Store brands threatening national brands

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By: Wise Marketer Staff |

Posted on May 28, 2012

While consumer perceptions toward store brands have slipped on many dimensions over the last two years, store brands may be starting to improve on several product benefits typically associated with national brands (those being quality, innovativeness, uniqueness and packaging) according to a study conducted by Ipsos Marketing.

In the annual study, conducted over the past three years, consumers from around the world were asked to compare store brands to national brands on a host of attributes. The three-year analysis highlighted the following trends:

  • Each year since 2009, the majority of global consumers have perceived store brands to be the same as or better than national brands on all attributes.
  • From 2009 to 2010, store brands slipped in all areas with no indications of improvement in 2011 for value, convenience, meeting needs, being good for the family, and being requested by the family.
  • From 2010 to 2011, store brands gained ground in consumers' minds in the areas where national brands tended to be strongest: quality, innovativeness, uniqueness and packaging.
  • Improved attitudes toward store brand quality, innovativeness, uniqueness and packaging improved consistently across most countries from 2010 to 2011, with sharp increases stemming from Brazil, France, Germany, Mexico, Russia, South Korea and Turkey.

"The data indicates that store brands still pose a formidable threat to national brands - perhaps now more than ever," said Gill Aitchison, president of global shopper & retail research for Ipsos Marketing. "While we might have believed that store brands were reaching their peak during the worst of the recession, it looks as though they are positioning themselves to succeed very well in an improving economy as well."

It is perhaps not surprising that consumer perceptions toward store brand quality, innovativeness, uniqueness and packaging have improved. Retailers are investing more heavily into the development and merchandising of their store brands. Not only do store brands offer higher margins versus national brands and help drive traffic, store brands also offer the means for differentiating between one retailer and another. In their quest to make their store brands more appealing to consumers, many retailers have launched higher-priced, specialty lines - which explains the increase in quality perceptions and the decrease in value perceptions.

"National brands must now battle store brands on all fronts; it's not just a value game any more. National brands must vehemently protect their image for providing higher-quality and more innovative products than store brands. With retailers focusing more on the product development and marketing of store brands, national brands are going to need to work even harder to differentiate their brands with breakthrough innovations, more standout packaging and true product superiority," Aitchison concluded. "Bringing in the voice of the consumer, digging for deeper consumer insights, and leveraging leading-edge marketing techniques will be instrumental to winning over the shopper at the critical moment of point of purchase in order to win the ongoing battle against store brands."

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