Educating consumers on own-brand products
Although shoppers in the UK view retailers' own brands as being cheaper and better value alternatives to manufacturers' brands, retailers still face the challenge of communicating improvements in quality and taste attributes of their brands to shoppers, according to IGD's new 'Shopper Insight' research.
There is already a vast array of retailer brands on the shelves, with most retailers having a standard range brand as well as sub-brands including healthy, value, premium, and even kids ranges. Across all these ranges, IGD's research showed that the main reasons shoppers gave for buying retailer brands are that they are a lower price (45%), and better value than their branded counterparts (45%). A further 12% buy them because they think they are better quality than the branded version.
Range of popularity The main type of retailer brand ranges purchased are value (39%) and standard (35%), followed by the newer premium range (20%) and healthy eating range (17%).
Buyers of value ranges cited price as their main motivation, and the most popular products are tinned foods, household cleaning products, toiletries, and toilet rolls. Shoppers of the standard ranges mainly buy tinned foods, fresh fruit and vegetables, toiletries, and dairy products.
Premium range shoppers tend to buy fresh meat, chilled convenience foods, and dairy products. This latter group, along with buyers of healthy eating ranges, also have the most positive image of retailer brands, thinking of them as products which compete well on quality against manufacturer brands.
Unbranded stigma Some 24% of shoppers surveyed claimed not to have bought any retailer brands in the past, seemingly because some such ranges have simply not registered as retailer brands with some shoppers (but are rather viewed as brands in their own right, such as Sainsbury's Taste the Difference and Tesco Finest). However, others said that they would never buy a retailer brand because they perceive there is a 'stigma' attached to the traditional image of a cheap product.
According to IGD, shoppers' buying habits depend on a combination of the type of product, the way it is to be used, and the customer's level of loyalty to the manufacturer brand. For example, many did not see any difference between retailer and manufacturer brands in tinned products that will be used as part of a recipe (such as chopped tomatoes). Other manufacturer brands have such strong loyalty that some shoppers said that they would simply not consider buying a retailer brand. Two examples cited were tomato ketchup and baked beans brands.
Education needed But despite the fact that retailer brands have led innovation in a number of areas, including chilled convenience foods, none of the shoppers that IGD interviewed thought that new retailer branded products were developed ahead of manufacturer branded ones.
Clearly there is a gap between the customer's perception and reality. It was assumed that the retail drive behind the development of their brands was to provide cheaper alternatives for shoppers (33%) or to make more money (24%). Attitudes were very different among buyers of childrens' ranges, who were much more likely to think retailers introduced these to build their overall store image (33%).
Improvements in taste (17%), quality (15%), and lower prices (13%) were the main reasons shoppers said they would buy more retailer brands in the future. This is not just a product development issue but, more importantly, a communication challenge: Retailers need to communicate all the different qualities that each range has, clearly and succinctly, while addressing any negative preconceptions that shoppers may hold.
"Shoppers' views of retailer brands vary considerably. While some think of certain retailer brands as strong brands in their own right, others instinctively think only of the economy brands," said IGD's chief executive, Joanne Denney-Finch. "The variety of retailer sub-brands now on offer complicates the communication process. Retailers face the challenge of highlighting the core values of sub-brands, whether this be low prices, healthy eating, or a focus on premium quality, while maintaining a consistent image across all their retailer brands."
According to IGD, successful positioning is crucial, as strong retailer brands offer opportunities to expand existing categories and consumer choice, and can enhance the image of the store as a whole.