Shoppers are converting from Branded products to Own Label products
Our previous blog post discussed how shoppers are concerned about rising prices, it appears that shoppers may be attempting to counter this by converting to own label products. Shoppers are already moving away from branded products and they expect to be buying more own label (value and standard) products in the next 12 months. But they are also forecasting to buy less OL premium products, however, these still remain a threat to branded products.
Generally, the majority of shoppers feel as though they spend the same amount of money on each category as they spent on that category last year. However, for those who think they are spending a different amount to last year; 36% feel as though they are buying less branded products now than they were 12 months ago. Whereas, 31% of shoppers think they are buying more OL value and standard products than last year. Also, 20% of shoppers feel as though they will continue to buy more OL value and standard products in the next year…
Differences are seen amongst OL premium products… 20% of shoppers are actually spending less on OL premium compared to the last 12 months. Despite this drop, it is still not as much of a decrease as the 36% of shoppers who are now buying less branded products. Shoppers must be swayed by their brand-like qualities at OL prices!
This pattern continues into the next year; as 25% of shoppers think they will be buying less branded products again in the next 12 months. Whereas, only 14% of shoppers think they will be buying less OL premium products to what they are now.
It has also been found that shoppers with the highest income bracket (£71K or more) are the most likely to consider buying more branded products over the next year. Which implies other shoppers may be avoiding branded products due to the price.
Should brands be threatened by private labels…? Only recently, Checkout Magazine revealed the annual changes to the top 100 brands (in Ireland), and there were assumptions from Irish times* that some brands are not performing as well as last year, due to OL products out selling them…
…It seems as though Shoppers are stepping away from Brands and moving towards Own Label. What can brands do to keep their customers loyal?