Private Label Buyer

Ipsos Report Says PL ‘Formidable Threat To National Brands’

May 8, 2012

An annual study from New York-based Ipsos Marketing shows that private label products have been perceived globally as better than national brands each of the past three years, but overall opinions of private label has slipped each year.

In the U.S., 90 percent of respondents said that private label products provide a good value for the money more than national brands. That number, though, was down from 91 percent response in 2010 and 93 percent response in 2009.

“Our data indicates that store brands still pose a formidable threat to national brands – perhaps now more than ever,” said Gill Aitchison, president of Ipsos Marketing, Global Shopper & Retail Research, in a news release. “While we might have believed that store brands were reaching their peak during the worst of the recession, it looks as though they are positioningthemselves to succeed very well in an improving economy as well.”

Private label products gained ground globally in areas where national brands tended to be strongest, Ipsos said the results showed, including quality, innovativeness, uniqueness, and packaging.

“It is really not that surprising that consumer perceptions toward store brand quality, innovativeness, uniqueness, and packaging have improved,” Aitchison said. “Retailers are investing more heavily into the development and merchandising of their store brands. Not only do store brands offer higher margins vs. national brands and help drive traffic, store brands also offer the means for differentiating between one retailer and another.”

Aitchison said recent addition to top-tier private label items could explain the increase in perception of quality and decrease in perception of value. The respondents who said private brands offered high-quality products rose from 68 percent in 2010 to 70 percent last year.

 “National brands must now battle store brands on all fronts – it’s not just a value game anymore,” she said. “National brands must vehemently protect their image for providing higher-quality and more innovative products than store brands. With retailers focusing more on the product development and marketing of store brands, national brands are going to need to work even harder to differentiate their brands with breakthrough innovations, more standout packaging, and true product superiority.”