What Difference? - A Closer Look - Private Label Buyer

A new survey from New York-based Ipsos Marketing, Consumer Goods reveals most consumers around the world believe store brands are as good as or better than national brands in several key areas, starting with value.

According to the survey, 80 percent or more of the 21,623 adults who participated in the online poll in late 2009 and early 2010 said store brands are the same as or better than national brands in nine different aspects, including “providing a good value for the money” (89 percent), “offering products that meet my needs” (87 percent), “offering convenient products” (87 percent), “offering products that are good for the family” (86 percent), “offering products my family requests” (83 percent), “offering environmentally friendly products” (82 percent), “offering food products that taste good” (81 percent), “offering home products that work well” (81 percent) and “offering products I trust” (80 percent).

"The notion that store brands offer a suboptimal product experience — the tradeoff for lower price — seems to be fading in consumers' minds," said a recent summary of survey results.

"Our data indicates that store brands are challenging national brands on a number of key brand attributes," agreed Gil Aitchison, president of Ipsos Marketing, Global Shopper & Retail Research. "In essence, the brand experience associated with store brands is matching the brand experience associated with national brands."

Despite store brands' strong showing, the survey also highlighted a few areas in which more work still is needed, including offering high-quality products (only 73 percent said store brands were the same as or better than national brands), offering unique products (69 percent), offering innovative products (69 percent), and having appealing packaging (65 percent).

“Going forward, a key area of [retailer and manufacturer] focus should be packaging,” said Donna Wydra, senior vice president of Shopper Insights at Ipsos. "Clearly, store brands are not leveraging on-shelf presence as well as they could."

In addition, she told PL Buyer, retailers and manufacturers should continue to look for ways to improve product quality "and offer more unique and innovative products," all of which are important facets of the brand experience.

The survey included consumers in 23 countries around the world, allowing pollsters to identify differences in how shoppers of different nationalities view store brands. According to Wydra, consumers in Italy, Germany, the Netherlands and Japan rated store brands highest — no surprise, given private label's high penetration in those markets. However, the fifth-best marks were given by consumers in the United States, who rated store brands higher than the global cohort as a whole in every category but two — offering unique products and having appealing packaging. In those two areas, U.S. store brands are lagging even further behind national brands than are store brands in the rest of the world.

However, Wydra reported, the biggest difference between U.S. and other global consumers' attitudes toward store brands is in the area of providing a good value for the money. In that regard, 49 percent of U.S. consumers said store brands were "better than" the national brands vs. only 33 percent in Europe, a hotbed of private label activity where store brands often are viewed as parallel to national brands.

"Here in the U.S., however, private label has been positioned primarily as a lower-price alternative to manufacturer brands, and U.S. shoppers are focusing on the price/value equation more closely," Wydra explained.

Wydra noted that consumers’ opinions in regard to store brands have the potential to rise even higher.

"Looking at how economic conditions have driven people to store brands recently, along with the positive results we've seen in this research, [suggests] this is the optimal time for retailers to leverage their private labels,” she said. “By optimizing the private label mix and the communications surrounding them, retailers can drive repeat purchases even as economic conditions improve."

For more information or to access a copy of the report, visit http://www.ipsos.com/marketing. — Denise Leathers