Inside This Issue - News
Store brands make new inroads
November 29th, 2010
DALLAS – Consumers continue to switch to private label products in an effort to save money, a recent poll suggests, even in categories where they once held out for national brands.
A survey by Epsilon Targeting, a company that provides consumer information for targeted marketing solutions, found that 61% of consumers said they have switched to private label personal care products, including shampoo and facial moisturizers. Almost 18% of the respondents said they have begun buying private label baby goods, including diapers, children’s pain relievers and baby shampoo. These categories historically have a higher perceived cost of switching, because consumers feel they are sacrificing on quality.
In Epsilon Targeting’s last survey, conducted in May 2009, 51% of respondents said they had bought private label personal care products, and 13% had bought baby items.
The gain by store brands in the personal care category is especially noteworthy because consumers tend to be more loyal to national brand shampoos, facial moisturizers and other “appearance” products. For example, 37% of respondents said they moved to private label shampoo and conditioner in the past six months, according to Epsilon Targeting’s research, even though traditionally the category is a small one for store brands. Less than 3% of all shampoos and 1% of conditioners bought at supermarkets in the third quarter were store brands, according to data compiled for the Private Label Manufacturers Association by Nielsen Co.
Among other findings of the survey: 75% of respondents switched to store branded household products, with the highest number buying paper towels (49%), followed by bathroom tissue (43%), storage bags (42%) and laundry detergent (39%). Also, 59% switched to store-brand health products, including adult pain relievers (33%) and multivitamins (27%), and in the personal care category more than 28% of respondents replaced their deodorant with a store brand and almost 16% did so with their facial moisturizer.
For the makers of national brands, this continued trend is a call to action, says Epsilon Targeting vice president Warren Storey. There is less of a stigma associated with trying to save money today, he says, and if consumers have a good experience with a low-risk product, they are more likely to try a higher-risk one.
"This is an opportunity for national brands to turn to their vast resources and find new ways to engage their customers one-to-one," Storey says. "National brands have the ability to leverage rich data in new ways, across all communication channels. The information is there — where their shoppers buy, when and how they respond to promotions. As the economy returns, national brands must leverage this intelligence and apply it to pricing, product placement and special offers. Marketers must leverage this data to identify and provide incentives, such as coupons and samples, to consumers who would switch back."