Private label and the savings addiction…

When I was a kid my mother used to buy the cheapest private label cornflakes she could find and serve them up as the real ‘Kellogg’ thing by putting them in nondescript plastic cereal containers. Even as a kid I knew I was being served an inferior product – and if I had any doubt, breaking a tooth on the gritty, overcooked grain confirmed the switch. I swore when I grew up that I would never betray my favourite brands for a few cents, my family would never eat inferior brands.

It’s a promise I kept for many years. Then the GFC hit and I fell under the spell of the private label. Guess what, no gritty bits. In fact acceptable quality and lower cost – the perfect partners. Very quickly saving money became a weekly goal and its achievement delivered  huge satisfaction in its own right.

It seems I was not alone.

My thanks go to the folks at Australian Food News article and a recent report from Datamonitor research that shows my savings addiction is in fact an epidemic. In the research at least 1/3 of Australians reported buying private label products to save money either ‘most of the time’ or all of the time over the past year, peaking at 44% in May 2010. Added to that the survey found that many Australian consumers believe private label brands are comparable to well known brands in terms of quality (50% for cleaning products for example).

As well as striking a chord with me as a consumer this trend also resonates in my professional life. If the consumer (god that’s me) is being bewitched by price and satisfied by the quality they receive from private label,  brands need to act now to reverse the trend. Competing on price may be a short term fix but in the long term is unlikely to be sustainable. As an addict I can tell them they’ll need to have do some work to win me back.

A starting point is to go back to basics and revisit the brand from the roots up. Have a go at redefining the brand for the new world economic conditions, is the brand storytelling still attracting the consumer, is the brand voice still contemporary and attractive, is the brand design doing everything it can, does the value proposition still have appeal.

Truly Deeply is a Brand Agency that works with numerous brands, to deliver brand strategy and brand design, with the objective of differentiating those brands from competitors, both private label and branded competitors. If you’re feeling like you need to take a good look at your brand to better protect it against private label why not give us a call.

Malcolm Harvey
Brand Saviour and savings addict.

7 Comments

  1. Interesting article Mal. I’ve been watching the advance of private label in Australia in comparison to it’s quite different relatives in Europe. The European model is based on a new product development, packaging design, category innovation mind-set, where-as the private label industry ion Australia is dominated by a ‘mimic the market leader’ mentality. Even the packaging design for one of the big two supermarket private labels is a direct steal from the Tesco private label brand identity system. One model gives the customer more, the other costs the customer less. As a brand communications designer I constantly struggle to understand what is driving the Australian approach when the European model seems to offer so much more value to customers and the retailers.

  2. Thanks David – interestingly in the UK Sainsbury had a habit 20 years ago of copying the leader.
    I think the European model as you describe it is a much more considered approach designed to create brands with their own attributes and personalities – potentially even more difficult for existing brands to counter.

  3. It’s interesting, from a purely brand design perspective, that in the UK, and increasingly in Sweden (surely in other European countries as well, but those are the ones I keep track of), private label products look more modern and stylish than “Brand” brands.

  4. JustinaGudelyte

    Hi Malcolm!
    Great article! I have thought about this revolution somewhere in the back of my mind as well!
    I agree that private labels do not represent inferior products any longer. Private labels have become brands on their own, challenging the assumption that they must contain inferior products, have terrible packaging, etc. In Sweden, private label brands are quite advanced I would say. Some of them are even ecological. I think it’s great!

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