Own-label gaining ground with shoppers

09 April 2010

NEW YORK: The majority of consumers believe own-label brands match the attributes of more premium alternatives, according to a global study.

Ipsos Marketing, the research firm, surveyed 21,623 adults in 23 countries – including Brazil, China, Germany, India, Russia, the UK and US – with a particular focus on the FMCG sector.

It found that 89% of participants agreed that private label ranges provided excellent value for money, while 87% said these offerings "met their needs".

A further 87% reported that these products were convenient, 86% suggested they were "good for the family" and 82% considered them to be environmentally-friendly.

With regard to specific categories, 81% of respondents thought the food products manufactured by retailers "tasted good", with the overall performance of own-label homecare lines rated equally highly.

Perhaps most importantly, eight out of ten members of the sample trusted store brands, and nearly three-quarters perceived these goods as being of high quality.

Elsewhere, 69% of contributors argued that unique and innovative products were available via this route, while 65% said these low-cost options also had appealing packaging.

"Store brands are challenging national brands on a number of key brand attributes," Gill Aitchison, president of Ipsos Marketing's global shopper and retail research arm, said.

"In essence, the brand experience associated with store brands is matching the brand experience associated with national brands, and that is very alarming for national consumer packaged goods marketers."

Alongside the impact of the recession, companies like Wal-Mart and Carrefour have sought to improve their in-house ranges, with these trends working in tandem to the detriment of brand owners.

Moreover, Aitchison warned that many customers who have traded down during the financial crisis may not return to their pre-recessionary habits.

"Shoppers may be less likely to return to more expensive brands in the future unless the benefits really outweigh the cost, and these will tend to be emotional benefits rather than functional benefits," she said.

In such a climate, it will be incumbent on major players like Procter & Gamble and Unilever to emphasise certain characteristics of their portfolios.

"National brands' greatest strengths versus store brands are packaging, innovation, uniqueness and quality," Aitchison continued.

"These are important facets of the brand experience, and ones that manufacturers should consider in their brand strategy."

Data sourced from Ipsos Marketing; additional content by Warc staff