For years, private label brands have existed as an alternative to the brand name products you know and love. However, with recent news of Amazon scaling back its house brands while other retailers rake in the cash, it’s worth investigating – what makes a successful private label brand?
CivicScience data offers a better understanding of the current popularity of store brand products. For context, private label brands are popular. Currently, 39% of U.S. adults say they are shopping store brands ‘somewhat often,’ while 24% are doing so ‘very often’ (excluding those answering ‘Not sure’ and ‘Does not apply’). That’s over 60% of U.S. adults shopping for private label brands at least somewhat frequently.
In a side-by-side comparison of how shoppers are shopping at Walmart, Target and Amazon for the retailer’s own private label products, Walmart customers have the most interest in shopping Walmart-brand products. As the data show, 33% of Walmart shoppers purchase Walmart’s private label brands ‘very often,’ while 38% do so ‘somewhat often.’
This drops considerably in Target’s data, with just 20% who shop Target brands ‘very often’ and 30% who do so ‘somewhat often.’ And while just 14% of Amazon customers shop Amazon brand items ‘very often,’ 31% do so ‘somewhat often,’ echoing the trend seen for Target. However, Amazon shoppers express the greatest intent to try Amazon’s brands.
It’s worth noting that 35- to 54-year-olds are in general shopping private label products the most overall, but they’re also very popular among the 34-and-younger crowd. Across all of the above-mentioned retailers, adults aged 18-24 are the most likely to say they buy private label brands frequently, while adults aged 55 and older have the least interest. For example, 42% of adult Gen Z shoppers purchase Walmart’s brands ‘very often,’ compared to 25% of Walmart shoppers aged 55+.
But what exactly are consumers buying when they’re buying private label products? The data tell us that groceries, followed by home decor and household cleaning, are the top categories where store brands are chosen more often than name brands. Additional data show that while cleaning products are popular store brand items among consumers, brand-name options still win out in this category.
So while private label products have a strong following, consumers are clear about when brand matters.
All of this said, how important are store brands for retailers to continue to pursue? Consider this: Compared to this time last year, 36% of U.S. adults who buy store brands with any frequency are shopping store brand items at least somewhat more.
This suggests that while demand continues to increase, retailers – especially those tapped into young adult demographics – would be wise to consider how their private label brands can continue to meet consumers’ needs.
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