About nine out of 10 consumers trust private brands as much as they do national brands, according to a new report from Daymon.
The company's 2020 Private Brand Intelligence Report, “The Future of Private Brands,” also found that 86% of U.S. consumers view private brands as equal or better to national brands. These insights were gleaned from Daymon's 2020 Private Brand Survey of more than 2,000 U.S. shoppers and custom intelligence from the global private brand agency.
The report paints the state of the industry as private brands as seeing $183 billion in private brand annualized sales, garnering a 19.2% dollar share. The report said private brand sales have increased by 5% year over year, and are growing two times faster than national brands.
In a finding that underscores the role private brands play in loyalty, more than half of shoppers surveyed said they pick a store specifically for its private brands and only 6% of respondents said they exclusively shop national brands, with more than a third saying the bulk of their shopping carts are store brands — 11% more than said this in the past two years of the study.
Additionally, Daymon’s report is looking at private brands in the COVID-19 era and what that future holds. The report said private brands are well positioned for the future. Daymon’s custom analysis of store brand programs across the country reveals that best-in-class retailers dedicate 43% of their own brand programs to value-added lifestyle items, compared to the industry average of only 16% — nearly three times the expected level of assortment differentiation.
It’s this shift toward lifestyle programming that is positioning store brands as being stronger in the eyes of consumers, the report said. Daymon’s research demonstrated that four in 10 say that private brands now offer more new and innovative products than in the past, resulting in nearly eight in 10 saying that store brands are “on-trend,” and even more so than national brands, representing a 15% increase in favorability towards private brands over the last two years.
Private brands also have grown their market share in 88% of categories across the store over the past three years, the report said, and pandemic shopping is only going to fuel this, including online. The report said 2019 annualized online sales of private brands reached $1.7 billion, an 87% year-over-year increase. Factoring in COVID-19 shopping habits online in 2020, that number will certainly grow by a big number.