Q&A: Consumers Lean on Private Brands for Back-to-School Shopping
With inflation still a major concern for most consumers, back-to-school shopping this year can seem more challenging than previous years with the price of food and household items rising across the board.
Store Brands spoke with Andrew Moberly, Strategic Advisory, Senior Director at Daymon about how consumers are navigating the current economic environment as kids return to school.
Store Brands: With kids heading back to school, how are retailers promoting private brands as a more affordable alternative to name brands? How much does the promotional strategy change for the back-to-school season?
Moberly: With the back-to-school season in full swing, parents and kids are seeking new products to freshen up their daily routines. Inflation is driving shoppers to seek out solutions to stretch their wallets during back-to-school shopping, presenting the perfect opportunity for retailers to promote their private brand products and encourage trial.
We are seeing promotional strategies for back-to-school needs centered on cross-merchandising private brand solutions to encourage purchasing across categories in and out of the store. The shift from back-to-school being typically just an in-store experience, is now an omnichannel experience driven by brand development and marketing campaigns that focus in on the occasion. Many shoppers use retailer websites, apps and social media to purchase items online, or compare deals before deciding where to shop in-store.
As such, retailers are partnering with influencers to elevate deals as well as promoting shoppers to join their loyalty rewards program and apps that offer unique savings across everything from lunch and snack options to apparel and weekly promotions. Retailers understand the needs for saving during this time and are also leveraging social media channels and email newsletters for their latest back-to-school content and weekly specials.
While an omnichannel promotional strategy is not exclusive to back-to-school, now marks a crucial time to encourage trial and convert private brand purchases now into loyal cross-category shoppers for the remainder of the school year.
SB: What categories (pencils, paper, binders, etc.) are expected to see the largest uptick in private brand purchasing and why?
Moberly: During this time parents and caregivers are focused on purchasing not just school supplies, but stocking the fridge, freezer and pantry with healthy breakfast, lunch and snack options. With wallets tightened, we expect to see upticks in private brand purchasing across food and non-food categories, especially as 73% of consumer think private brand prices are better than national brands.
Across non-foods, we can expect parents to lean on private brands for school supplies, household cleaners and paper and plastic goods. In the 2021 back to school period, these private label categories grew 9% from 2020. Within grocery, we anticipate growth across private brand fresh categories, including fresh deli and prepared food offerings. These categories experienced significant growth in 2021, as busy parents looked to balance returning to the office and extracurricular after school activities, as well as making healthy meals for their families.
We expect convenient and healthy meal component purchasing to continue, with private brand standing to benefit as they offer more competitive prices in fresh categories that carry heftier price tags (i.e. prepared meals).
SB:How will the increase in food prices impact snack shopping for the school year? What types of products will consumers opt for?
Moberly: We anticipate that parents will respond to food inflation similarly to the general public, with lower-income households trading down or responding to traditional value plays (i.e., value packs, promotions) while those with higher incomes less prone to making changes. An added element that will impact some consumers this year is the ending of the pandemic relief program, which covers lunches for all students.
Fortunately for retailers, 21% of parents suggest that they would switch to private brands to offset pricing concerns, providing an opportunity for retailers to gain further brand loyalty within categories such as snacks.
Aside from pricing concerns, the pandemic heightened preventative health awareness and the need for products with enhanced nutritional components. Parents are scrutinizing ingredients and seeking fresh items or those with free-from or functional health claims (i.e., energy boosting, immune boosting).
While some may trade down to more affordable alternatives, we don’t anticipate that parents will completely sacrifice quality and healthfulness when buying their children snacks, regardless of income level. Having a private brand presence in fresh and free-from or functional snacks is more important than ever as many parents will not sacrifice quality, health, and functional attributes, but may switch from more expensive national brands.
Convenient snacking options should not take a back seat, as post-pandemic routines of in-person learning and extracurricular activities have returned. It’s no surprise that 39% of parents anticipate buying more snack, nutrition, and performance bars in 2022, as 87% feel that they are good for when they are in a hurry. Private brands can win with all consumers by leading with quality, staying up-to-date on important health and wellness claims, and putting forth convenient solutions.