Gas Price Savings Will Not Sway Consumers From Private Label
STAMFORD, Conn. — Conventional wisdom would suggest that consumers with extra money in their pockets as a result of the declining gas prices as of late would abandon private-label brands in favor of national brands. However, new survey data from Stamford-based Daymon Worldwide reveals that a sizable percentage of shoppers will actually use the savings to purchase even more private brand products.
More than one in three shoppers surveyed (35 percent) said they will not only continue to purchase private brands in the categories they already do, but will also expand their private brand purchases into new categories. Additionally, 22 percent of respondents, who identify themselves as “Experimenters,” will delve into new private brand categories for the very first time.
Janet Oak, Daymon Worldwide’s head of Global Advisory & Custom Shopper Insights, said numbers like these mean attractive sales opportunities for retailers ready to leverage their private brand offerings with high-quality products and enticing innovation.
“With gas prices dipping to as low as $2 per gallon in certain markets, economists estimate that consumers are saving $200 million a day vs. last year," said Oak. "With more money to spend … these shoppers are more willing to experiment with private brands on a deeper level. Our survey confirms that private brands, when executed well, are not just for consumers looking to save money, but to spend it.”
Moreover, consumers are open to deeper connections with their preferred retailers, and when savings like lower gas prices allow it, they’re more willing to experiment with new categories of private brands. In fact, 14 percent of respondents described their approach to private brand products as “Explorer” in seeking out and investigating new private brand options.
“Future growth of private brands will come from expansion into non-commoditized categories that are presently led by strong national brands, like carbonated soft drinks,” noted Oak.
Despite the eagerness of some consumers, the survey findings show that one-third (33 percent) of respondents will use their savings to switch back to national brands in some categories where they feel quality outweighs value. And more than 26 percent said they will stay with the private brands they tried and liked, but they don’t plan on purchasing private brands in new categories.
“It’s imperative that retailers invest in making their private brands authentic extensions of their banners by offering high-quality products across categories, and in working with suppliers to introduce new products that tap into consumer trends and interests,” according to Oak.
For the survey, Daymon Worldwide’s Custom Shopper Insights team recruited 1,003 respondents to take an online survey Dec. 17-22 regarding their spending habits in reaction to dipping pump prices. Respondents were 18 years or older and had purchased a private brand product in the past 30 days. The respondents — 40 percent men and 60 percent women — were nationally representative across U.S. regions.