Private label is growing. Walmart, Target and Safeway and even 7-11 are just a few of the big guns that have invested heavily into their own store brands. These labels are differentiated and taste good. Gone are the days of cheap black on white packaging or a lack of cache associated with a store brand – today, in the age of a recession – private label is de rigeure. These products deliver on functionality and are now building emotional ties with consumers during a difficult time. What implications does this phenomenon have for mainstream brands – can mainstream brands remain competitive throughout the recession and thereafter?
Mainstream brands are eroding but will never go away they are simply being redefined to include brands that have not traditionally been well promoted. This is a fight for share of heart and private labels can use these tough economic times to its advantage touting value in product quality and in price. What is deemed an acceptable brand will be those that deliver on the brand promise and in the case of packaged goods, quality, taste, performance. We are moving towards the mantra of if it’s good they will come. New emotional ties will be developed with these private label brands and mainstream brands will have to try harder to retain that emotional connection that sacrifices price for perceived value and differentiation. Since private label brands are now about more than simply price, there is emotional resonance and loyalty.
The good news here is that the renewed acceptance of private label brands will push mainstream brands to keep it honest and to stay on the forefront of innovation in order to justify price differentials. This increased competition for share of wallet and mind will ring with greater authenticity and values for consumers.