Nielsen just reported that 72% of consumers believe private label store brands are equivalent to name brands. The study also found:
- Private label accounted for $81 billion in U.S. sales this year, up 10.2% from the previous year.
- Sixty-three percent of consumers believe private label's brand quality is just as good as name brand quality, while 33% of respondents said they consider store brands to be of higher quality than name brands.
- Price and value are the primary drivers for growth, with 74% of consumers expressing price as the key purchase factor.
- Two-thirds (67%) of those surveyed said store brands provide "extremely good value" for their prices, while 35% are willing to pay the same or more for a store brand if they like it.
What's a name brand to do in this kind of consumer environment? Well, it always helps to differentiate. Brand names were built on the idea that they represented higher quality and new benefits. Granted, it's hard to innovate in commodities, and some of the first signs of brand name demise were in categories where it became a tougher sell to convince a consumer that green beans were somehow differentiated.
Today, name brands that still succeed have found a way to infuse more than just the promise of extra functional or tangible value into their brand. They infuse emotion. They infuse the alignment of values with the product choice.
This may be tougher to do in commodities, but it's still entirely possible - and profitable - in most categories. It has to be real, it has to be credible, but Americans have proven time and again they are willing to invest their dollars (even shrinking dollars) into brands that give them a jolt of emotional value.