Cheap Is Not All That Matters To Consumers
Retailers are increasingly getting into manufacturing by offering own-label brands in-store, allowing customers to buy cheaper products without compromising on quality. It seems, however, that despite the recession which has eaten into household budgets, customers don’t just consider the price when choosing between products.
This morning I read a study by market information firm SymphonyIRI Group, which showed that private-label products are on average 26% cheaper than similar manufacturers’ brands in the UK.
In recent months, retailers across the country have been taking measures to become more innovative and creative when it comes to new product development and packaging in an attempt to draw more customers. They are also turning to social media and dedicated private-label websites to promote their products. The segment’s indisputable growth proves that private-label production is making a difference in the retail world, as it gives market players the opportunity to introduce something new that is not present on rivals’ shelves.
However, despite own-label items’ more competitive pricing, the researchers did not find a strong correlation between price and sales in all product categories. It turns out that the choice between private-label products and national brands has more to do with consumers’ individual tastes and preferences. When it comes to buying health and beauty products, for example, people tend to choose their favourite toothpaste brand without bothering to think about the price. And in a niche category such as ketchup, the majority of consumers will always remain true to their favourite brand.