Quality of store brand products drives loyalty

What this means: Store brands are primed to welcome shoppers during the remainder of this year and beyond, partly because of all of the work retailers have done to shed the “generic” perception of private label items. Store brands clearly cater to consumers’ need for increased value at retail this year and can deliver on that promise in a way that no longer feels inferior. U.S. consumers still lag behind other markets in total adoption of private label, but we may be entering a cycle of higher store brand purchasing due to increased and better offerings and lower prices. By August 2022, consumers were already seeing and feeling the impact of higher prices and lower inventory; 62% said some products were already too expensive for them to purchase, according to a new global study from Salsify. The study found rising prices have impacted consumer behavior. Globally, 96% of consumers said that rising costs influenced how they shopped in several ways. For example, in the latter half of 2022: 73% looked for discounts or free delivery. 71% bought less or delayed large purchases. 68% compared prices across several retailers. 52% checked for digital coupon codes. 51% spent more time researching products and prioritizing a product’s quality when making their selection. 17% purchased store-brand products. Private label grocery Consumers equate cost savings with store brand or private-label products. Globally, 63% choose private labels because of their low prices, and shoppers also are willing to buy store brand products in most categories. Commodities, such as groceries and cleaning supplies, are often the most vulnerable to being replaced, Salsify’s study said. In particular, 96% of consumers globally buy store brand groceries. Nearly a quarter (23%) of Americans said they “always” buy store brand groceries, with an additional 73% who said they consider it depending on price and availability, Salsify reported. In comparison, 27% of shoppers globally indicated that they “always” buy store brand groceries. Shoppers in Germany, France, and Great Britain were slightly more likely to “always” buy store brand groceries than U.S. consumers. In the U.S. the top two reasons for buying store brand groceries was a lower price (58%) and the belief that the store brand’s product quality was equal to the branded option (54%), Salsify found. Globally, lower price also was the top factor for choosing the store brand. However, in Great Britain, Germany and Australia shoppers were slightly more likely to choose store brands because they liked the product itself instead of citing comparable product quality. Store brand cleaners and cosmetics When it comes to household cleaning products, 20% of U.S. shoppers “always” buy the store brand, with an additional 70% who will consider it depending on price and availability according to Salsify. Looking at worldwide data, U.S. consumers are slightly more loyal to cleaning product brands. Globally 25% of all consumers “always” purchase the store brand, with an additional 67% who will consider store brand cleaning products depending on price and availability. In the U.S. and around the world, low price outweighs low availability for the reason that shoppers choose store brand cleaning products, Salsify found. By country, the U.S. had the lowest percentage of respondents who said that they always buy store brand cosmetics and personal care products — 14% answered that way. The global average was 16%, and 19% of Germans said they always buy store brand cosmetics. Only 74% of Americans say they ever buy store brand cosmetics and personal care products, compared with an 80% global average. In Germany, 88% of consumers would consider buying store brands in this category, Salsify reported. Globally, including the U.S., the top reason consumers purchased store brand cosmetics and personal care products was lower prices. Quality and value The importance of store brand product quality came up in Salsify’s survey — 48% of shoppers said they would purchase a store brand item when they could be assured the product quality would be equal to the branded option. “This is consistent with what we heard overall about what consumers see from the brands they remain loyal to — 81% said it was product quality,” Cara Wood, Salsify’s head of research, told Retail Leader Pro. The answers Salsify received about the top three important features of a product page — product description, customer reviews and product images — also fit into this narrative. “Consumers want to know exactly what they are buying, get the validation from other shoppers that it was good, and then see quality images — all before clicking the buy button, Wood said. Incorporating value into the equation, 68% of consumers said they compared prices across retailers in the last 3 months, and 62% said they are seeking more discounts because of rising prices, Salsify reported. “It’s a competitive environment, and shoppers have the capability to easily compare pricing, so you can’t compete on low prices alone,” Wood said. Confidence that a product is quality is something consumers will pay more for as well — 63% said they would spend more on an item if it got better reviews. Half say it’s worth spending more for two similar products if it’s a brand they trust, Salsify reported. “It’s absolutely critical for retailers to be communicating a product’s quality throughout the sales cycle,” Wood said. “Our research shows that consumers are comparing across retailers and wary of any low-res images or product descriptions that may seem counterfeit. Retailers should prioritize using the brand images and descriptions directly from the source — the brands themselves.” Providing a consistent set of product information across every touchpoint for an omnichannel shopper is also very important for retailers. “Our research found that shoppers are turning to a mix of in-store, online, mobile app and even virtual reality options to browse and buy,” Wood said. What’s next: As private label gains popularity during the next year, it’s important to look for opportunities to expand category coverage for retailers. Certain items like canned goods may be easier for consumers to swap out, but for others retailers need to be creative in showcasing value and quality to shoppers.

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