Retail Customer Experience: Five Ways to Win Back Private Label Switchers
Through a special arrangement,
presented here for discussion is a summary of a current article from Retail
Customer Experience, a daily news portal
devoted to helping retailers differentiate the shopping experience.
percent of almost 1,500 consumers recently surveyed by Epsilon Targeting said
they shifted to private label in both food and household products. A surprising
61 percent switched in personal care.
This move could indicate not only the fading
perception that purchasing store brands means sacrificing quality, but also
that consumers are becoming satisfied with the value of these alternatives.
Yet at the same time, Epsilon research shows national brands still wield influence:
in almost all segments, more than 65 percent of consumers said they would return
to their national brands, with a coupon.
For manufacturers of the nation’s
most enduring brands, this is a sobering shift, but they can rise to the challenge.
To recapture this shifting segment and, importantly, to prevent additional
brand switches, we offer the following suggestions:
1. Target the Former
Faithful: While more than 65 percent of those surveyed
said they would return to their national brand if given the right offer, that
means roughly 35 percent are not likely to switch. Marketers should first identify
those consumers who would return to their national brand and then target them
with coupons, samples and similar incentives.
2. Reward the Savvy Shopper: These
days there is less of a stigma associated with store brands, coupons and other
efforts to save money. This includes “image” categories
such as hair and facial care. In addition to using coupons and samples, manufacturers
can increase their consumer connections with “Savvy Shopper” clubs
and similar loyalty programs tailored to the shopper’s lifestyle. Such
rewards also potentially result in powerful word-of-mouth marketing.
the High-Risk Categories: Our research shows more consumers
are switching to private label in high-quality categories such laundry detergent
and diapers. Consumers make these decisions based on two factors: price and
quality. Manufacturers must use their data to identify these price-conscious
consumers and then target them with tailored promotions that emphasize the
quality and value of the product.
4. Use Food for Thought: The Wall
Street Journal recently reported that food prices will continue to rise,
meaning that the trend toward store brand foods will likely escalate. Using
this pricing knowledge, manufacturers can cross-reference those categories
with vulnerable pricing against the spending patterns of their best shoppers,
and then promote accordingly. This trend also presents an opportunity for non-food
marketers to develop cross-category promotions — “Buy
two cans of soup, get $1 off cold remedy.”
5. Channel Surf for Success: Access
to robust, actionable consumer data and shopper insight enables national brands
to identify what their best shoppers buy, where they buy it and when. Then,
they can use this intelligence to reach these shoppers where they are, applying
the “what, where, when” knowledge
across all channels, from direct mail to mobile phone. National brands have
the advantage of scale and can create a deeper emotional link with consumers
through the web, social media and other channels where private labels might
Discussion Questions: What should and shouldn’t national brands be doing to recapture any customers that have shifted to private label options? What strategies mentioned in the article will likely have the most impact? Which options are missing?