“In the just completed shopper research on private label usage conducted by Perception Research Services (PRS), fewer shoppers reported purchasing private label products on a regular basis, compared to the last wave of research conducted in July 2010 (84 percent vs. 94 percent), but those buying private label goods are buying more of it (average number purchased up 25 percent from 4.8 to 6),” reports Consumer Goods Technology.

Paper products continues to be the leading private label category purchased, with increases evidenced across almost all categories, and the largest seen for cereal (+20 percent), cleaning products (+19 percent)

“The data suggests that while the penetration of private label usage may have peaked, a significant portion of ‘triers’ have been converted to ‘believers’ who now choose the private label alternative for more types of products.”

Indeed, national brands will have to do a lot to now tempt those customers back. And might I suggest that any changes or strategies implemented for such an outcome have nothing to do with package design or messaging? To pay more, consumers are going to need an experience, not just a product. Generic brands don’t give this at all, and right now, national brands don’t either. But this is one area where the national brand is poised to be able to make a bigger impact because of all the history and meaningfulness surrounding their products.

Think of your product and your marketing campaigns as a complete experience for the customer and you may just be able to beat private label in the ring.

Posted Thursday, March 24th, 2011 at 6:00 am
Filed Under Category: Private Label, Retail Channel
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Response to “Has Private Label Won the Game?”

Aditya Mittal, Infosys

In my opinion, private labels must also create their own brand image which must offer something beyond just cost advantage. E.g., Kirkland products in Costco are often seen as high quality products consumer can trust. In some cases, they are in fact priced higher than the national brands, e.g., diapers. This kind of “quality” associated with a private label would give it much higher sales and margins than just being a low-cost alternative. Another strategy that private label brands can employ could be more effective sampling. Many consumer don’t trust the quality / effectiveness of the private brand but a small free sample might help remove that perception barrier.

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