Brand Loyalty Bygones?

brand-name-and-generic-cereal-590On a recent shopping trip to Target, I peered in to my cart and noticed there were very few true “name brands” represented within. From Archer Farms salsa to Market Pantry oatmeal to Up & Up diapers (the latter of which are a full TEN DOLLARS cheaper than Pampers!), I have pretty well completely converted to the red retail giant’s house brand products.

A quickie survey of friends & colleagues revealed my behavior isn’t an anomaly among my contemporaries. Everyone I talked to uses a number of different store brand products, with few, if any, quality complaints (mac & cheese was one of a few products that caused noisy splits among the sample). Indeed, store brands have come a long way since the glaring black & white-packaged “generics” I vaguely remember from my youth.

If my mini-sample of higher-income professionals is any indication, it seems that the assumption that higher price means higher quality is fading.

The Great Recession brought with it new opportunities for retailers to appeal to consumers who grew increasingly eager to save on everyday purchases. During this time, the quality and the aesthetic appeal of store brands increased about a billionfold. Target’s Archer Farms package designs reflect a high-end product, and Cub’s Essential Everyday line is clean and attractive. More important, though, the products work well and/or taste comparable.

For the most part, consumers have been impressed by the no-name brands, with many of them rating highly in blind taste tests. Consumers have also learned that many “generic” store-brand foods are actually made by the same companies that produce the higher-priced name-brand stuff (just compare the ingredient label, as I did with baby formula last year. Identical.). Often, switching to a store brand is an easy way to save 30% or so, according to my own quickie calculations and the estimates of friends. And, because store-brands can be more profitable than national brands, Big Boxes have been granting them more shelf and ad flier space.

According to a new “Private Label” report from the Integer Group, there are a few key behavioral patterns when it comes to consumers and “generics”:

Women give more consideration to buying store brands. Most shoppers, about 77%, scope out both private-label and name-brand products before making purchases. But women are far more likely to compare — 90% look at both options before choosing.

When the cleanliess of their clothes are involved, people are picky. Beyond mac & cheese, of the eight product categories covered in the study, consumers think brand names are most important when it comes to laundry detergent: 69% prefer name brands.

(In my own study, respondents cited “toilet paper” as something not worth compromising on.)

Coupons and sales do help boost name brands.  Of those who stick with name brands, 45% say they do so at least partly because they can find coupons to save money. Long live the Redplum Sunday coupon flier!

A minority of people assume a brand name means top quality. This is the biggest, and for Proctor & Gamble, perhaps the most foreboding news from the study. In 2010, 57% of consumers agreed with the statement “Brand names are not better quality.” More recently, the figure is 64%.

If the alarms aren’t sounding at the HQs of General Mills, P & G, J & J and others, they certainly should be.

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