As I meander through my local supermarket, it’s not hard to
understand why we’ve been hearing about the hype around private label
products taking the place of other branded products. The national brands
in this country have been called to task – innovate or be pushed out by
the hand that has fed them for so long, the two giants of the
Australian grocery landscape.
Private label, or store brand as it is sometimes known, is flooding the already competitive aisles of our supermarkets. This already cluttered space over the past decade has seen most categories offer more choice, but has not seen a great deal of variety or innovation. Products that remain stagnant will die or become unsustainably cheaper from pressures seen from the private label products.
This vertical integration from the supermarkets means products that people perceive to be the same quality can be up to 30% cheaper than national branded items. At the start of this year, one quarter of what we buy is private label; some predictions see it rising as high as half.
There have always been cheaper products on the shelves, but why is it coming to a head now?
A recent industry survey studied the buyer behavior of women. The study showed 70% of women are making purchasing decisions on price. A similar amount of those surveyed stated they believed the private label brands are the same quality if not better than other branded products.
The private label brands are gaining brand equity in the marketplace.
The trick is to innovate your brand offering. Ensure your product is on brief for what the consumer wants. Some examples that have made a huge difference in sales have been things like Dettol’s no touch hand sanitiser. The customer doesn’t want to use dirty soap, so the hands-free sensor strip was a huge success with purchasers.
Campbell’s Real Stock employed a ‘less is more’ attitude, by developing individual sachets, which gives smaller households the benefit of a smaller portion. Letting buyers feel they are less likely to waste had a huge impact on decision making at the point of purchase.
Another successful innovation was launched earlier in the year by Uniliver. The new Lynx Anarchy offering was the first unisex product by Lynx. Backed by a social media and in-store campaign, it offered a ‘his and hers’ variety which has proven to be a successful reinvention of the product.
The days are gone where the reinvention of an offering was done by rebranding and repackaging the same product and labelling it as being ‘bigger, faster, longer-lasting or tastier’. The brand must see real innovation to evoke emotion with the shopper and gain their attention.
As private label market share increases, it’s up to brand manufacturers to be innovative and in line with the consumer’s needs. The flipside will be an even tighter duopoly.
General Manager of Marketing and Commercial