Private Label products have come a long way in recent years. Once perceived as cheap and basic compared to the national brands on offer, consumers are now recognizing that Private Labels are actually a worthwhile purchase. This was evidenced in a recent study undertaken by Nielsen [1], which revealed that the Private Label market share has climbed to an all-time high in nine European countries. That being said, with a mere 23% of consumers [2] saying they completely trust the safety of the Private Label brands they consume, according to a Trace One study, there is certainly room for improvement.
Retailers must therefore prioritize their efforts to improve consumer confidence in Private Label products – see below for examples of a few ways in which this can be done.
One of the most simple and effective ways to make your brand or product more appealing is through complete honesty. For example, with a recent survey [3] revealing that 55% of shoppers say online reviews influence their buying decision, it is highly recommended for brands to openly share what consumers think about their products. Not only will this have a positive impact on your company’s search rankings [4], it is an effective way of proving your integrity, whilst highlighting your efforts to improve the customer experience.
McDonald’s Canada is a key example of this. The fast food giant launched a transparency marketing campaign named “Our food. Your questions,” that offered customers the opportunity to publicly ask anything. Whilst this put the brand in a potentially vulnerable position, it enabled them to dismiss rumors and provide customers with accurate information about the company and its products. This resulted in enhanced levels of customer trust.
Private Label brands should also apply this level of transparency to the publication of their safety measures, which should be clearly emphasized throughout all marketing collateral and product packaging. Due to incidents such as the ‘horse meat scandal’ and, more recently, the chicken supply industry scandal in the UK, now, more than ever, consumers want retailers to prove how they uphold quality standards. Consumers need to be assured that the product in question is treated with exceptional hygiene and care, from sourcing to the store shelf.
Confectionary giant Nestlé uses a number of platforms to emphasize their safety measures. They state that packaging plays a vital role in ensuring products reach consumers in a safe condition and carries clearly stated information about how the product should be prepared, stored, and used with detailed information on ingredients and allergen risks.
In a similar vein, in a time where customers are bombarded with a plethora of mass marketing messages, customers are increasingly more willing to trust brands that endeavor to enhance their knowledge about the contents and background of their products[5]. Educating customers has a number of benefits for Private Label brands (or any brand for that matter). Not only is educating the customer likely to reduce the number of complaints, it will also help to enhance customer loyalty, as the customer will be fully informed of the product’s capabilities, features and limitations. This thorough understanding is a crucial part of building trust. This has been evidenced in recent research[6], which illustrates that educating customers strengthens trust, whilst effectively achieving brand differentiation.
Healthy supermarket chain Whole Foods, has achieved this by using a multi-channel approach to educate their customers. In store the brand uses eye-catching posters to inform customers about topics such as their sustainable practices and safety measures and where their food is sourced. Meanwhile, online they run a community blog, which educates the customer with company information, provides delicious recipes, healthy eating tips and spotlights on new local vendors. All of which has resulted in higher levels of consumer trust.
There’s no reason why Private Label brands shouldn’t strive to contradict the aforementioned perception of being ‘basic.’ One of the ways this can be achieved is through high-perceived innovation activity, that, as highlighted in a recent study undertaken by the Faculty of Law at the University of Oxford, is proven to enhance consumer levels of trust. Private Label brands therefore have the opportunity to explore new avenues to capture the attention and ultimately the trust of consumers.[7]
This need for innovation has been demonstrated in the hair care industry, where, as exposed in a global survey undertaken by Nielsen[8], investment in innovation and marketing has created strong brand preferences and loyalty amongst consumers. The survey also concluded that consumers are willing to spend more on products with innovative attributes.
This was further highlighted in a Mintel report, which established that innovative brands are carving out a larger portion of consumer mindshare. Commitment to innovation is an effective strategy for maintaining and growing consumer market share and trust, and therefore should not be overlooked.
In essence, consumers are open to buying Private Label products as long as they outshine national brands when it comes to quality and value for money. In order to build and maintain trust and to encourage repeat purchasing, it is crucial that the Private Label product in question exceeds the consumer’s expectations. Implementing the suggestions mentioned above will help to counter unjustified negative perceptions and increase the likelihood that the Private Label brand/product will thrive.
[1]https://www.plmainternational.com/industry-news/private-label-today
[2] Trace One report: Consumer Confidence in Private label
[3] https://blog.kissmetrics.com/5-ecommerce-stats/
[4] https://blog.capterra.com/customer-reviews-stats-you-need-to-know/
[5]https://www.researchgate.net/publication/237428582_Perceived_Service_Qua…
[6]https://www.researchgate.net/publication/237428582_Perceived_Service_Qua…
[7] https://www.law.ox.ac.uk/sites/files/oxlaw/symposium_report_2015.pdf
[8]http://www.nielsen.com/content/dam/nielsenglobal/eu/nielseninsights/pdfs…