Nielsen: Global Private Label Phenomenon is Here to Stay

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March 8, 2011

Although the global economy is showing signs of improvement shoppers will retain their value mindset and continue to shop frugally, according to recent research from The Nielsen Co.

In fact, “the private label phenomenon is here to stay,” according to a 2010 Nielsen global online survey of more than 27,000 respondents across 53 countries.

“While more than half of online consumers surveyed said they purchased more private label brands during the economic downturn, fully 91 percent said they will continue to do so when the economy improves,” according to Nielsen research.

Comparing global markets “there is a slow, but steady continuation of private label progress, which is actually the result of more retailers deploying private label products in a growing number of categories, a phenomenon that’s continued for more than two decades.”

And who is suffering most from the rise of private label? Small and medium brands are, according to Nielsen. “Generally, the leading brands in the category are not suffering and private label isn’t fatal for healthy brand leaders.”

More aggressive retailer advertising and promotions of private label also are boosting performance. “The evolution of private label products has also resulted in these brands operating above the lowest price band,” Nielsen said. “Increased store visibility through facings and a proliferation of SKUs has resulted in greater familiarity and awareness of these brands among shoppers.”

To win against private label, national brands should “treat private label as legitimate competition and reactionary price reduction measures will only provide a temporary reprieve,” according to Nielsen. “Private label brands are in a position to compete on value and quality —key attributes that today’s consumers seek. The opportunity for retailers is to use private label to differentiate themselves and lead the way with innovation to help build and sustain the image of the entire franchise.”

Read These Related Articles:

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