Risk Prevents Shoppers from Switching to Private Label

7/12/2009
For some products, consumers just won’t risk buying the store brand, per a new report from ICOM, a unit of marketing services firm Epsilon Targeting.

Shoppers will switch to store brands for food and household goods, but are more likely to stick with name brands when it comes to children and pet products.

When the risk inherent in a purchase is low, consumers are more apt to go with the private label brand, the report found. “Perceived risk, that's what is driving these key consumer decisions,” said ICOM marketing director Warren Storey, in a statement. This is the kind of insight that national brands can use to reach customers with promotions that meet their needs and bring them back.”

ICOM surveyed shopping habits of 1,530 Americans over a six-month period in its latest study. Some of the other findings:

*Fifty-nine percent of Americans chose the private label option over their favorite food and household brands. And yet, only 12 percent reached for private label when it came to child care products.

*Forty-eight percent chose the store brand over national brands for health and personal care products, versus 23 percent for pet care.

*The “less risk means more switch” trend was even more evident in the over-the-counter medication category, with 42.4 percent of Americans turning to store brand alternatives for general pain relievers, 31.7 percent for cold and cough medication, 30.8 percent for allergy relief and 21.5 percent for heartburn medication.

“These results highlight that understanding customer psychology, and tailoring promotions accordingly, is a significantly more effective win-back strategy than scatter-shot, one-size-fits-all offers,” said Storey.

- Nielsen Business Media
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