In the ongoing stoush about consumers buying “home brand” or “private label” products an article this week caught my eye – well, mostly, the title caught my eye.
The title of the article was “Where the brands have no name” and seemed to suggest that consumers are swapping established “brands” for “no-name brands” – except nothing could be further from the truth.
To start, last time I looked, those “home brand” products do have a name on them — the name of the parent (aka Coles, Woolworths). And I would argue that represents a far bigger, more prevalent “brand name” than those on other products. “Brand names” that have physical locations, people you see and interact with, massive advertising budgets to convince us to buy from them and unmatched scale and distribution (just to name a few elements that go into making up their “brand”).
Overall, I think the suggestion that consumers are abandoning “established brands” presents a fundamental misunderstanding of these more complex dynamics at play.
There is a price factor going on. And it is no surprise that the products performing best in the “private label” category are everyday staples where people are more likely to buy on price, and that “everyday saving” promise has become another key part of the promise. But if the product being sold was a significantly lower standard then the promise of cheaper price wouldn’t be having as much impact.
There is an improvement in the packaging and presentation of the products. Today they more closely mimic other products, removing much of the stigma they used to have. Part of this is the elevation of terminology from “home brand” or “plain brand” to “private label”, which sends a completely different message about the nature of the products.
There is a distribution advantage happening. When you own the shelf space, choosing what to put there and where to put it becomes yours to decide. And why wouldn’t you choose to put your own products front and centre and limit other choices, increasing the likelihood that people will buy yours?
There is so much more going on than “consumers jumping ship”.
I have long maintained that “brand” is held in the organisation and that products are simply carriers. So the growing adoption by consumers of these products really comes as no surprise to me.
Is it a good or a bad thing? I’ll leave the politics of that discussion to others.
I’ll be taking a short break (just a month) from my blog here, so while I’m away you’ll be reading a few blogs from the archives that I’ve handpicked for you. See you in September with lots of new thinking to share.
Michel is an independent adviser and advocate dedicated to helping organisations make promises they can keep and keep the promises they make – with a strong, resilient organisation as the result. She also publishes a blog at michelhogan.com. You can follow Michel on Twitter @michelhogan.