Consumers reluctant to switch to private label for pet and kids’ products

Posted by Daniel Palmer on 15th July 2009

Frugal American consumers have jilted their favorite national brands for food, household, health and personal care products but are far more reluctant to switch to store brands on purchases for children and pets, according to the latest research from North American targeted marketing firm ICOM.

ICOM’s May survey of 1,530 American consumers reveals how the threat of exodus to store brands varies by category. The following data shows the percentage of consumers in each category who have switched to store brands and away from national brands in the past six months:

* 59% for food and household products;
* 48% for health products;
* 48% for personal care products;
* 23% for pet care products;
* 12% for child care products.

“Perceived risk, that’s what is driving these key consumer decisions. This is the kind of insight that national brands can use to reach customers with promotions that meet their needs and bring them back,” said ICOM Marketing Director Warren Storey. “These results highlight that understanding customer psychology, and tailoring promotions accordingly, is a significantly more effective win-back strategy than scatter-shot, one-size-fits-all offers.”

There have been signs in developed economies that the proliferation and sales growth of private label goods has begun to ease off and ICOM believe national brand owners should now be making moves to claw back any share they have lost.

“The good news for national brands is that there is, in fact, an opportunity to win back customers who have switched. Some marketers were worried they’ll never return. But the win-back depends on knowing who is switching and why, and responding with targeted incentives based on that strategic information,” Mr Storey advised.In another sign of the times, survey respondents made it clear that customer loyalty rewards supporting basic household purchasing are the most appealing. That means groceries and gasoline. 70% of respondents said they’re interested in getting rewards at the grocery, 60.7% said gasoline. No wonder a number of supermarket operators around the world have entered the petrol retail sector.