Today’s consumer is spoilt for choices. The growth in modern retail – both physical and online, provides a wider spectrum of brand and product choices across almost every conceivable CPG (consumer packaged goods) category. And new categories emerge as new need spaces get identified by marketers…
In this environment, legacy national brands built on mass media advertising now compete with private label or store brands of retailers on the one hand, as well as a new class of digital-only or direct-to-consumer (DTC) brands that are swamping online retail channels such as Amazon, Flipkart, Big Basket, Grofers among others. Growing prosperity and ubiquitous access to product information & online user reviews has also created a higher degree of “aware consumers” who seek “authenticity” and “good for me” as markers of brand choice. Shopping habits especially in urban/ semi-urban centers has also seen a significant shift towards modern retail/ supermarkets and online channels.
THE “ME TOO” TO “ME” OPPORTUNITY FOR PRIVATE LABELS
The more significant shift, however, has come about in consumer attitudes to brand value with more and more shoppers willing to experiment with new products. The growing acceptance of private labels and digital-only brands is a clear testament to this trend. Today, value perception around consumer products is no longer limited to “brand imagery” created & influenced by mass-media advertising. A more layered and multi-faceted appreciation of “brand value” – what eventually determines consumer consideration and choice – has emerged.
For private labels, the transition from “product” to “brand” and from “me too” to “ME” resides in a strategic focus on ensuring differentiation at the moment of truth i.e., the retail shelf rather than push on price. While being a “cheaper alternative” may be a practical starting point to build a customer base, sustainability and profitable growth of private label programs will reside on a long-term focus on brand value creation. Fortunately for retailers, they have the critical advantage of being in direct interaction with consumers allowing them first-hand shopper insights and data analytics to help sharpen product value propositions, innovate on products, create new categories, optimize SKU mix, and clarify brand messaging.
At the heart of what influences and creates brand value for private labels is the unmistakable role of packaging. Designed well, packaging can highlight “uniqueness”, demonstrate “authenticity” and reinforce “credibility”. Even in the absence of any intrinsic uniqueness in the product or a strong brand legacy for endorsement, well-crafted packaging can trigger a “pick-me-up/ know more about me” effect on shoppers at the store shelf – what we at Encept Brand Design call the Moment of Truth Stimulus.