What is meant by "private label" in category management?

In category management, "private label" refers to products that are exclusive to a specific retailer. These products are often branded under the retailer's name or a brand created for them, distinguishing them from national brands produced by various manufacturers. Retailers create private label products to offer unique options for their customers, often at competitive prices compared to well-known brand products. This strategy allows retailers to enhance their brand identity, build customer loyalty, and often improve profit margins, as they control the entire process from sourcing to branding.

The versatility of private label items can also reflect specific customer preferences that might not be met by mainstream products, allowing the retailer to cater to niche markets. By focusing on their exclusive offerings, retailers can differentiate themselves in a crowded marketplace.