Consumer products marketers have spent plenty of time and money distinguishing their brands. But the Great Recession changed the shopping habits of consumers who were driven to purchase only on price. While many marketers expected consumers to return to their favorite brands as the economy improved, new research shows that the purchase process may be more complicated.
As the recession fades, at least 2/3’s of recently surveyed shoppers are still buying store brands. It’s not that these shoppers don’t want the brands being promoted by CPG marketers. For many consumers, price is the issue. A new survey from Accenture shows nearly all, 87%, of shoppers would buy name-brand CPG products if the price was the same. For half of these shoppers, a switch back to name-brand products would require a permanent price change. And, a more ominous threat for CPG marketers is found in shopper predictions for the future. About 77% say that even if their income levels recover, they’ll stick with store-brand products.
Shoppers have concluded that there is little different between name-brand and store-brand products. Only 9% of shoppers agree that name-brand products are of superior quality. This state of affairs is a serious threat to the market for name-brand products. Bob Berkey, an Accenture Consumer Goods & Services practice spokesperson says “Consumer goods companies must develop a balanced strategy of collaboration with retailers in some areas and competition in others.” Now that consumers believe price, selection and trust for store-brand products rival or exceed that of name-brand products, CPG marketers must find new ways to connect with consumers and restore loyalty.[Source: Accenture Study Finds Store Brands. Accenture.com. 10 Jul. 2012. Web. 8 Aug. 2012]