About nine out of 10 consumers trust private brands as much as they do national brands, according to a new report from Daymon.
The company's 2020 Private Brand Intelligence Report, “The Future of Private Brands,” also found that 86% of U.S. consumers view private brands as equal or better to national brands. These insights were gleaned from Daymon's 2020 Private Brand Survey of more than 2,000 U.S. shoppers and custom intelligence from the Stamford, Connecticut-based global private-brand agency.
The report notes $183 billion in private-brand annualized sales, garnering a 19.2% dollar share, and that private-brand sales have increased by 5% year over year, and are growing two times faster than national brands.
In a finding that underscores the role that private brands play in loyalty, more than half of shoppers surveyed said that they pick a store specifically for its private brands, while only 6% of respondents said they exclusively shop national brands, with more than a third saying that the bulk of their shopping carts are made up of store brands — 11% more than said this in the past two years of the study.
Additionally, Daymon’s report looked at private brands in the COVID-19 era and what that future holds. According to the report, private brands are well positioned for the future. Daymon’s custom analysis of store-brand programs across the country revealed that best-in-class retailers dedicate 43% of their own brand programs to value-added lifestyle items, compared to the industry average of only 16% — nearly three times the expected level of assortment differentiation.
This shift toward lifestyle programming is placing store brands in a stronger position in the eyes of consumers, the report noted. Daymon’s research found that four in 10 consumers said that private brands now offer more innovative products than in the past, resulting in nearly eight in 10 saying that store brands are “on trend,” even more so than national brands, representing a 15% increase in favorability toward private brands over the past two years.
Private brands also have grown their market share in 88% of categories across the store over the past three years, the report observed, and pandemic shopping is only going to fuel this, including online. According to the report, 2019 annualized online sales of private brands reached $1.7 billion, an 87% year-over-year increase. Factoring in COVID-19 shopping habits online in 2020, that number will certainly grow by a big number.