Department Stores Turn To Private Label To Boost Home Product Sales
As department stores work to overcome a plateauing of sales in their home product assortments, private label selections are an opportunity to develop proprietary products and drive growth.
A new report from the International Association of Department Stores (IADS) revealed that department stores have worked to navigate a challenging marketplace with the introduction of new segments such as kitchen appliances and tableware, home scents, and private label products.
According to IADS, a renewed focus on private label products is among of the hottest trends in the department store space. New products, new categories, and new brands have been developed, and marketing investments have been made to match the brands’ positioning and quality with their perceptions by customers, the report said.
Private label products can represent up to 35% of the total sales in the home segment, and the few IADS members not already operating such private labels are planning to do so in the next 3 years, the report said.
On average, the Home & Decor category's relative share of total turnover for IADS members decreased from 16% in 2022 to 14% in 2023. This correction comes after three years of growth as customers sought to equip their homes in difficult times of remote work and difficulty going outside, the report said.
Home accessories are, on average, the strongest segment with 48% of the category business, followed by household appliances at 22%, electronics at 15%, furniture at 10% and other products (gifting, art, stationery, and pet-related products) at 4%.
Among the more notable expansions of private label home collections by department stores is Macy’s Shash Diné Hotel Collection. Expanded in January of 2023, the limited-edition array of home pieces was created for the department store and curated by Baya Meehan, founder and CEO of Shash Diné EcoRetreat, in Arizona.
The collection included quilts, comforters, blankets, kimonos, robes, towels, and throws. These Navajo-inspired products allow customers to own their style and bring a piece of the Southwest into their homes. Prices ranged from $70-$500.
Earlier this year, Kohl’s gave its home products assortment a major refresh and is now offering shoppers an expanded assortment of products that are available in-store and online. To create a meaningful transformation of its home business, the retailer has expanded select categories in its assortment by 40%, offering newness in areas including wall art, glassware and ceramic home decor, barware, botanicals, lighting, and more.
