Remember Mattel’s Rock ‘Em Sock ‘Em Robots? Today’s slugfest between store brands and national brands evokes memories of the classic toy that’s gotten hot again.
Store Brands Decisions recently published NYC’s Ipsos Marketing’s latest research in an article called “Consumers See Little Quality Difference Between Store Brands and National Brands.” The data this study revealed is important.
More than 21,600 consumers were interviewed from 23 countries. The study was conducted between November 2009 and January 2010.
The findings:
• 80% stated store brands are as good as or better than national brands for meeting needs: convenience, environmental friendliness, good for the family and trustworthiness.
• 81% indicated store brand foods taste as good as their national brand counterparts, and home products are just as efficacious.
Gone are the old customer perceptions that lower cost equates to lower quality. Consumers now see much more value in store brands.
The implication of this? Many consumers are unlikely to spend more on national brands even as the economy improves unless they are able to offer perceived additional benefits. That added value may come in the form of emotional benefits. Or national brands might continue to do the things that give them a decided edge.
When asked what national brands’ greatest strengths are, respondents cited:
• Packaging
• Innovation
• Uniqueness
• Quality
That’s pretty telling, isn’t it? The fact is: National brands have great experience bringing consumer products to market, and it’s up to them to continue to deliver in the areas customers are looking for and respond to.
By making certain products are continually innovative, unique within categories—or even new category starters like P&G’s Swiffer was a few years ago—national brands continue to enjoy an edge that’s hard for store brands to quickly and effectively replicate without raising prices and taking their clearest advantage away.
Uncompromising quality gives jaded consumers reason to believe again. Prompt responses to quality issues, necessary recalls, and total transparency help build, or rebuild trust.
Plus, updated, refreshed packaging continues to maintain brand relevance with consumers. Because surveys confirm 70% of consumers make their final purchase decisions at the shelf, packaging must “sell” brand, product and assets in terms that are now relevant to consumers who have fundamentally changed. That means adopting today’s language of relevance as the new marketing currency.
Far from being perceived as “the same old” and becoming stale, national brands should use the increased competition coming from retail brands as the impetus for moving ahead and giving consumers more than they expect. More than they can get from store brands. If they do, regardless of premium pricing, they will continue to succeed.
Questions: What’s your take on store vs. national brands? Who’s better at offering the products you want at the prices you want to pay?
I’d love to hear from you.
Tags: customer experience, customers, Marketing
Ted, speaking of store brands, I like Target’s revamp of their own store brand with the Up and Up line. Fresh and current packaging with probably the same ol stuff under the hood. What’s your take on removing the name of the store on the box in favor of creating a new line such as ‘up and up’?
Social comments and analytics for this post…
This post was mentioned on Twitter by Veronica_Jarski: The Slugfest Between Store Brands and National Brands (new post at The Daily Fix) http://bit.ly/9euaXf...
Hi Paul,
Thanks for commenting on my post. You brought up an interesting PL example and I’ll have to look at the new Up and Up packaging more closely. The concept is fresh and could work well for Target. C’mon now, you don’t mean to tell me that the Target bullseye isn’t on the packaging somewhere???
Do I think it’s a good idea? It depends on the retailer and how well they can execute it. It won’t work unless it’s very well branded, packaged and marketed. Like any national brand, it had better deliver consistently, if consumers are going to find they can trust the quality. There are noteworthy successes using the Up and Up concept. Safeway does this well with its “O” Organics line, for example. Consumers over time recognized that “O” was a Safeway brand. Now that Safeway is distributing its PL brands into other food retailers, brands like “O” are eventually going to be thought of as national brands. Interesting progression, isn’t it?
It seems to me that whether innovation is a factor in the favor of national brands depends heavily on where you shop. I’ve mentioned Wegmans before (and I know they’re a tiny player in the overall market since they’re so highly regional), but in terms of quality, price and variety, I’ve got a strong preference for their store brand. Which is actually good since in some categories they’ve completely replaced the national brand with their store brand on their shelves. The place is always packed to the gills so clearly their customers aren’t complaining about it. And seriously, how much potential for innovation is there in breadcrumbs (or any number of other staple foods)?
Hi Alison,
Great example! Thanks for using Wegman’s PL brand in your comments. While Wegman’s may be a small regional grocery chain, it is one of the strongest, most innovative food retailers in the country. Many larger chains in the U.S. and abroad have approached Wegman’s with offers to buy them out more than once. The family-owned business has so far declined these offers and they’ve focused on building their company in an extraordinary manner. That’s why Wegman’s enjoys such a large, loyal customer base.
I’m glad you made the comment you did: “. . . .in some categories they’ve completely replaced the national brand with their store brand on their shelves.” This points to a national phenomenon. Not long ago, Wal-Mart, for example, pulled Glad and Hefty trash bags and replaced them with their own brand. This spells huge trouble for national brands, doesn’t it? When the largest retailer starts pulling major national brands from the shelves of thousands of stores, the implication is not good for the manufacturers of these brands. That’s why there’s a “slugfest” going on right now. Perfect examples.
Innovation comes in many forms, Alison. And commodities can benefit from them, too. Breadcrumbs? The smart manufacturers have offered Italian seasonings to them in the past. Now, they’ve begun offering panko since chefs have made the delicious, Japanese crispy crumbs a new staple in American kitchens. McCormick hit on something when they began to offer grinders on their spice jars containing peppercorns and sea salt. Those are basic commodities, but how terrific is it that consumers who don’t own mills don’t have to go out and buy them to grind pepper or salt? See what I mean? In order to stay ahead, national brands have to innovate in such a way that it would be too difficult or too costly to replicate for store brands–and still keep the pricing low.
Thanks, Alison, for weighing in. Keep on thinking and asking provocative questions. It’s the most important part of any creative process.
I just had experience w/Acme Market (SuperValu, Inc.) (www.supervalu-ourownbrands.com). The item is Ivins’ Spiced Wafers, famous for over 100 years. The item is baked by same baker as Sweetzels Brand Spiced Wafers, a company outside of Phila. PA. This item is inferior and could cause a choking hazzard for children and elderly. I would like to see this item removed from store shelves asap, not wait till all back stock is sold. I was told by National Brands vis phone that they are aware of the problem, yet, nothing is being made known to public. WHY?? Mary Jane Birkofer – a concerned adult age 77 yrs.
And why do these wafers pose any more of a choking threat than all the other cookies and wafers on the shelves? Remove these and you’d have to remove pretty much all cookie-type foods from shelves. Where’s the justification in that?!
I typically buy Sweetzel’s or Ivin’s or even both every fall… so I would prefer to find them on the shelves as often as possible… and be sure to look for the Spiced Mini-Cremes too. They’re absolutely awesome!