Private Label Household Care Trends: Post-Downturn Implications & Opportunities

Introduction

Private label has witnessed continued growth, with own brands displacing national brands both in stores and in consumers' consideration set. Wider availability and growing sophistication has led to growing acceptance and trust. The economic downturn has reinforced private labels as a credible, yet cheaper alternative to branded goods, driving awareness and trial across demographic groups.

Features and benefits

* Utilize product, consumer and market insight intelligence to better evaluate the important strategic considerations that private label growth brings
* Understand the scale and growth of the private label household care opportunity by sector and country, split by category level
* Access proprietary consumer opinion data highlighting the prevailing attitude towards own label cleaning and laundry products versus national brands
* Identify and capitalize on the ten trends characterizing contemporary private label household care product development and marketing
* A dedicated focus on household care for more specific and salient insight

Highlights

The economic downturn led to changes in shopping patterns that will remain in the long term—the adoption of private label being a pertinent example of this. In 18 of the 20 countries covered in Datamonitor's consumer research, more than 40% of respondents said that opting for private label to save money has become more important over 2008-10
Own label market shares vary markedly by country/region. Developed markets in Europe and North America have maintained their position as the leading private brand markets, but growth is evident elsewhere as emerging market retailers grow big enough to achieve the economies of scale that helps facilitate private label development
More than 70% of consumers feel that, all things considered, private label cleaning and laundry products are at least identical to well known/market leading national brands. Favorable perceptions of private label household care alternatives reduces the perceived compromise of switching to store brands

Your key questions answered

* What are the key trends driving consumers' propensity to purchase private label household care products? How do they vary by country?
* What are the 10 NPD and marketing trends reflecting own brand development in consumer packaged goods?
* What private label household care product formats represent the biggest promise/threat to national brands?
* What are consumers' perceptions of private label household products compared to national brands? How do these perceptions influence where they shop?
* What has been the impact of the economic recession on consumers' propensity to purchase private label products? How might this change going forward?
[Studien Infos ausblenden]

TABLE OF CONTENTS
Overview 1
Catalyst 1
Summary 1
Executive Summary 2
In many countries and segments, private label is outperforming the category as market penetration follows an upward trajectory and more shoppers embrace store brands 2
Obtaining value for money, including through the consumption of private labels, is a deeply embedded priority for household care shoppers 3
Consumers are forming more favorable perceptions of private label household care products, which reduces the perceived compromise associated with switching to own label 4
Favorable perceptions of private label products means that they can often be 'destination brands' driving grocery store choice and satisfaction 5
Private labels are being used in more sophisticated ways to aid retail branding 6
Actions for manufacturers 7
Actions for private labelers 7
THE FUTURE DECODED 19
INTRODUCTION: The growth of private label across sectors is one of the most pervasive trends influencing consumer packaged goods 19
Private label growth can be attributed to both ‘consumer pull’ and ‘manufacturer push’ 20
TREND: In many countries and segments, private label is outperforming the category as market penetration follows an upward trajectory and more shoppers embrace store brands 22
Growing numbers of shoppers are turning to private labels and many intend to continue doing so 23
Private label is accounting for an increasing amount of grocery spend across most countries 27
Household care private label penetration varies considerably by market and category 30
Key take outs and implications: across countries, shoppers are continuing to make private label a common basket choice 32
INSIGHT: Obtaining value for money, including through the consumption of private labels, is a deeply embedded priority for household care shoppers 34
The thrill and necessity of the 'bargain-hunt' continues to entice household care consumers 35
Value consciousness is a highly pervasive influence directing household care product choices 40
Private label is generally synonymous with saving money in household care consumers' minds 43
Buying private label/store brands to save money has become more important to more than half of consumers in the period 2008–2010 47
More consumers report purchasing private label household care products in order to save money over the period 2009-10 49
Consumers form their value for money judgments on factors beyond lower prices and product discounts 52
Key takeouts and implications: consumers continue to be highly selective in their purchase decisions, which has been a favorable pre-requisite for private label growth 56
INSIGHT: Consumers are forming more favorable perceptions of private label household care, which reduces the perceived compromise associated with switching to own label 57
Consumer research routinely highlights improving perceptions of private label quality 58
With improving quality perceptions, private label household care brands are generally recognized as being credible alternatives to name brands, but evidence of an 'attitude-behavior gap' exists 68
Brand loyalties are under continued threat, with only small minorities of consumers in most countries attaching significant importance to brand image 73
Key takeouts and implications: private labels no longer suffer from a widespread stigma of inferior quality 81
INSIGHT: Favorable perceptions of private label products means that they can often be 'destination brands' driving grocery store choice and satisfaction 83
Private label range exerts high influence on store choice for nearly half of shoppers in many countries 85
Approaching two-thirds of shoppers are satisfied with the private label offering where they do most of their grocery shopping 88
The evidence is mixed as to whether store brands can garner store loyalty and to what extent the optimal mix is between private labels and national brands 92
Private label potentially appeals more to time pressured consumers who want to make quick and effective choices in-store 93
Key take outs and implications: some retailer own brands are becoming ‘destination’ products that closely match shoppers' preferences, boosting the reputation of product and retailer alike 95
INSIGHT: Ten trends characterize contemporary private label household care product development and marketing 96
Tiered private label ranges are common across store formats and regions as retailers look to attract a broad range of consumer segments 97
Retailers are inflating the premium credentials of high-end own labels 99
Leading supermarkets are actively investing in discount lines to help counter the escalating threat posed by discounters such as Aldi 102
Private labelers are responding to consumer expectations by better involving them in the new product development process 104
Retailer brands are intensifying marketing efforts and, in doing so, embracing higher profile and more flamboyant marketing promotions 105
Retailers are aggressively delisting under-performing national brands (and replacing them with own label alternatives), and using their elevated bargaining power to impose price reductions 109
Having become compelling brands in their own right, some retailers are selling their brands outside of their own stores, including via online channels 110
Co-branding between private label and national brands is a likely outcome, so too is added retailer influence in the development of national brands 111
Retailers are reintroducing some national brand SKUs having realized there appears to be a optimal level of private label penetration 112
The extension of store brands into services and other areas aims to strengthen the brand equity of the retailer and drive shopper loyalty 112
Key take outs and implications: private labels are being used in more sophisticated ways to aid retail branding 114
ACTIONS 115
Actions for manufacturers 115
Determine whether to manufacture private label brands or not 115
Scrutinize and manage price gaps versus competing retailer brands 117
Create more exclusive versions of branded products to increase the (perceived) distance from private labels 119
Maintain national advertising spending to emphasize brand superiority and take the battle out-of-the-store 122
Highlight the risk of switching to a cheaper non-branded alternative 122
Consider selling differing brand formats through discounters 122
Entice and better reward consumers for their loyalty with more creative and engaging brand loyalty initiatives 123
Foster more collaborative relationships with retailers by leveraging synergies that benefit consumers 124
Consider developing value-driven flanker brands, but be sensitive to the impact it can have on broader brand perceptions 124
Be transparent because it can help build brand trust and equity 125
Effectively embrace social media to have dialogue with consumers 128
Actions for private labelers 130
Determine the most appropriate strategic approach taken to manage private label development and brand perception 130
Use the post-recessionary climate as an opportunity to further embed private label into consumers' lives 131
Reduce the perceived quality gap by offering something truly distinctive and/or standing for something 132
Invest in enhancing the image of the store brand itself, and, in doing so, emphasize a more personal touch 133
Make a private label brand synonymous with a particular category to elevate its' status in consumers' consideration set 134
Take steps to prevent private label cannibalization 134
APPENDIX 135
Definitions 135
Methodology 135
Further reading and references 137
Ask the analyst 140
Datamonitor consulting 140
Disclaimer 140


TABLE OF FIGURES
Figure 1: Private labels can be classified in various ways 19
Figure 2: The private label market is impacted by a broad range of drivers and inhibitors 21
Figure 3: Private label is generally following an upward trajectory and more consumers embrace store brands and demonstrate an ongoing intention to do so 22
Figure 4: Growing numbers of shoppers across geographic territories are turning to private labels 24
Figure 5: The search for value does not simply equate to opting for the lowest price 34
Figure 6: Obtaining value for money, including through the consumption of private labels, is a deeply embedded shopper priority 35
Figure 7: In adopting a 'recessionary mindset', consumers became more conscious of value for money 36
Figure 8: Around half of all consumers claim to be highly attentive to the changing prices of their favored grocery products—illustrative of high price sensitivity among scrupulous shoppers globally 38
Figure 9: There has been a small increase in the consumer propensity to purchase household care products on the basis of value for money 41
Figure 10: Global consumers have adopted various strategies to save money when grocery shopping, including routinely buying private label/store brand products in order to save money 44
Figure 11: The fact that private labels are cheaper than most national brand equivalents, and that this drives purchaser intent, is supported by both academic and empirical research studies 46
Figure 12: Buying private label brands to save money has become more important to more than half of shoppers in 2008-2010 48
Figure 13: Consumers in almost every market have become increasing disposed to purchasing private label cleaning or laundry products 50
Figure 14: That product features best address one's own needs is consistently viewed as exerting a high amount of influence on how consumers across age and gender groups judge a grocery product as offering 'good value for money' 54
Figure 15: Consumers form their value for money judgments on factors beyond lower prices and product discounts 55
Figure 16: Consumers are adopting private label because of a prevailing perception of improving quality parity, and the deepening relationships materializing with retail brands more generally 58
Figure 17: Perceptions of private label are changing across the majority of CPG categories 60
Figure 18: In 2009, only a small percentage of consumers indicated they were unfamiliar with the quality of private label household cleaning products 61
Figure 19: Consumers are forming ever more favorable perceptions of private label across CPG sectors 62
Figure 20: Three-quarters of all consumers are of the opinion that private label household cleaning products are in no way inferior to their famous name equivalents 63
Figure 21: The notion that private label laundry products can be superior to their national brand counterparts is an emergent consumer mindset 66
Figure 22: Approaching half of global consumers agree that private label household cleaning products are good alternatives to name brands 69
Figure 23: Spanish consumers in particular are of an opinion that private label laundry products are good alternatives to national brands 71
Figure 24: The 'social currency' of brands is not necessarily seen as being high in most countries 77
Figure 25: Just under half of global consumers across countries demonstrated a willingness to give up favored brands in order to save money in the midst of the global economic crisis 80
Figure 26: A desire to buy cheaper brands has been prevalent amid the difficult economic circumstances characterizing 2009 and 2010 81
Figure 27: Favorable perceptions of private labels means that they can often be 'destination brands' driving grocery store choice and satisfaction 84
Figure 28: Retailers develop private labels for many reasons, including to enhance store differentiation 84
Figure 29: The quality and quantity of private label is a mid-ranging factor in terms of the influence on where consumers shop 85
Figure 30: South Korean and Spanish consumers place most importance on the private label offering in deciding where to shop 86
Figure 31: Satisfaction with private label exceeds the relative influence that own label range has on store choice—in many instances by a large margin 89
Figure 32: Approaching two-thirds of shoppers are satisfied with the private label offering where they do most of their shopping 90
Figure 33: A notable shopper segment feels burdened by too much choice when grocery shopping 94
Figure 34: Private label is a potentially compelling solution for choice burdened, time scarce, disengaged shoppers 94
Figure 35: Ten trends characterize contemporary private label product development and marketing 96
Figure 36: Private labels can be classified in various ways 98
Figure 37: The following household product examples reflect the tiered nature of the private label offering within the sector 99
Figure 38: Safeway's Bright Green Clean marketing effort is an apt illustration of store brand marketing taking cues from initiatives typically associated with national brands 100
Figure 39: Well-designed, vibrant packaging adds distinction to many contemporary private label ranges 102
Figure 40: Leading supermarkets are investing in discount lines to better compete with the hard discounters 103
Figure 41: The branding of Asda's new private label offering reflects a customer-centric approach to brand development that is becoming more apparent in private label marketing 105
Figure 42: Retailer brands are intensifying marketing efforts and, in doing so, embracing higher profile marketing promotions to further boost private label credibility 108
Figure 43: More co-branding between private label and national brands is a likely outcome going forward 112
Figure 44: The extension of store brands into broader services is inevitable as retail brands become stronger 113
Figure 45: National brand players are faced with a dilemma over whether to produce private brands or not 117
Figure 46: National brand manufacturers must carefully manage price gaps versus retailer brands 119
Figure 47: Manufacturers looking to increase the perceived distance from private labels must excel more than their competitors in the provision of factors associated with the PPI 121
Figure 48: There are four reasons why trust- and ethos-based branding are of increasing importance 126
Figure 49: Industry players must focus on sustainability claims that are transparent 128
Figure 50: Industry players must focus on sustainability claims that are transparent 129
Figure 51: Industry players must determine the strategic approach taken to manage private label development 131
Figure 52: Private labelers must work towards reducing the perceived quality gap by offering something truly distinctive and/or standing for something 133


TABLE OF TABLES
Table 1: Consumer survey: agreement among shoppers that they are purchasing more private label products compared to one year previously, across 20 countries, by age and gender, 2010 24
Table 2: Consumer survey: agreement among shoppers that they are purchasing more private label products compared to one year previously, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 25
Table 3: Total private label grocery penetration (% of $ sector spend), in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2004-2014 30
Table 4: Total private label household penetration (% of $ sector spend), in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2004-2014 31
Table 5: Consumer survey: agreement among consumers that they are more conscious of getting value for money in light of the economic downturn, across 17 countries, by age and gender, 2009 37
Table 6: Consumer survey: attentiveness towards the changing prices of favored grocery products, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 39
Table 7: Consumer survey: attention given towards the changing prices of favored grocery products, across 20 countries, by age and gender, 2010 40
Table 8: Consumer survey: propensity to buy cleaning or laundry products on the basis of value-for-money, in 20 countries across Asia Pacific, Europe, the Americas and the Middle East and Africa, by country, 2009 and 2010 42
Table 9: Consumer survey: propensity to buy household care products on the basis of value-for-money, across 20 countries, by age and gender, 2010 43
Table 10: Consumer survey: changing importance attached to purchasing more private label products to save money in the previous two years, across 20 countries, by age and gender, 2010 48
Table 11: Consumer survey: changing importance attached to purchasing more private label products to save money in the previous two years, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 49
Table 12: Consumer survey: propensity to buy private label/store brand cleaning or laundry products in order to save money, in 20 countries across Asia Pacific, Europe, the Americas and the Middle East and Africa, by country, 2009 and 2010 51
Table 13: Consumer survey: propensity to buy private label/store brand cleaning or laundry products in order to save money, across 20 countries, by age and gender, 2010 52
Table 14: Consumer survey: perceived superiority/inferiority of private label household cleaning products versus well known or market leading brands, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 64
Table 15: Consumer survey: perceived superiority/inferiority of private label household cleaning products versus well known or market leading brands, across 20 countries, by age and gender, 2010 65
Table 16: Consumer survey: perceived superiority/inferiority of private label laundry products versus well known or market leading brands, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 67
Table 17: Consumer survey: perceived superiority/inferiority of private label laundry products versus well known or market leading brands, across 20 countries, by age and gender, 2010 68
Table 18: Consumer survey: agreement that private label household care brands are good alternatives to name brands, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 70
Table 19: Consumer survey: agreement that private label household cleaning brands are good alternatives to name brands, across 20 countries, by age and gender, 2010 71
Table 20: Consumer survey: agreement that private label laundry brands are good alternatives to name brands, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 72
Table 21: Consumer survey: agreement that private label laundry brands are good alternatives to name brands, across 20 countries, by age and gender, 2010 73
Table 22: Consumer survey: the importance of being seen with a desirable brand, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2008 and 2010 78
Table 23: Consumer survey: the importance of being seen with a desirable brand, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by age and gender, 2010 79
Table 24: Consumer survey: agreement that consumers are giving up some of their favorite brands to save money, across 17 countries, by age and gender, 2010 80
Table 25: Consumer survey: influence of the quality and quantity of private label brands on where consumers do most of their grocery shopping, in 17 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 87
Table 26: Consumer survey: influence of the quality and quantity of private label brands on where consumers do most of their grocery shopping, across 17 countries, by age and gender, 2010 88
Table 27: Consumer survey: satisfaction with the quality and quantity of private label brands where consumers do most of their grocery shopping, across 20 countries, by age and gender, 2010 90
Table 28: Consumer survey: influence of the quality and quantity of private label brands on where consumers do most of their grocery shopping, in 20 countries across Europe, Asia Pacific, the Americas, and the Middle East and Africa, by country, 2010 91



[Inhaltsverzeichnis ausblenden]