So, in that vein, the small brand buyer may trust the retailer where they’re shopping in the same way that they trust a small brand. If they can’t get the brand they generally buy, they’ll look to the store brand and it becomes an opportunity for that store brand to earn a brand-switch by delivering on what Exclusive Small Brand Buyers said they look for in a small brand.
For example, the report found small brands stand out because they’re perceived to be unique, local, and deliver on specific dietary health needs and environmental benefits. If the retailer’s private brand option is less expensive and delivers against those attributes, they could grow their business.
Is affordability the main driver of private brand growth?
Affordability is the main driver of any purchase. Of all the global consumers surveyed, 93% said a brand’s affordability (or an ability to provide good value for the money) is most important when it comes to brand choice. I think what’s interesting in that response, is that it’s not just saying, lowest price wins. It’s value for the money.
For example, 49% of the Unintentional Small Brand Buyers surveyed said small brands are usually more expensive, but they’re prepared to pay a bit more. And only 20% of those shoppers said they buy the lowest price option.
If a store brand delivers a level of quality, local flavor, and eco-friendly value on top of affordability, that’s additional value to a shopper.
Do you predict private label success increasing in the coming months as inflation is expected to continue?
It’s commonly thought that during tougher economic times, shoppers will look to save money buying store brand products. NielsenIQ data has seen private label share in categories like milk, frozen seafood, and bottled water consistently increase over the last three years, so retailers could certainly grow store brand sales during an extended inflationary period.
However, unlike previous periods of inflation, the acceleration of e-commerce and omnichannel shopping behaviors change things up, putting pressure on to have products available and ready to ship or be prepped for curbside pickup. The explosion of e-commerce is also enabling new brands to gain a larger following as they are equally searchable online from an attribute standpoint. This will put pressure on private label and incumbent brands as their command of fixed shelf in brick in mortar is not the same online.
And like the 2022 Brand Balancing Act report highlights, too, there are global consumers that place a high importance on products being better for them, meeting their dietary needs, as well as better for the planet, achieving sustainability goals. I don’t think a retailer’s store brand or any brand will succeed if they only think about low price.
Even shoppers hit during a tough time seek innovation and some enjoyment from their products. They’re just being wiser about how they fill out their baskets, where they get the best price, and the best long-term or short-term fit in terms of pack size.