Private Label Shopping Trends in Personal & Household Care

Published by: Datamonitor

Published: Oct. 13, 2008 - 10 Pages

Table of Contents

Overview

Catalyst

Summary

Table of Contents

Table of figures

Table of tables

THE FUTURE DECODED

INTRODUCTION: Private label is entering an important era as value conscious shoppers look to maximize their discretionary spending

With global private label sales approaching one trillion dollars, growth can be attributed to both 'consumer pull' and 'manufacturer push'

TREND: Growth in private label penetration and sales is apparent across the globe

The propensity to opt for private label is increasing across all FMCG categories and most geographies

Private label is accounting for an increasing amount of spend in personal care categories

Household care private label brands are generally exhibiting elevated growth, but at a slower rate than personal care equivalents

Key takeouts and implications: the presence of private labels is increasing and is becoming a significant threat to producers' brands and manufacturers' profitability

INSIGHT: Price-led value has a significant influence on consumers' personal and household care choices

The search for value is increasingly governing where consumers purchase personal and household care products

Price/ value is a key influencer of personal care choices and this bodes well for additional private label growth going forward

The importance of price in shaping product choice is even higher for household care products

Key takeouts and implications: private label appeals to the growing number of consumers who are looking for ways to stretch their budgets and will further challenge brand loyalties

INSIGHT: Increasing economic uncertainty enhances the appeal of private label

Private label offers consumers discernable price savings

Achieving cost savings is the key driver to any switching behavior towards private label alternatives because consumers recognize the value they offer

Historical downturns, especially in the 1970s, have been major catalysts for private label adoption and development

As consumers adopt a 'recessionary mindset' in 2008, the search for price-led value in personal and household care purchases will intensify

More consumers have made cosmetic and toiletries purchases on the basis of value in 2008

More consumers have made household care purchases on the basis of value in 2008

The current economic downturn has contributed to consumers switching to discount stores and private label alternatives more often in 2008

Key takeouts and implications: private label appeals to the growing number of global consumers who are finding ways to stretch their budgets

INSIGHT: Private label choice is expanding and more sophisticated than ever

Private labels are increasingly 'tiered' to accommodate all levels of consumers' budgets and the core consumer trends driving shopper behavior

Premium and indulgence trends are signifying a new direction for private label adoption and innovation

The desire for 'everyday value' has sparked the expansion of private labels

Health and wellness trends have become a huge influence on consumer lifestyles

Organic and ethical private label ranges are growing alongside innovative product formulations and ingredients

Private label saturation could lead to time poor consumers returning to famous brands

Key takeouts and implications: private label has grown because it is increasingly 'on-trend' and industry players have been adept at aligning it with relevant consumer segments

INSIGHT: Consumers trust in private labels is growing which boosts propensity to trial and longer term adoption

The majority of consumers, especially in western consumer markets, consider private labels to be of good quality and believe that the differences between own label and famous brands are minimal

The quality that national brands offer is highly recognized by consumers in some categories

In-store environment also influences private label and national brand perceptions

Marketing fatigue also enhances the appeal and relevance of private label brands

Private label still typically attracts more lower income shoppers but the consumer base is broadening

Key takeouts and implications: private label is not a new phenomena but consumer acceptance is growing

ACTION POINTS

ACTION: Determine whether you want to manufacture private label brands or not

ACTION: Ensure that private label offerings are 'on-trend', deliver added value benefits for more discerning shoppers and receive additional backing during the economic downturn

Use the recessionary climate as an opportunity to grow private label share

Create and maintain a competitive advantage by reassessing strategic aims for future growth

Keep your private label brands fresh with new variants

Communicate that the quality differential between private label and famous brands is minimal

Be sensitive to the international differences in attitudes towards private label products

Ensure that you are focused on building effective relationships with private label partners

Retailers must ensure that the relative mix of value and premium private label lines is consistent with store positioning

ACTION: Manufacturer brands must maintain marketing investment to minimize deflection to private label alternatives

Re-assess whether you need to rationalize your brands and convince retail partners they are in line with their broader positioning

Focus on quality to maintain differentiation: prove to consumers that quality really matters

Develop more custom/personalized solutions for consumers to offer unique, targeted benefits

Develop communications that convince consumers that the additional cost of national branded household and personal care products is worth paying extra for

Consider developing a 'flanker' value sub-brand while ensuring that you offer something for all pricing tiers

Consider if brand related stores can help enhance brand prestige and loyalty

APPENDIX

Definitions

Methodology

Further reading and references

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Total private label penetration and spend (US$ millions) in Europe, Asia Pacific and the US, by country, 2002-2012

Table 2: Total private label personal care penetration and spend (US$ millions) in Europe and the US, by country, 2002-2012

Table 3: Total private label personal care penetration and spend (US$ millions) in Asia Pacific, by country, 2002-2012

Table 4: Total private label household care penetration and spend (US$ millions) in Europe and the US, by country, 2002-2012

Table 5: Total private label household care penetration and spend (US$ millions) in Asia Pacific, by country, 2002-2012

Table 6: Consumer survey: the importance attached to ""being seen with the right brand"" in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 7: Consumer survey: the influence of price, habit/ preferred brand and brand image on health and beauty product choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 8: Consumer survey: the influence of price on health and beauty product choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 9: Consumer survey: the influence of brand image on health and beauty product choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 10: Consumer survey: the influence of price, habit/ preferred brand and brand image on household cleaning and laundry product choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 11: Consumer survey: the influence of price on household cleaning and laundry products choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 12: Consumer survey: the influence of brand image on household cleaning and laundry products choices in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 13: Consumer survey: the extent that consumers are making an effort to save more money in light of the economic downturn in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 14: Consumer survey: the extent to which consumers chose more cosmetics and toiletries on the basis of value and cost in the previous six months in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 15: Consumer survey: the extent to which respondents chose more higher quality cosmetics and toiletries over the previous six months in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 16: Consumer survey: the extent to which respondents chose more household cleaning products on the basis of value and cost over the past six months

Table 17: Consumer survey: the importance that individuals attach to ""feeling physically attractive"" to create a feeling of wellbeing or wellness in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 18: Consumer survey: the importance that consumers attach to ""maintaining a clean and hygienic living environment"" in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 19: Consumer survey: agreement with the notion that ""having a clean home creates a sense of wellbeing"" in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 20: Consumer survey: agreement with the statement ""there is too much choice when doing grocery shopping"" in 15 countries across Europe, Asia Pacific, South America and the US, by country

Table 21: Agreement with the statement ""there is too much choice when doing grocery shopping"" in 15 countries across Europe, Asia Pacific, South America and the US, by country

Table 22: Consumer survey: the influence of price on health & beauty and household cleaning & laundry choices in 15 countries across Europe, Asia Pacific, South America and the US, by country and gender, 2008

Table 23: Consumer survey: the influence of brand image on health & beauty and household cleaning & laundry choices in 15 countries across Europe, Asia Pacific, South America and the US, by country and gender, 2008

Table 24: Consumer survey: concern about whether the promise of health and beauty products lives up to the claimed benefits in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 25: Consumer survey: agreement with the statement, ""I am houseproud"", in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

Table 26: Consumer survey: the importance that consumers attach to ""maintaining a clean and hygienic living environment"" in 15 countries across Europe, Asia Pacific, South America and the US, by country, 2008

List of Figures

Figure 1: The private label market is impacted by a broad range of drivers and inhibitors, a message for retailer and manufacturer brands alike

Figure 2: Tesco, Marks and Spencer and Sainsbury's are leading forces in private label household care lines in the UK

Figure 3: Good value for money has become the most important influence over grocery store choice globally

Figure 4: Price, habit, ease and sensory attributes are the key factors shaping health and beauty product choices across the globe

Figure 5: Two thirds of consumers across 15 countries believe that price has a high or very high amount of influence on household care purchases

Figure 6: Perceived and experienced value benefits leads to private label trial and long term adoption

Figure 7: Shoppers have come to recognize the 'value for money' that own label brands offer

Figure 8: Consumers are increasingly making efforts to save more money due to the economic downturn

Figure 9: Half of lower income shoppers are having difficulty buying the groceries they need

Figure 10: Consumers are increasingly choosing cosmetics and toiletries on the basis of value or cost

Figure 11: Consumers are increasingly choosing higher quality cosmetics and toiletries

Figure 12: Consumers are increasingly choosing household cleaning and or laundry products on the basis of value or cost

Figure 13: European brand Sephora and Asia Pacific's Sasa expand outside home territories as a haven for indulgence, showcasing private label alongside famous brand equivalents

Figure 14: Cole's 'house brands as heroes' offering basic everyday value through to premium quality

Figure 15: The nature of the private label offering has changed considerably

Figure 16: Private label brands are experiencing growth with four distinct benefits/attributes

Figure 17: Boots segmented approach favors private label personal care over household products

Figure 18: Aldi touts exceptional quality and value across its private label personal care portfolio

Figure 19: Woolworths Australia is making inroads with its 'Home Brand' proposition in personal and household care

Figure 20: Ecover inspired: Tesco, Sainsbury's and Marks & Spencer cater to UK consumers' growing interest in natural (and highly effective) household products

Figure 21: Globally, consumers are familiar with private label and this better enables them to make a brand versus private label decision

Figure 22: Perceptions of private label are changing across the majority of FMCG categories

Figure 23: Private label brands are no longer perceived as merely low cost alternatives to famous brands

Figure 24: Global consumer attitudes towards private label are typically favorable

Figure 25: For some categories, private label categories are not deemed as adequate alternatives

Figure 26: Japanese consumers show the least amount of advertising fatigue but more than 40% of consumers overall believe there is ""too much advertising today""

Figure 27: Consumers think that a significant chunk of the higher price associated with famous brands does not bring them tangible benefits

Figure 28: More US consumers currently report buying private label products

Figure 29: Young Adults and Mid-lifers place the most importance on brand image when choosing personal and household care products

Figure 30: Consumers across all age ranges place a high amount of importance on price when making personal and household care selections

Figure 31: National brand players are faced with a dilemma over whether to produce private brands or not

Figure 32: Industry players must determine the strategic approach taken to manage private label development

Figure 33: Private label players adopt different approaches to depending on whether the strategy is geared towards differentiation or low pricing

Figure 34: Generally, it is no longer enough just to offer price-led value to attract consumers

Figure 35: Sainsbury's Champneys Spa collection mimics Clarins with ""me too"" products allowing consumers to trade down from famous brands and trade up to imitation premium private labels

Figure 36: Fostering effective supplier relationships is crucial to the longer term growth prospects of private label branding

Figure 37: Enhance the full scope of the consumer experience by strengthening overall retailer positioning

Figure 38: Manufacturers looking to capitalize of premiumization in personal care must excel more than their competitors in the provision of factors associated with the Premium Price Index (PPI)

Figure 39: Four key personal benefits as well as the additional ease of customizing have driven the trend toward more personalized consumer packaged goods

Figure 40: Offering consumers additional possibilities by which they can co-create and self-customize will be more commonplace and will come to be an expected product feature by shoppers themselves

Figure 41: Charmin Basic - an example of a famous brand adopting the tiered pricing strategy of many private labels - and the possible private label response

Abstract

• Insightful analysis into consumer's attitudes, beliefs and motivations behind private label versus famous brand purchases
• Consumer survey insight covering 15 countries. Examines attitudes to brand image, price/value and personal and household care products more generally
• Detailed action points offering practical strategies for private label and famous brands based on the trends and insights analyzed in the report
• Covers personal and household care sectors. Geographic coverage includes Europe, the US, Asia Pacific and the BRIC markets

• Improve your decision making: use this report to help understand what you should be doing to embrace or defend yourself from private label growth
• Market sizing: understand the scale and growth of the private label personal and household care opportunity/threat by sector and country
• Access insightful market and consumer opinion data aggregating the most compelling research in this timely and important opportunity/threat

About MarketResearch.com
MarketResearch.com is an online aggregator selling over 250,000 market research reports, company profiles and country profiles from over 650 research firms. Our reports will provide you with the critical business and competitive intelligence you need for strategic planning and marketing research. Coverage includes the US, UK, Europe, Asia and global markets.