Since I began this blog late last year it has provided all sorts of interesting opportunities, the following post is a result of one of those opportunities. After being contacted by several individuals from Daymon Worldwide and having several interesting conversations about the state of Private Brand and its evolution I invited Alex Miller, the president of Daymon, to write a guest post. Less than a week later, I was pleasantly surprised to receive the following post. Alex has some great thoughts on private brand, the economy and consumers.
We have all been reading in the press over the past several months about how private brands are doing well in the current economy. And while for the most part they are all positive stories about the growth of private brands, I notice there is a common “sub theme” in all of this coverage – and that is that the consumer is “trading down” … trading down to private brands when they are in the supermarket … And I just think that is an erroneous assessment that stems from a general lack of understanding of the private label business and private label products.
The same newspapers and TV broadcasts that are running stories on how consumers are supposedly “trading down” in the supermarket, are also writing and talking about how consumers are becoming SMARTER shoppers when it comes to mortgages … and how they are no longer OVER-BORROWING … and how when they refinance at lower interest rates these days they are not squandering their monthly savings this time around … rather they are saving it or investing it … the story goes that they are BEING SMARTER with their money.
Same thing in the auto industry. We hear every day how consumers are buying hybrids and fuel-efficient vehicles … and that they are no longer buying SUVs and big gas-guzzlers. But nobody thinks of that as “trading down.” They call that “buying smart.” And I agree. None of us are going to put our families in cars that are not safe, or do not offer a good value for the money.
Yet every time I hear an analyst talk about what is going on in the supermarket … or read a story about the retail industry, at the very top is the mention of how shoppers are “trading down” to private brands in this difficult economy. And that’s where I have a problem. The real story is that people who are buying private brands in their supermarkets are not “trading down” … they are BUYING SMARTER. If you buy a Wegmans Brand basting oil you are not “trading down” from anything – in fact you are probably trading up, and at the same time you are getting a great value … so you are SHOPPING SMARTER. If you go into Kroger store and by a Private Selection sorbet … or into a SUPERVALU store and purchase a Wild Harvest frozen organic pizza, or into a Stop & Shop supermarket and pick up any Simply Enjoy or Nature’s Promise item you are not “trading down” from anything the national brands have to offer. You are buying equal to or better-than-quality products and you are getting a great value. That is all about BUYING SMART.
The recession is NOT driving consumers to “trade down” in quality … the recession is motivating us all to be SMARTER CONSUMERS. And private brands are a very important part of being a SMARTER CONSUMER.
History has shown us that private label sales increase much more precipitously during a recession than they decline in a recovery. That’s because private label wins people over. Analysts from all walks of life and business are saying that this recession will be the most historical ever because it will change the way people live and shop long after it is over. I believe that. And I believe that more and more people will be enjoying the value and quality of private label without “trading down.”
Alex Miller is the President of Daymon Worldwide the international private brand consumer events company based in Stamford, Connecticut. He has worked in grocery and private brand for more than 30 years. In 2007 Alex was named President of Daymon Worldwide, becoming only the second President in the history of the company.