CPG industry challenges

CPG industry challenges: Competing with white label brands

White label brands represent one of the biggest CPG industry challenges that companies face today. The practice of brands relabeling another manufacturer’s products allows them to rapidly expand supply while also offering lower prices. This can present issues for brands attempting to compete with white-label products, both online and in the shopping aisle. However, there are ways to overcome the challenges that these white label brands represent.

Strong digital marketing initiatives and mobile app campaigns allow brands to stand out both online and as consumers are in the shopping aisle. While white labeling strategies typically focus on price, brands can look to other methods to differentiate their products and gain loyal consumers. Through digital reputation management and mobile marketing, brands can pull consumers away from their white label competitors and influence them to buy their products.

Gaining an Edge on White Label Brands Through Online Shopping

Consumers searching for products online are typically researching those products for quality and efficacy. This area is where brands can gain an edge against white labeling. By cultivating a strong online presence as a marketing strategy to attract customers, brands can connect with quality-focused consumers. Specific areas to focus on include:

  • Social media: A brand’s social media pages should not focus entirely on marketing. Instead, they should be used as a means of online customer service. By offering solutions to customers having issues, brands gain goodwill and are transparent in their customer service efforts. This strategy creates a reputation for quality.
  • SEO: Brands should strive to present themselves as subject matter experts through search engine optimization campaigns. Brands should think of the common issues their consumers are trying to solve through their products. Then, they can create content which helps address those issues. This strategy establishes the brand as a trusted authority in their niche.
  • Emerging tech: Having to face competition both in the shopping aisle and online is tough for CPG brands. However, there are emerging platforms which are not yet saturated. Brands should consider ways they can cater to consumers who prefer shopping via mobile devices, or even through voice ordering with smart speakers. As of the end of 2017, 82% of online users in the U.S. used a device for mobile shopping, so brands must be prepared to offer products through these platforms.

By embracing technology, brands that wish to compete against white label counterparts will stand out. This increased brand awareness and affinity will drive sales, allowing brands to gain the edge even when the competition can offer a lower price. Online, the brand differentiates itself through a reputation for quality.

CPG Industry Challenges When Competing Against White Labeling In-Store

CPG industry challenges for brandsCompetition becomes more heated in the shopping aisle, as brands must compete against white label brands and their retail counterparts; private label brands. A strategy which allows brands to guide consumers to their products in the store is one which is best suited to face this challenge. Mobile apps are typically the best option for engaging with consumers as they shop. Third-party partnerships offer multiple benefits to brands who want to compete in the aisle, including:

  • Improved visibility: With a mobile app, consumers can receive marketing messages for specific products in the store. These notifications make consumers more aware of the product while they’re already in a shopping mindset, which also makes them more likely to seek it out.
  • Customer priming: Certain mobile apps offer consumers the opportunity to use their phones to go on digital scavenger hunts. Shopkick uses this as an engaging in-store strategy to help its partners guide consumers to specific products, and prime them for purchase. By incentivizing the consumers to scan UPC codes, brands encourage them to interact with the products physically. This exponentially increases the likelihood of purchase.  
  • Incentivized selling: Through a rewards program, brands can both support a customer priming strategy and heighten rewards for purchase. This incentivization comes in the form of rewards points, which consumers often value more. These rewards represent an achievement to the consumers, which makes them more likely to have a favorable impression of a brand.
  • Reduced reliance on discounts: Often, the only option for brands to compete with white labeling is to go white label themselves so they can cut prices. However, rewards programs can be used to take the place of these margin-busting coupons and discounts to reach price-conscious consumers.
  • Supplementing proprietary programs: Innovative retail mobile apps from third-parties can be used to offer additional features to customers without having to redesign an existing app. Partnering with third-parties allows brands to take advantage of the newest innovations in mobile app marketing without the expense of in-house development.  
  • Access to an expanded audience: Brands are often challenged when it comes to gaining retention for proprietary apps. This is because consumers who use proprietary apps are typically already loyal to the brand. Third-party apps provide a means to reach an entirely new pool of consumers.

Brands facing the significant CPG industry challenges created by white labeling should look to digital marketing and mobile apps to compete both online and in the store.

Brands facing the significant CPG industry challenges created by white labeling should look to digital marketing and mobile apps to compete both online and in the store. These strategies are about catering to the customers and guiding them to a brand proactively, rather than trying to compete on price directly. Establishing a reputation for quality and reaching out to consumers at the right time is often enough to help brands overcome the increased competition created from white labeling.

Shopkick helps our partners stand out from white label brands on the store shelves by offering an innovative app that engages consumers. To become a partner and connect with our active audience of household shoppers, contact us.

Image courtesy of Stockforlife



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Dima Volovik

EVP of Product and Engineering

Dima Volovik is the EVP of Product and Engineering at Trax Retail — Shopkick.

Dima Volovik is the accomplished product and engineering leader who led teams to deliver innovative and commercially successful e-commerce products, marketplaces, and enterprise solutions for Amazon, Comcast, Fandango, and Universal Music. Before joining Trax, Dima was the Director at Amazon, where he led product development and Engineering for Amazon Appstore and Amazon Prime Video, CTO at Fandango, and Paciolan, head of technology at Golf Channel/Golf Now, and Global VP of Direct to Consumer Technology at Universal Music Group. Dima’s expertise includes developing consumer products, marketplaces, and enterprise solutions.

Dima grew up in Baku, Azerbaijan, where he received his MS in Electrical Engineering from Azerbaijan Oil Academy, and he currently resides in Los Angeles, California, with his family.