Private label has the home ground advantage, the digital shelf changes the game

Private label is no longer the quiet alternative on the bottom shelf. In Australia, it is one of the most powerful growth engines in retail.

According to Mi3, private label accounted for 36% of CPG and FMCG sales, growing 4.8% year-on-year to reach $46 billion in annual sales (courtesy of data from Circana in May 2025) and almost 95% of Australian shoppers say they are open to buying own-brand products. Retailers see these ranges not just as margin drivers, but as strategic assets that build trust, loyalty, and most importantly, differentiation in an increasingly competitive marketplace.

And they are backing that belief with serious investment.

Mi3 data revealed Coles’ premium Coles Finest range is growing at more than double the rate of total in-store sales. Whilst retailers like Adore Beauty have snapped up iKOU for $25 million as part of a private label strategy to build exclusivity and create stronger reasons for shoppers to choose Adore in the fiercely competitive beauty landscape. This forms part of a broader ambition to drive 8 to 10 per cent of total revenue from own brands in the near term.

But it isn’t just a grocery and beauty story. Private label is expanding across apparel, homewares, pet care, and consumer electronics. What was once about value is now about competitive advantage, quality, design, and brand in its own right.

For consumer brands, the message is clear. The retailer is no longer just your customer. In many categories, they are your fastest-growing competitor.

On the physical shelf, private label has always had the advantage. Control of space. Control of price. Control of promotion. Online, that advantage still exists, but many retailers are less mature in how they leverage the digital shelf to truly maximise the growth of their private label ranges.

That gap creates a powerful opportunity for consumer brands. An opportunity to use the digital shelf to build competitive advantage, defend share, and push back against the onslaught of private label growth. A way to win.

Turning up the heat on private label brands with winning strategies.

There’s no shortage of tactics in play, but here are 3 strategies that challenge the status quo and give consumer brands a real path to claw back share.

#1 – Turn brand strength into digital credibility

For decades, consumer brands have won on the power of their brand. On the physical shelf, recognition and trust did the heavy lifting.

On the digital shelf, that brand promise is increasingly shaped by credibility cues - ratings, reviews, awards, and social proof. These signals now sit alongside the logo as proof of quality and value.

This is where private label is often vulnerable.

While retailers invest heavily in price and range, many are not yet building deep, high-quality banks of ratings and reviews for their own brands. That creates a window for consumer brands that are willing to nurture their communities and actively solicit feedback from loyal shoppers.

Brands that do this well don’t just protect trust. They amplify it.

And the impact goes beyond the retailer site. As AI-driven discovery through tools like Perplexity and conversational search becomes more influential, these same credibility signals increasingly shape visibility of these products across chat interfaces where research increasingly starts.

The brands with the strongest digital reputation won’t just win clicks. They’ll win the next layer of discovery.

#2 – Availability all day, every day

On retailer sites, private label has a built-in edge. When shoppers sort by “price: lowest to highest”, own brand products often rise straight to the top. That means the battle for brands is not just to be chosen - it’s to be present at the moment of choice.

Because if you’re not there, you’re not in the basket.

Out-of-stocks are one of the fastest ways to hand share to private label. When a brand disappears, shoppers don’t just abandon the mission. They look for alternatives. And retailers are more than ready to help, surfacing substitute recommendations that increasingly drive trial of their own brands.

That’s why availability can’t be treated as a narrow supply chain metric.

On the digital shelf, availability means more than a SKU showing as “in stock”.

It means:

• Being present across fulfilment methods.

• Staying in the basket through the full path to checkout.

• And critically, being visible as the first alternative when a shopper hits an out-of-stock or substitution moment.

Retailers like Coles now actively surface alternatives directly on the PDP. Those placements matter. They are not neutral. They shape what gets tried next.

For consumer brands, this creates a clear imperative: collaborate with retailers to ensure your products are the alternatives shoppers see first.

That means aligning on:

• Substitute logic and rules.

• Range architecture that makes sense as a swap.

• And ensuring hero SKUs are positioned as the most relevant next choice.

In a world where private label is always waiting in the wings, brands that win are the ones that make sure they are always in the consideration set. All day, every day.

#3 – Turn the digital shelf into a brand stage, not just a checkout

Private label is built to win transactions. Sharp price. Clear value. Quick decision.

Brands should be playing a different game.

The digital shelf shouldn’t be treated as just another place to convert. It’s one of the few moments where brands still have the chance to tell stories, show personality, and immerse shoppers in what makes them different at the exact point of choice.

Too often, brand PDPs look like data sheets. Images of the pack. A block of text. A price. Add to cart.

But the brands that outperform use the digital shelf to:

• Show their product in use, not just on pack.

• Bring to life the problem they solve and the outcome they deliver.

• Express their values, provenance, and purpose.

• And help shoppers imagine the product in their own lives.

Through rich imagery, video, A+ content, and modular storytelling, the shelf becomes more than a list. It becomes an experience.

This is where brands can do what private label struggles to replicate at scale: build emotion, connection, and meaning.

And it matters more than ever. As shoppers increasingly rely on AI and conversational discovery to summarise options, the brands with the richest digital storytelling footprint are the ones most likely to be surfaced, described, and recommended with depth - not just price.

The opportunity is clear.

Don’t let the digital shelf reduce your brand to a transaction. Use it to create immersion. And give shoppers a reason to choose you, even when a cheaper option sits beside you.

Private label wins because retailers control the shelf. The space. The algorithms. The economics.

So one of the smartest ways to fight back is simple: don’t rely on their shelf alone.

Brands that diversify where and how shoppers discover, engage, and buy reduce their dependence on the very channels where private label has a structural advantage. This isn’t about abandoning retailers. It’s about balancing power.

Winning brands are building:

• Direct-to-consumer experiences that deepen relationships and capture first-party data.

• Social and content-led commerce that inspires before the shopper ever hits a retailer site.

• Marketplaces and emerging channels that expand reach beyond the major duopoly.

• And ecosystems of owned audiences they can activate again and again.

In doing so, they’re playing the same game retailers play with private label: owning the relationship, the data, and the rules of engagement. The upside is powerful.

Brands that build demand upstream:

• Arrive at the retailer shelf with preference already formed.

• Drive shoppers to search for them by name, not just by category.

• And become harder to displace with a cheaper alternative.

In a private label world, dependence is risk. Diversification is defence. And done well, it becomes a growth engine.

But diversification only works when it’s grounded in real audience need. Just because you can build a channel doesn’t mean you should. DTC models, for example, tend to perform well for categories offering bulk buying, regular replenishment or offer exclusivity for example. Marketplaces in Australia are deeply penetrated in some categories, but barely relevant in others e.g. baby and cleaning but not necessarily vitamins.

The brands that win won’t diversify on gut feel. They’ll diversify where it makes sense for their shoppers, where they can drive scale and it's profitable - and where it strengthens their hand on the shelf that still matters most.

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Arktic Fox partners with an array of consumer brands to turn the digital shelf into a growth lever - lifting credibility, availability, and conversion in categories under private label pressure. Find out how we can help.