Page 18 - Sphere No.24 (Mar 2009)

16 SPHERE
WITH CONSUMERS CONCERNED about the global economic situation,
many are reconsidering which items are necessities and which are frivoli-
ties when they shop. Brands now have to prove their worth in order to
make it into the consumers’ basket. This has created tremendous opportu-
nities for retailers’ own and private label brands to grow their market share.
According to the YouGov’s Recession Tracker which took data from more than 2,000
consumers early this year, more than four in 10 people are increasingly switching to re-
tailers’ brands, indicating that value for money is at the forefront of consumers’ minds.
The rise of these products – private labels are retailers’ brands they manufacture and
sell, own brands carry the name of the retailer – cannot be attributed solely to the good
value they represent, however. Quality is also extremely important. The US-based Private
Label Manufacturers Association said recently that private labels are emerging as an in-
novating force, “enhancing the retailer’s image and strengthening its relationship with
consumers.”
In the past, the quality of retailers’ private label products may have been con-
sidered not as good as named brands, which were perceived as more ad-
vanced. But the tightening of household budgets means that consum-
ers are more willing to try new products, particularly when they
realise that the quality is similar.
Nielsen reported that private label products are now
viewed positively by the majority of US consumers. In
a recent survey, nearly three-quarters (72 per cent)
of consumers believe they are good alternatives to
named brands and 62 per cent consider them to
be as good as named brands.
The survey indicated that an improved sense
of quality is a key factor in consumers’ posi-
tive attitude towards private label products;
63 per cent believe private label brand qual-
ity is as good as named brands and 33 per
cent say they consider them to be higher
quality than named brands. According to
the survey, price and value are paramount
– 74 per cent of consumers believe it is
important to get the best price on a prod-
uct and 67 per cent agree that stores’ own
brands usually provide extremely good
value for money.
Tom Pirovano, Director of Nielsen’s In-
dustry Insights, wrote in the report Private
Label: What’s really driving private label
growth? “Private label offerings have evolved
from the cheap alternative to national brands
into distinctive, high-quality products with a
unique value proposition that retailers strategi-
cally deploy to enhance the image of their store.
Retailers are leveraging private label to entice
picky consumers and shore up sales.”
Private labels and own brands have a significant
The Collagen
skin care range
is flying off
the shelves,
particularly
in Mainland
China
BE A U T Y
✔SKIN CARE