Makers of name brand products beware: Store brands continue to be accepted and embraced by consumers.
Last July, we reported on a study by Accenture indicating that 64 percent of shoppers' grocery carts were at least half full of store brand products -- and 39 percent said they had bought more store brands in recent years.
Now a new study by marketing agency The Integer Group, in association with the market research firm M/A/R/C Research, shows that consumers increasingly believe store brands can match brand names in quality. In fact, in the 2012 study, 64 percent of shoppers said brand names are not better quality products, versus 57 percent in 2010. Only 51 percent of shoppers say they continue to buy brand name products over store-brand alternatives because they trust the brand name, according to the study. Only 20 percent of shoppers agree that they go right for their brand name choice and get what they want.
Just as important, there seems to be a broad change in the perception of store brand or private label products. As store brands have grown in popularity, groceries and retail chains have created their own branded lines. Target, for example, sells its own Archer Farms brand, and Whole Foods pitches its 365 Everyday Value line.
In recent years, such retailers have paid more attention to packaging so their products can be competitive on store shelves. It must be paying off. Only a year ago, 68 percent of shoppers agreed that brand name packaging was more attractive than store brand packaging, according to the study. This year, the percentage dropped to just over half — 52 percent of shoppers.
More good news for store brands according to the study: They are favored by women, who do the majority of the shopping (a factor in Kimberly-Clark's European pull-out of its Huggies brand). While 77 percent of all shoppers consider both brand name and private label products before making a purchase, 90 percent of women consider both prior to purchase.
The study did show, however, that brand name products are stronger in some product categories. For example, when it comes to detergents, 69 percent of shoppers prefer brand names to store brands. That could be a testament to the brand marketing acumen of Procter & Gamble, far and away the leading maker of brand name detergents. Similarly, 65 percent of shoppers prefer brand names in the health and beauty products category.
Still, there was a glimmer of hope for brand names. A majority of shoppers (65 percent) do not believe brand names are more expensive than store brands. The reasons for this are varied; for example, almost half of shoppers (45 percent) say it is because they can get coupons for name brands, while 41 percent indicate the name brands they like are often on sale.
The Integer Group and M/A/R/C Research conclude that "the lines between private-label and brand names are blurring," but that "trust is still a mainstream influencer and brand names hold an edge." But if the trend toward store brands is any indication, brand names may not hold that edge much longer.