Q&A: Shoppers Back Away From Private Labels

Pat-ConroyAmericans have turned into grocery-store Ninjas, and new research from Deloitte shows that in a typical shopping cart, fully 7 out of 10 of their items are discounted. But as consumers continue to intensify certain types of deal-seeking behaviors, such as having precise price limits for certain brands and items, they’re losing interest in others, including private labels. Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader, puts it into perspective for Marketing Daily.

Q: Consumers backing off private labels is big news: Your new research finds that 49% say they are no longer interested in store brands. What gives?

A: When the recession started in 2008, people looked for many ways to cut costs. Even last year, they were still going through this process of discovery, saying 'I’m trying new products and not having bad experiences.’ They enjoyed experimenting, and liked the money they were saving. And they felt those brands were as good or better than name brands.



Now they know what they like. Nine in 10 say they have already figured out which store brands and private labels work for their families, and which ones don’t.

Q: So what are they experimenting with now?

A: They’re through experimenting. Last year, they were still writing lists in pencil. Now, it’s in ink. And since they know what works, they can focus on what is most important to them, which is time. Shoppers are trying to become more efficient. Yes, they want to be frugal, and they’ve gotten very good at that. Now they want to recapture some lost time. That was a main driver before the recession, and they are returning to that.

Q: So they are less focused on price?

A: In some ways. They’re saving money by knowing exactly what they want before they walk into a store. They do expect deals. But the presence of deals in the store seems to be more important than the depth of the discount.

Q: What are they focused on?

A: Sport. They are proud of themselves, with 75% thinking, ' I am a smarter shopper than I was a year ago,’ and they see themselves as competing against stores and brands. They become emboldened, energized, and enthusiastic.

For example, 80% do their own research and have a predetermined price point. And 66% shop when they know products will be on sale.

Q: So how can stores work with that gaming mindset?

A: Give the shopper more. We also just did a study on mobile technology, and as customers become more comfortable with smartphones, retailers will be able to give them bundles of information while they’re in the store.

That’s so important, because consumers have become increasingly deaf to brands and offers. I call it the crisis of the similar.

Q: What do you expect in the months ahead?

A: With this skilled a shopper, I think this holiday may be a bloodbath. People know they can wait out the retailer and manufacturer. Someone will blink.

Q: When will consumers relax this shopping vigilance?

A: They won’t. This recession left a scar, not a bruise. Retailers and marketers had better get their heads wrapped around it. It’s not going to change.

1 comment about "Q&A: Shoppers Back Away From Private Labels".
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  1. Promoaid Llc from PromoAid, November 23, 2011 at 11:40 a.m.

    With 80% of shoppers on average doing their research before they head to their local store, it's clear the digital technology explosion will be around for a while.

    Thinking Mobile is smart, as you're grabbing attention where the eyes will be. With Mobile, and other nontraditional marketing programs, it's a good idea to partner up with a supplier that specializes in your niche of choice. This way, your program is activated in the right manner, and goals are met.

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