Private Labels Are Retail MVPs, Survey Shows
For retailers like Target and Costco, private labels like Universal Thread and Kirkland have long been a boon to business, garnering loyalty and caché comparable to the other national brands on their shelves.
Store-owned brands are still gaining traction, according to a new survey from retail technology company Bazaarvoice, which found that more than half of consumers are interested in purchasing private label clothing and accessories. The e-commerce technology firm partnered with data company Dynata to survey 1,000 U.S. adult consumers in January to determine their attitudes toward private label brands across a number of categories, from food to fashion.
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More than one-third (36 percent) of respondents said they actively seek private label brands because they offer good value, and 43 percent reported sometimes buying private label products if they are significantly cheaper than comparable national brands. Bazaarvoice chief marketing officer Zarina Stanford said that’s not surprising, as rising inflation and other economic troubles are playing a role in consumers’ willingness to try private label products.
“There is no doubt that the current economic climate is really tightening everybody’s effective purchasing power,” she said. She pointed to data from the Shopper Experience Index Bazaarvoice conducted in August 2023, which found that 69 percent of consumers globally were open to trying a different brand for products they buy, and 73 percent admitted to shifting their spending habits.
Food and beverage ranked first among categories in which consumers will consider buying store brands, with apparel and accessories coming in fourth behind household cleaning products as well as and health and beauty. More than half (53 percent) of respondents said they would consider private label fashion.
Price and quality are the biggest factors driving the shift to private label brands, with 72 percent of consumers buying based on cost and 57 percent because the quality is similar to national brands. Nearly half of shoppers are being swayed by their peers; 46 percent said positive reviews and recommendations would sway them to make a private label purchase.
Stanford said that particularly in the fashion category, quality can trump cost when it comes to choosing between a private label and national brand. “While value is important, the fact is that quality and style matter,” she said.
Perception of private labels is on the up and up. The survey found that 43 percent of consumers feel their quality has improved, and a combined 82 percent reported having a positive perception of store brands as well as not clocking significant quality differences between those products and other established brands.
Sixty-five percent of consumers also admitted to actively searching for dupes of popular brands at lower prices, and 88 percent reported they would consider a dupe if it had positive reviews and was significantly cheaper than the original.
Within the fashion category, high-end designer brands prove to be the exception to these shifts toward private labels, Stanford said. “When you get into the luxury goods, as you would imagine, it’s less and less likely for them to switch because brand loyalty is really key,” she added. “Fashion is a category that’s very unique in the sense that the stickiness and the loyalty of it is very deep-rooted.”
Stanford said that fashion retailers outside the luxury space can boost the perception of quality and style with their private labels by partnering with a celebrity or designer, the way that Target has done over the years with its designer collaborations and licensed lines.
“They have very effective private labels because they put a celebrity onto it, and then all of a sudden it has a unique equity to it,” she said. “But I think this is the strategy that companies need to be really thoughtful of from a brand and retailer perspective. How far are you willing to dilute or expand what your brand promises?”
Ultimately, Stanford said consumers expect to have the same or similar experience with a private label product that they do with a product from a known brand. The key to determining whether or not a private-label strategy will work for a business is knowing, understanding and listening to customers and their needs.
“The consumers are telling us what we should do or should not do, and I think we should let them guide us,” she said.
