Shoppers reluctant to go back to national brands

Issue No. 3 of The Checkout — based on an ongoing shopper-behavior study conducted by The Integer Group, a Denver-based promotional, retail, and shopper marketing agency, and Dallas-based M/A/R/C Research, a brand development firm — examines the motivating factors behind the new reality of private label and the resulting implications for brands and retailers.

According to the companies, the new normal for private label is to often be a part of shoppers' consideration. For instance, 32.2 percent of shoppers said they are buying more private brands this year than last year, and only 6.6 percent of those who said they are buying more store brands than last year said they will be returning to name brands in the future.

Shoppers could be reluctant to return to name brands because they increasingly perceive name brands to be on sale less often. When the frequency of sales and coupons is a factor for choosing name brand over private label, the perceived decrease in deals could mean more reliance on brand attributes that are not strictly a value equation. Additionally, while "trust" was at one time an issue, shoppers are now less likely to doubt the quality of private label brands. Between 2012 and 2015, mistrust of store brand products fell from 25 percent to 22 percent, while trust in national brands fell from 51 percent to 41 percent, the companies said.

And with retailers offering increased diversity and tiers within their own-brand offerings, national brands are starting to lose their hold on innovation and variety. In 2010, 56 percent of consumers perceived name brands to be more innovative; however, in 2015, only 45 percent of them felt this way. This perception, combined with the fact that 74 percent of shoppers who purchased a private label product said it was better priced, seems to indicate that there are fewer and fewer reasons for shoppers to stick with name brands. Shoppers are now seeing private label as an inexpensive option with good enough or comparable quality to national brands, the companies noted.

To read more, visit: http://whitepaper.integer.com/the-checkout-issue-3-2016-private-label/