Reinforcing brand value in the rise of the threat from own label

 

Thought piece:

Reinforcing brand value in the rise of the threat from own label

Kelly Chandaria, Planning Manager

It’s not new news that as a nation we’re becoming savvier with our spending – whether that be because we must due to squeezed incomes and inflationary costs, or because we’re more clued up on the value of products and when there will be a promotion on. The reality is the retail landscape has changed, and particularly so in grocery.

Discounters and grocery retailers are rationalising ranges to focus on fewer brands and more own label sales. Supermarkets are now offering cheaper own label versions in nearly every category, from breakfast cereals to after-dinner chocolates and condiments. They’ve capitalised on a growing shopper trend and realised that it brings in more margin.

What’s more, with an increased public spotlight on brand comparison (including retailer own brand) through TV shows like ‘Shop well for less’, the nation is becoming more educated on what they should look out for when grocery shopping. They’re nowtrained not to shop on assumptions based purely on price i.e. a higher price doesn’t always mean a superior quality product.

As a result, shoppers are becoming more accepting of unknown brands and private label. This is forcing many FMCG brands to rethink their shopper marketing strategies to ensure they get the all-important sale at the point of purchase.

It’s no longer enough to just leverage a price promotion to entice a shopper to buy your brand over another – in some cases own label or products from the discounters are cheaper still and  the competition is also on promotion. In fact, the number of promotions in supermarkets fell to a 10-year low last year[1] and retailers and brands are replacing these short-term tactics to drive sales with a focus on campaigns that encourage shoppers to believe in the brand based on product and brand merits.

You have to prove your brand has one-up on an own label product through a clear and compelling reason to buy. Shoppers have to believe the value they are getting from choosing your brand outweighs the expense. Value, in this situation, can mean a solution to a problem, added value to a shopper or their family’s lifestyle or even gratification from the product itself.

[1] Marketing Week ‘Discounts disappearing from supermarket shelves as promotions fall to 10 year low’ Aug 2017

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