Battle of the Brands – The War Escalates

Illustration by John Ueland

Consultants Pat Conroy and Anupam Narula of Deloitte present this article casting Private Brands and National Brands in a battle to the death. The article includes suggestions for combating Private Brands which are equally insightful in growing Private Brands.

The Battle for Brands in a World of Private Labels

Janet glances at the items in her shopping cart and then at her grocery list, realizing that this is going to be an expensive trip. She wonders how much she could save by replacing more of her family’s preferred national brands with the store brands. After all, nobody noticed when she switched the canned vegetables, pasta, and ice cream. Her daughters’ breakfasting objections to store brand cereals subsided by the third morning. Similarly, her husband raised his eyebrows when she brought home store brand ketchup, sliced cheese and soft drinks, only to raise them even further when she described the price difference.

Nonetheless, the family held the line in the soft drink aisle. “I know times are tough,” said her husband, “but surely there’s another way to save.” Now, Janet only purchases national brand soft drinks during sales or in bulk.

In the next aisle, Janet’s neighbor David shuffles by. “What do you think of those store brand paper towels?” she asks.

“It’s all from the same tree and costs less. My family can’t tell the difference.”

“Probably true,” says Janet as she adds store brand paper towels to her cart. “I am open to saving a few bucks – it adds up quickly. The feeling that I am paying for advertising when I buy a national brand is tough to stomach in this economy.”

“My kids actually prefer the store brand frozen pizza. It’s funny because my mother always avoided store brands; if she could see us using these paper towels now …” David shook his head and they both laughed.1

The Battle for Brand Loyalty

Consumers like Janet and David are emblematic of store brands (or private label goods) gaining market share at the expense of national brands. Between 2006 and 2009, market share rose across 74 percent of products in the personal care, household goods and food and beverage categories in the United States, according to Information Resources, Inc.2 In 2009, store brands represented nearly 18 percent of consumer packaged goods spending and over 23 percent of CPG products sold.3

Many consumers increasingly sense a diminishing discrepancy between the quality of national brands and their private label counterparts as retailers sharpen their focus on store brands and garner loyalty, and consumer product companies cede connections to retailers and increasingly knowledgeable customers. Private labels represent 20 percent of grocery store and 18 percent of supercenter sales.4 Furthermore, store brand products were 31 percent cheaper across product categories than their national brand counterparts.5 Store brands are not just a recession related phenomenon – U.S. store brand sales continue to grow over the long run despite improving economic conditions.6

The following recommendations may help consumer product companies to navigate this changing environment:7

  • Be a brand that the retailer cannot be.
  • Be irreplaceable.
  • Shed homogeneity.
  • Create a retailer-specific product portfolio.
  • Make me-too strategies an onerous path.
  • Stop reckless promotions.
  • Leave retailers bricked and mortared.

For retailers, the challenge is to anticipate and counter these consumer product company actions.

Read the entire article.



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Christopher Durham
Christopher Durham is the president of My Private Brand and the co-founder of The Vertex Awards. He is a strategist, author, consultant and retailer who built brands at Delhaize-owned Food Lion, and lead strategy and brand development for Lowe’s Home Improvement. He has consulted with retailers around the world on their private brand portfolios including: Family Dollar, Petco, Staples, Office Depot, Best Buy, Metro (Canada), TLW (Taiwan) and Hola (Taiwan). Durham has published five definitive books on private brands, including his first book, Fifty2: The My Private Brand Project. In 2017, he will debut his newest book, Vanguard: Vintage Originals, a visual tour of innovation and disruption in private brand going back to the mid-1800’s. Dynamic in his presentation while down to earth and frank in his opinions, he has presented at numerous conferences, including FUSE, The Dieline Conference, Packaging that Sells, Omnishopper and PLMA’a annual trade show in Chicago. Durham lives in Charlotte, NC with his wife, Laraine, and two daughters, Olivia and Sarah.