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Article | April 8, 2010
Fresh research: Shoppers continue to give thumbs-up to private-label
Many consumers don’t see any improvement in the economy as it pertains to their household budget. For national brands, the call-to-action is a focus on value and brand experiences.
Fresh research confirms that budget-strapped shoppers don’t see the economy improving, and many of them are continuing their commitment to purchasing private-label products. The study, which GfK Research conducted in February for the Private Label Manufacturers Association, and which was reported on by Marketing Daily, seems to refute at least one recent report indicating a crack in private label’s gains.
In a poll of 800 supermarket shoppers, the research uncovered the following findings:
• 80% of consumers see no improvement in the economy.
• 40% believe the economy has become weaker
• 39% cite the current economy as a “very important” factor when they purchase a retailer’s brand.
• 62% say they plan to purchase more private-label products going forward.
• 43% say they have recently stopped buying a national brand and have switched to a retailer’s competing brand.
In industry jargon, some packaging professionals describe this shift from national brands to retailers’ brands as a ‘flight to value.’ The factors driving the rising sales of private label go beyond lowest price. Retailers are beginning to understand the marketing muscle of packaging, and thus are leveraging design to create distinctive identities for their products. The result is retailers that execute package design well are creating a value proposition in shoppers’ minds. Shoppers, in turn, are increasingly indicating that they perceive product quality for private-label as equal to or exceeding that for national brands.
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