Consumers Switch Toward Private Label Products

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by: JackLewis
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Date: Thu, 25 Nov 2010 Time: 8:25 AM
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The recession may have completed in the summer of 2009, but U.S. consumers in the first half of 2010 continued toward change toward less dear private label products.
According to an August survey by Epsilon Targeting, the dominant provider of consumer information for targeted marketing solutions, an becoming larger number of consumers switched toward store brand products in the previous six months. Most particularly, 61% said they switched toward private label personal care products, including shampoo and facial moisturizers, while almost 18% of the respondents said they moved toward private label baby goods, including diapers, child pain relievers and baby shampoo. These categories historically have a higher perceived cost of switching, because consumers feel they are sacrificing on quality.
The brand change is a marked increase over Epsilon Targeting's last survey, in May 2009, when 51% of respondents said they purchased private label personal care products, and 13% bought baby items.
The gain by store brands in the personal care category is especially noteworthy because consumers tend toward be more loyal to national brand shampoos, facial moisturizers and other "appearance" products. For instance, an surprising 37% of respondents said they migrated toward private label shampoo and conditioner in the past six months, based on Epsilon Targeting's research. Traditionally, this is a small category for store brands - less than 3% of all shampoos and 1% of conditioners purchased at supermarkets in the third quarter were store brands, according to the Private Label Manufacturers Association (PLMA), through The Nielsen Co. Among drugstore shoppers, the figures were 5% and 4%, respectively.
But Epsilon Targeting's findings are supported by PLMA data that show unit sales of store brand shampoos and conditioners did rise in the third quarter, by almost 71% and 13%, respectively, at drug stores alone.
Still, national brands remain in the minds of shoppers, as indicated by the research. At least 45% of respondents said they would definitely purchase their usual label of personal care, food or household products again if they had a coupon. More than 44% said they would buy their usual brand of health products.
For the makers of national brands, this continued trend is a call to action, said Epsilon Targeting Vice President Warren Storey. There is less of a stigma associated with trying to save money today, and if consumers have a good experience with a low risk product, such as dryer sheets, they are inclined toward move into higher risk areas, such as detergent.
"This is an opportunity for national brands to turn toward their big resources and find new ways toward engage their customers one-to-one" according to Storey. "National brands have the ability toward leverage rich data in new ways, across all communication channels from direct mail toward mobile. The information is there - where their shoppers buy, when, and how they respond toward promotions. As the economy returns, national brands must leverage this intelligence and apply it to pricing, product arrangement and special offers. Marketers must leverage this data to identify and provide incentives, such as coupons and samples, toward consumers who would switch back"
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%).
* 74% purchased private-label food products. Ranking high-priced in this category are bread (42%), cheese (36%) and cereal (35%). With food prices continuing toward rise, as recently reported by the Wall Street Journal, these figures are poised toward increase.
* 59% swapped to store-brand health products, including adult pain relievers (33%) and multi-vitamins (27%).
* 27% of respondents moved to private-label pet care products.
* 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. Almost 24 percent switched on women's shavers.
* In the children and baby category, 9% of respondents traded toward store-brand pain relievers, 6% shifted their baby shampoo brands and 5% changed diapers.
Epsilon's online survey was started in the U.S. on Aug. 5, with 1,452 total respondents and a margin of error of +/- 3.3 points.

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Private Label Product is a Private Label Manufacturer in the UK specializing in Own Label Products, Private Label Supplements and Private Label Vitamins