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Shoppers Say Quality Better, Buying Habits Will Remain

Benchmark survey shows private label expected to hold share even if economy improves in 2013.

April 8, 2013
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Drugstore retailers should be wary of the discounts they offer on over-the-counter pharmaceuticals in their private label products, according to a new survey conducted exclusively for PLBuyerby Consumer Science.

The data showed that as the cost spread between a national brand OTC, health or beauty product and its private label grew beyond 30 percent, more customers believed the quality of the product was inferior. At a 20 percent discount, about 10 percent of respondents believed the quality of the private label product was not as good as the national brand.

At a 30 percent discount, that total rose to 25 percent. At a 40 percent discount, nearly half thought the private label quality was inferior to the national brand. At a 50 percent discount, more than half believed that.

The data comes from a 400-member U.S. online panel surveyed by Consumer Science, a Dallas/Ft. Worth-based consumer research firm.

In a similar vein, the research found that the best promotional methods were free products and deep discounts, “unsurprisingly,” as it noted. However, the recommendation of a pharmacist was as strong a promotional vehicle for buying private label products at a drugstore, the report said.

Respondents said they visited drugstores once a twice or month, with 15 percent of respondents making weekly visits. A full 89 percent visit the largest drugstore chains in the U.S., Walgreens and CVS, with the remaining group frequenting Rite-Aid and “other” local drugstores.

Respondents said they most often bought private label products from drugstores in the OTC and health care categories, with nearly 20 percent saying they always bought private label OTC at drugstores. Household goods came next for private label purchases in the channel, followed by beauty care and food.

“Females are significantly more likely to buy health care store brands than males,” the report said. “Males are significantly more likely than females to buy store brand beauty care.”

The report also compared attitudes of shoppers between drugstores and supermarkets in those five categories.

“Price perception, and to a lesser extent quality perception, are higher at drugstores than supermarkets for (OTC and health care),” it said. “Conversely, quality and price perception are higher at supermarkets for food, household and beauty care. It is worth noting that some of those shopping at local ‘hometown’ drugstores reported them not having a store brand.”

As drugstores begin to move toward the channel-blurring that sees them add features of convenience and grocery stores, customers are backing their ideas about the direction they’re headed. Respondents said the top reason they shop at a drugstore is convenience, followed by product quality and price. Service and product variety were next, followed by the store’s private label products, and then its loyalty program.

“The higher income household respondents were significantly more likely than lower income households to shop specific drugstores due to their store brand offering,” the report said. “This fits well with previous studies on general store brand attitudes where lower income households aspire to national brands.”

Drugstores are the overwhelming channel choice for prescription drugs, according to the survey. It is the choice for OTC drugs as well, just ahead of mass merchandisers, while trailing mass merchandisers by a large margin in health care and beauty care.

“Drugstores are the most favored destination for prescription drugs predominantly because of convenience and service,” the report said. “Mass merchandisers are the favored destination for the other categories of product, predominantly because of price and convenience.”

The report also showed breakdowns between genders on where purchases were made.

 “Females are significantly more likely to shop mass merchandisers for OTC drugs, while males prefer the drugstore,” the report said. “For prescription drugs, women shop more at drugstores because of convenience, while men tend to shop at drugstores due to quality.”  


 

Consumer Science specializes in primary consumer research.  It utilizes a broad range of techniques and technology to customize research that delivers each customer the most value.

A qualified staff of researchers and moderators provide turnkey research, including study design, respondent recruitment and customized analysis and reporting. The offerings, combining traditional interviewing techniques and the latest technology, include intercepts, one-on-one, dyads, triads, focus groups, large sensory panels, in-home test, surveys, social media monitoring, video analytics and Web analytics.

You can find Consumer Science at www.mmiconsumerscience.com.

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