Corporate Eye

Store Brands Continue to Gain Popularity While Name Brands Lose Customers

generic store brand krogerThere was a time when the majority of consumers believed that name brands were better than generic store brands. With a perceived higher quality attached to name brands, products with those brand names on them came with higher prices.

However, the perception has shifted (I reported on the shift to store brands here on Corporate Eye multiple times over the past few years — links to those stories and statistics can be found at the end of this article). Today, most consumers believe that store brands and name brands are equal.

The perception gap between store brands and name brands has closed rapidly over the past few years. A recent study from the Integer Group found that 64% of consumers do not think that name brands are better quality than store brands (up from 57% in 2010). Today, 77% of shoppers consider both name brand and store brand products before they make a purchase. The percentage is even higher among women at 90%. Considering that women make or influence the vast amount of purchase decisions, this is an extremely important statistic.

The data from the Integer Group’s “Private Label” report also reveals that brand preference can be greatly affected by category. Important findings related to category brand preferences include:

  • Health and Beauty: 74% of women prefer name brand health and beauty products, but just 56% of men say they prefer name brands in this category.
  • Laundry Detergent: 69% of male and female consumers prefer name brand laundry detergent (the category where brand names were ranked highest in the study).
  • Medicine and Milk: Only 26% of all consumers prefer name brand medicine and milk over store brands.

The rise of store brands isn’t new. The shift has been happening for years as consumers have access to more information and can learn the ingredients in products within minutes. Comparing a specific name brand product to a generic brand product simply requires a web search and a few minutes of reading. With smartphones in hand, consumers can even research brands and products in stores when they’re actively making a purchase decision.

Store brands are well positioned to leverage this shift and steal more market share from name brands. On the other hand, name brands need to focus on building differentiated perceptions in consumers’ minds before they arrive in stores. It’s more important than ever for name brands to tap into consumers’ emotions and create the perception that there is no substitute for the name brand.

Is your brand up to the challenge?

More About Store Brand Trends and Statistics

You can download the full report here.

Image: Lisa Brewster

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Susan Gunelius is the author of 10 marketing, social media, branding, copywriting, and technology books, and she is President & CEO of KeySplash Creative, Inc., a marketing communications company. She also owns Women on Business, an award-wining blog for business women. She is a featured columnist for Entrepreneur.com and Forbes.com, and her marketing-related articles have appeared on websites such as MSNBC.com, BusinessWeek.com, TodayShow.com, and more. She has over 20 years of experience in the marketing field having spent the first decade of her career directing marketing programs for some of the largest companies in the world, including divisions of AT&T and HSBC. Today, her clients include large and small companies around the world and household brands like Citigroup, Cox Communications, Intuit, and more. Susan is frequently interviewed about marketing and branding by television, radio, print, and online media organizations, and she speaks about these topics at events around the world. You can connect with her on Twitter, Facebook, LinkedIn, or Google+.
 
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