Own brand strategy trumps NBE, Daymon analysis findsJanuary 29, 2018
Drug Store News | January 29, 2018 – With 81% of shoppers now buying private label products on every or almost every shopping trip, it’s no surprise that own brands are positioned to disrupt the industry.
“Private brands have entered a renaissance period that has allowed them to become more differentiated than ever before,” Jim Holbrook, CEO, Daymon, said. “We are seeing that retailers with distinctive, one-of-a-kind private brands will survive and thrive, while those with national brand equivalents will struggle as competitive pressures mount.”
The Stamford, Conn.-based retail analysis firm on Monday published its first-ever Private Brand Intelligence Report, providing a “State of the Industry” benchmark analysis on how private brands stack up against national brands based on proprietary survey data, category research from Daymon analysts and insights from experts under the Daymon umbrella.
And 2017 was a pivotal year, the report noted, as many retailers invested in their private label programs to deliver true differentiation, not just mere imitation. That may be one of the bigger reasons behind the success of Kroger’s Simple Truth, for example, which earlier this month reached a $2 billion benchmark in own brand sales.
According to the report, 85% of the 2,000 shoppers surveyed trust private brand products at least as much as national brands. Reinforcing that consumer trust in private label is the fact that store brand sales have increased by 4%, or eight times more, than national brand sales.
And expect that gap between national brand growth and private label growth to continue to expand. According to that survey, 74% of consumers believe store brands today provide the bigger bang for the buck, with 61% attesting to the improvement in quality across own brand selections. More than half, or 53% of shoppers, specifically look for a private brand option before making a purchase.
“Shoppers today are looking for ways to be disloyal,” Holbrook noted. “They aren’t interested in seeing the same thing; they are demanding better service, selection and experience.”
The most significant pocket of opportunity might be health and wellness, according to the report. It’s the fastest growing segment within private brand and in 2017 was marked as a $3.7 trillion opportunity globally.