By Warren Storey, email@example.com
It is hard to put a label on consumer purchase behavior these days, what with Americans pulling out of the recession. But one thing is clear: The store brand is gaining ground as a core brand in an increasing number of households.
Despite improving employment figures and a stabilizing economy, American consumers continue to switch to lower-cost, private-label goods across every supermarket category. From cheese to shampoo to laundry detergent, shoppers are trading to store brands in the double digits -- roughly 74% of almost 1,500 consumers recently surveyed by Epsilon Targeting said they shifted to private label in both food and household products. A surprising 61% switched in personal care.
This move could indicate not only the fading perception that purchasing store brands means sacrificing quality, but also that consumers are becoming satisfied with the value of these alternatives. (Wow, the store brand painkiller worked!) Yet at the same time, our research shows national brands still wield influence: In almost all segments, more than 65% of consumers said would return to their national brands, with a coupon.
For manufacturers of the nation’s most enduring brands, this is sobering shift, but they can rise to the challenge. The formula for winning back the best customers is well within reach -- packaged goods makers just require the key ingredients of scale, consumer data and new-and-improved communication channels.
Winning back store-brand shoppers in five steps
To recapture this shifting segment and, importantly, to prevent additional brand-switches, we offer these state-of-the-industry findings:
No generic answers
Indeed, there is no prepackaged solution to winning back consumers who have switched to store brands. But manufacturers certainly do have a recipe for altering the shift -- it exists through the use of shopper data and tailored marketing.
The first step is segmenting out those consumers who have traditionally been faithful to national brands, since private-label loyalists are much more difficult to win back. Then, using robust, actionable data, manufacturers can win best shoppers with samples and money-saving promotions that emphasize the better quality of their product and innovative features. (New and improved! Works longer while reducing drowsiness.)
Lastly -- and importantly -- manufacturers must deploy their data based not only on what shoppers buy, but where they are likely to be reached, from the mailbox to the smart phone.
By combining these top-shelf ingredients, manufacturers should be able to recapture their most desired consumers while preventing others from switching to store brands. Most importantly, they’ll understand their shoppers better in the long run, which is the trademark of advanced, cross-channel marketing.
Warren Storey is VP Epsilon Targeting, a marketing services firm with a broad array of data-driven, multichannel marketing solutions that leverage consumer insight to help brands deepen their relationships with customers. He can be reached at firstname.lastname@example.org.