In general product label reflect on the status of product using stock quantity and arrival time. WooCommerce plugin support 4 statuses including Feature, New, Sale and Out of Stock. Based on wooCommerce plugin, you can add custom label to product. It helps users to get more information about product.

Then, head to Dashboard > Products > All Products and select product you want. And then, go to Product Data > UDesign Extra Options. Input label name and choose your favorite colors on Custom Labels area.