Research: Consumers Shift to Private Label in the Double Digits

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November 17, 2010

While the recession may have ended in the summer of 2009, U.S. consumers in the first half of 2010 continued to shift to less expensive private labels in all product categories, including the hard-to-penetrate personal care and baby care segments.

An increasing number of consumers switched to store brand products in the previous six months, according to research conducted in August by Epsilon Targeting, a provider of consumer information for targeted marketing programs.

Most surprisingly, 61 percent said they switched to private label personal care products –– including shampoo and facial moisturizers –– while almost 18 percent said they moved to private label baby goods, including diapers, child pain relievers and baby shampoo. The results are surprising because “these categories historically have a higher perceived cost of switching, because consumers feel they are sacrificing on quality,” according to Epsilon Targeting, which received 1,452 responses or the research.

The brand shift is a marked increase over Epsilon Targeting’s last survey in May 2009 when 51 percent of respondents said they purchased private label personal care products, and 13 percent bought baby items.

The gain by store brands in the personal care category is especially noteworthy because consumers tend to be more loyal to national brand shampoos, facial moisturizers and other "appearance" products, according to Epsilon Targeting.

For example, 37 percent of respondents said they moved to private label shampoo and conditioner in the past six months. Traditionally, this is a small category for store brands –– less than 3 percent of all shampoos and 1 percent of conditioners purchased at supermarkets in the third quarter were store brands, according to Nielsen data quoted y Epsilon. Among drug store shoppers, the figures were 5 percent and 4 percent, respectively.

Still, national brands linger in the minds of shoppers, according to the research. At least 45 percent of respondents said they would definitely purchase their usual label of personal care, food or household products again if they had a coupon. More than 44 percent said they would buy their usual brand of health products.

The following are other findings of the survey:

• 75 percent of respondents switched to store branded household products, with the highest number buying paper towels (49 percent), followed by bathroom tissue (43 percent), storage bags (42 percent) and laundry detergent (39 percent).
•  74 percent purchased private-label food products. Ranking high in this category are bread (42 percent), cheese (36 percent) and cereal (35 percent). 
• 59 percent swapped to store-brand health products, including adult pain relievers (33 percent) and multi-vitamins (27 percent).
• 27 percent of respondents moved to private-label pet care products.
• In the personal care category, more than 28 percent of respondents replaced their deodorant with a store brand and almost 16 percent did so with their facial moisturizer. Almost 24 percent switched on women’s shavers.
• In the children and baby category, 9 percent of respondents traded to store brand pain relievers, 6 percent shifted their baby shampoo brands and 5 percent changed diapers.

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