Lower-Price Private Labels on the Grow

Private-label goods were once viewed as lower-quality knockoffs. But that stigma has largely disappeared, a reality reflected in two recent consumer surveys – one by RD Solutions and the other by First Insight.

The RDSolutions study found that more than 86% of the consumers surveyed buy private-label versions of some or most of the products they regularly purchase. Among those who buy private label, 75% say store-brand products are as good as or better in quality compared to national brands.

Other survey results include:

• 42% opt for cheaper alternatives when prices rise;
• 20% skip certain items altogether;
• Only 11% stick to their usual brands regardless of price.

“These findings highlight just how central price has become to shopper loyalty—both to retailers and brands,” said Lee Kallman, Chief Commercial Officer at RDSolutions. “Economic headwinds like inflation and tariffs are accelerating changes in consumer behavior. Retailers and manufacturers who don’t respond quickly risk losing share.”

The First Insight study, meantime, focuses on what it calls private labels’ “quiet takeover” of the marketplace.

Among the survey findings backing that assertion:

• 72% of consumers were unable to correctly identify a private label product when shown side-by-side images of store brands and national brands.
• 84% of shoppers now trust the quality of store-brand products more or the same as national brands.
• 47% have tried private label products specifically because they were dupes of name-brand items.
• 45% of consumers say they’ve permanently switched from a national brand to private label when the product met or exceeded expectations.

“Shoppers aren’t loyal to brand names the way they used to be. They’re loyal to price, quality and marketing. This creates a highly competitive arena where the best – yet not necessarily the most well-known–brands will win,” said First Insight CEO Greg Petro. “When a national brand stumbles, it opens up an opportunity for private labels to grow their market share—but only for those with products that feel intentional, well-designed and trustworthy. Consumers will let you know exactly which ones those are. You just have to ask them.”

Click here for more from the RDSolutions survey and here for more from that by First Insight.