Brand matters, but not like it used to

The continued ascent of private brands seems assured at this point in the economic recovery, in part because of a belief that consumers will maintain their newfound frugality when the economy improves. However, there is also the issue that brands, private or otherwise, have become harder to define, and the distinction matters less to consumers anyway. Anecdotally we know this to be true based based on actions by Target, and other retailers, to upgrade and more aggressively promote private brands, but hard data exists as well.

The Private Label Manufacturers Association noted recently that store brands in U.S. supermarkets reached a record 23% penetration rate in 2009 and that total sales of store brands surpassed $85 billion in supermarkets, drug stores and mass merchandisers. PLMA contends that rather than a temporary effect of the current economy, there are clear indications that retailers are winning new adherents to their brands -- even among die-hard national brand loyalists -- as more and more shoppers give them a try and find satisfaction with the high quality of the products. The trade group is scheduled to hold its annual show in Chicago Nov. 15 to 17, and even though trade shows in general are suffering from poor attendance, PLMA expects to draw 4,500 visitors and roughly 1,800 exhibits.

In advance of that meeting, The Hartman Group has complete a major study exploring consumer perceptions of private brands which documents what was already suspected. “Today’s retailers have become increasingly sophisticated with their private label offerings to the point that many consumer simply consider them on par, if not better than, many iconic national brands,” according to the study. “Because private label brands have more flexibility in the innovation department -- the freedom to develop endlessly without worry of offending long time loyalist -- they have seized the opportunity to jump ahead in critical areas such as ingredients, flavors, preparation and even packaging.”

Hartman’s researched revealed that consumers oftentimes don’t know that a retailer’s private brand, be it Target’s newly launched Up & Up or Walmart’s Equate, is not a national brand.