Lower prices reflect changing shopper expectations following the recession and a fundamental shift in the power balance between the country’s supermarkets and their shoppers. At the same time, retailers have extended and enhanced their own label ranges to meet the demand for cheaper goods.
A report published exclusively in this week’s edition of Marketing Week shows that the vast majority of consumers have no problem with buying supermarket own label items and often prefer them. The study by Perception Research Services (PRS) finds that 55 per cent of shoppers consider ‘best/finest’ own label ranges to be the same quality as equivalent brands, for example, while 38 per cent see them as better.
This represents a threat to the market share of manufacturer brands, particularly as discount retailers Aldi and Lidl continue to grow. As prices fall across all supermarkets, manufacturers are under pressure to offer better deals to retailers or remain on constant promotional cycles. The growth of own label also means that the shelf space or prominence of other brands within stores is under threat too. As Grant Montague at PRS points out, many consumers now see own label products “as brands in their own right”.
Market research is a valuable tool for manufacturer brands seeking to combat this challenge. While the PRS study shows a high level of preference for buying own label goods, it also reveals a lack of emotion towards the products, with the highest proportion of people (47 per cent) saying they feel ‘indifferent’ when they buy own label and only 19 per cent saying they feel ‘happy’.
In this context, manufacturer brands must look carefully at their own customer base to determine who buys their products and why. Identifying these passion points and marketing to them effectively can help brands to stay ahead of own label competitors. As Niomi Taylor, marketing manager for coffee brand Percol, notes, consumers historically prefer brands to own label “but the gap is closing”. Making smarter use of insight can help brands to survive.