

And with up to 85% of purchases decided in-store, often in under 20 seconds, visibility is everything.

FMCG brand managers and shopper marketers need standout strategies to influence that moment of choice. Not deeper discounts, but with added-value that supports the brand’s values and connects with consumer passions and needs.

Great value matters more than price. It’s a subtle but important difference: promotions work more effectively when value is added to a product, rather than a few cents taken off the price. More and more, value is being defined by consumers as ‘what’s in it for me’, not just how much it costs at checkout.

Imagine if there was a viable alternative to discounts that was both affordable and proven to deliver results - one that could tell your brand story, differentiate your promotions in a sea of lookalikes, and deliver greater perceived value to shoppers and better ROI to your business.

That alternative already exists.

It’s called experience-led value.

At its core, experience-led value acknowledges a simple truth: people don’t just buy with their heads and their wallets - they buy with their hearts. In fact, As Daniel Kahneman’s research shows, 90% of consumer decisions are emotional - yet most promotions are still rational (save $1, buy 2, get 1 free). What we feel, influences what we choose, how much we spend, and whether we come back.

Think about your last memorable purchase. Chances are, what made it memorable wasn’t the price, it was how it made you feel. That’s the opportunity brands are missing when they default to discounts.

And the numbers back it up:

Consumers don’t remember prices – they remember moments. Brands that invest in experience-led promotions aren’t just delivering a short-term perk, they’re building emotional equity.

These activations:

• Differentiate from private label by building emotional connection
• Justify premium pricing by communicating the brand story and benefits
• Increase basket size and opt-in engagement
• Capture first-party data from shoppers at point of sale

At a time when 54% of APAC consumers say they are likely to buy more private label products and 46% of brands are loss-making, experience-led incentives offer a smarter alternative: a value exchange that delivers a higher perceived reward for the shopper - often at a fraction of the cost of traditional money-off promotions.

And because every shopper receives something of genuine personal value, engagement and participation soars - and with it, data capture, brand recall, customer satisfaction, and repeat purchase.

Experiences don’t just drive volume; they shape perception. They make your brand feel more authentic, closer, and more meaningful. That’s the kind of value that private label products can’t replicate. And it’s the kind that builds real loyalty.

One of the most difficult dynamics in promotional planning? The retailer relationship.

Securing secondary space or off-shelf visibility isn’t just about who pays more. It’s about who brings something new to the table; a promotion that engages shoppers and drives conversion of course, but also one that increases the impact of the entire display - making it more likely to catch attention, drive impulse purchase, grow the category and justify prime retail positioning.

Experience-led promotions offer something traditional discounts rarely do: a campaign that adds more personalised value to the purchase without cutting into the total spend. In other words, consumers buy the same volume (or more), but the perceived reward is higher - keeping basket sizes (and value) intact and even encouraging repeat purchase behaviour to get more of the added value. When a promotion offers a strong consumer mechanic, one that’s easy to activate and impossible to ignore, it drives attention, action, and sell-out. That makes the retailer’s job easier as it moves volume and justifies visibility.

We get it. Moving away from discounts might feel unfamiliar or even risky; especially when they’re quick to deploy and proven to lift sales. But experience-led campaigns are no longer the complex, high-cost alternatives they once appeared to be. And marketers can no longer ignore the erosion of their margins and brand equity caused by repeat discounting.

In fact, with the right partner, brands can deliver high-perceived value rewards for a fraction of the cost of traditional discounts. These campaigns are built on a value exchange: the shopper receives a meaningful, memorable and free experience, and the brand maintains pricing integrity and equity, while boosting emotional engagement and basket value.

The key is who you partner with. A partner who can unlock this powerful solution for you and will take care of the heavy lifting - from campaign ideation and comms integration, to reward sourcing, tech, customer service, and reporting. That means no operational headaches, no delays, and no surprise costs.

Just a better way to drive results, without damaging your brand.

Private label isn’t slowing down. Retailers will continue to prioritise their own brands. Shoppers will continue to hunt for value. The difference? You have a choice in how you respond.

 

You can keep discounting, and watch your margin disappear. Or you can do the original job of marketing, by leveraging your brand, being unique, solving consumer needs and being more memorable – even when you are on promotion.