Convenience Store News Mentions First Insight | Consumers Continue to Warm Up to Private Label Products
PITTSBURGH — The lines between private label products and branded products are getting a little blurry in consumers' mind, a recent study found.
According to First Insight's "The Quiet Takeover of Private Label," nearly three-quarters (71%) of consumers surveyed believed they could recognize a private label when making a purchase, yet 72% were unable to do so when shown side-by-side images of store brand and national brand products.
Once seen as lower-tier alternatives to national brands, private labels are now becoming more competitive and many retailers are including them in their long-term growth strategies. Retailers are putting more effort into the quality, appearance and marketing of their private labels — and shoppers are responding, First Insight pointed out.
Specifically, 84% of consumers now trust in the quality of store brand products more or the same as national brands, while more than half (52%) say they've been influenced to try a store brand product by in-store promotions, packaging, displays or marketing materials.
First Insight, which works with both major retailers and brands to understand what drives trial, preference and repeat purchase of store brands, recommends that retailers engage consumers directly and use the resulting insights to guide the development, pricing and presentation of their private label products. The First Insight study offers a macro view of how shifting consumer perceptions and behaviors around private label products are influencing trial, loyalty and the decisions retailers must make in a changing economic and competitive landscape.
Other findings from the study include:
- 77% of consumers aren't concerned with how they're perceived for purchasing private label products.
- 47% of consumers say they've tried a private label product specifically because it was a dupe of a name-brand item. Forty-four percent (44%) of consumers — and 70% of those earning more than $150,000 per year — say they're more likely to try a private label if it's marketed as a dupe of a high-end product.
- While 48% of consumers still identify as brand loyal, 32% say they're either brand curious or motivated by price and savings (20%).
- More than seven in 10 (71%) consumers say they would be willing to try a private label if their preferred national brand was out of stock. And once a consumer makes the switch and feels satisfied, they rarely go back, with nearly half (45%) saying they've permanently switched from a national brand to a private label when the product met or exceeded expectations.
- While the stigma around private label is fading overall, more affluent shoppers still feel image-conscious. Nearly half (44%) of consumers making $150,000 per year say they're concerned about how they're perceived when buying private label products. This is a significant increase compared to 27% of those earning between $51,000 and $149,000, and 17% of those earning $50,000 or less.
- Essentials are the entry points for private label trial. Grocery (56%), household cleaning supplies (38%), clothing and apparel (34%), and personal care and beauty (33%) are the most commonly purchased private label categories.
- Two-thirds (66%) of consumers say they recommend private label products to friends and family, and 34% say they're more likely to shop at a retailer specifically because of its private label offerings.
To read the full report, click here. First Insight's report is based on responses from 1,267 participants, ranging from 18 years of age to 80-plus.
"Shoppers aren't loyal to brand names the way they used to be. They're loyal to price, quality and marketing. This creates a highly competitive arena where the best — yet not necessarily the most well known — brands will win," said Greg Petro, CEO of First Insight. "When a national brand stumbles, it opens up an opportunity for private labels to grow their market share — but only for those with products that feel intentional, well-designed and trustworthy. Consumers will let you know exactly which ones those are. You just have to ask them."
Pittsburgh-based First Insight is a global retail platform that uses its native AI to turn real-time customer feedback into profitable strategies for more than 600-plus brands and retailers.
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