Private labels take the lead as product prices soar; 63% of shoppers turning from top-shelf brands to lower-shelf alternatives
BOSTON, April 20, 2023 (GLOBE NEWSWIRE) — Salsify, the platform empowering brand manufacturers, distributors, and retailers to win on the digital shelf, announced the findings of new consumer research that reveals this is the era of the store brand with 63% of shoppers choosing store brands or private labels due to their low prices. The study also shows that pandemic habits persist with 68% of respondents indicating that they are shopping more online with delivery speed and flexibility being the #1 factor (85%) driving where they shop.
The report, Post Pandemic, New Recession: 2023 Global Guide to Consumers, provides detailed insights on what is driving global consumers to buy online in the midst of higher prices, rising layoffs and continued worry about a possible recession. This survey of more than 6,000 consumers from the US, France, Germany, Great Britain and Australia found that despite current economic uncertainties, product quality is more important to consumers this year than discounts, with 81% saying product quality is the number one factor that keeps consumers loyal to the brands they love.
“The pressure is on this year as consumers become much more selective about their purchases. While price is a key factor in purchasing decisions, it’s not the only thing that is swaying these careful consumers,” said Cara Wood, Head of Research at Salsify. “Product quality is under much greater scrutiny and more than half of consumers said they wouldn’t buy a product with bad product content that doesn’t include enough information or includes low quality images. In fact, strong product content is so important that shoppers are more likely to purchase products from unfamiliar brands or those with bad reputations than those with missing or bad information.”
Additional insights from the survey revealed the following trends:
Private-label products winning likes from consumers
As companies develop premiumization strategies with specialized products and services to drive higher revenues, consumers equate some cost savings with store-brand or private-label products, with 63% choosing private labels because of their low prices.
- Shoppers are also willing to buy the store brand product in most categories, so commodities like groceries and cleaning supplies brand names are often the most vulnerable to being replaced.
- 96% of consumers buy store-brand groceries.
- Fast fashion is not dead but 82% are choosing store-brand apparel.
- Apple beware, 69% of consumers are buying store-brand electronics.
The New US Shopping Wars is Parents vs Non-Parents
While brands have long engaged in marketing to parents for kid products, US brands may be missing an opportunity to tap into how differently parents think about purchases across categories.
- Brand trust matters to the majority, but it holds slightly less clout with parents. Fifty-six percent of parents compared to 65% of non-parents say they spend more when it’s a brand they know. However, ethical standards matter more to parents (34% parents versus 23% non-parents).
- Blame it on the bounce house. Parents put up with a number of minor annoyances so it may come as no surprise that the online shopping experience matters less to parents (53%) than non-parents (60%).
- Hold the peanut butter, keep the Roomba. When it comes to spending decisions this year, parents are more likely to cut back on groceries (39% parents versus 33% non-parents) than electronics (48% parents versus 54% non-parents).
Shopping and Social Issues Differ by Income and Gender
As brands work to win over careful consumers, they cannot ignore social issues such as climate change. The survey showed how these issues are impacted by income and gender.
- Income may inherently play a role in a lower carbon footprint. Low-income homes (under $25K a year) are the least likely to return products. Eleven percent said they never return items bought online vs 2% of those higher-income homes ($200K+).
- Men were more likely to say a brand’s sustainability practices matter to them more than women. The survey showed that 24% of men research a company’s sustainability practices before buying, compared to 17% of women. Interestingly, men are also more likely to research a company’s public stance on social or political causes with 21% doing so, versus 16% of women.
Consumers Getting Meta about the Future
Consumers (42%) continued buying directly on social media, but also tried some new channels in 2022. Twenty-five percent of all consumers said they shopped using augmented reality (AR) or virtual reality (VR) shopping tools in the last six months. These channels matter most to consumers under the age of 45.
About the Post-Pandemic, New Recession: 2023 Global Guide to Consumers
Salsify conducted a quantitative online research survey via SurveyMonkey in November 2022, among a general consumer pool of 6,326 online shoppers in Australia, Germany, Great Britain, France, and the United States. The margin of error is ≤ 3%. For more information on the methodology or to view the full results, download the report here.
Salsify helps thousands of brand manufacturers, distributors, and retailers in over 140 countries collaborate to win on the digital shelf. The company’s Product Experience Management (PXM) platform enables organizations to centralize all of their product content, connect to the commerce ecosystem, and automate business processes in order to deliver the best possible product experiences across every selling destination.
Learn how the world’s largest brands, including Mars, L’Oreal, Coca-Cola, Bosch, and GSK, as well as retailers and distributors such as DoorDash, E.Leclerc, Carrefour, Metro, and Intermarché use Salsify everyday to drive efficiency, power growth, and lead the digital shelf. For more information, please visit: www.salsify.com.
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