72% of Consumers Are Buying Private Label Products Without Realizing It, According to New Research from First Insight

The Stigma Once Tied to Private Labels Has Largely Disappeared, and Consumers Are Increasingly Willing to Break from Their Normal Brands to Try New Products

First Insight, the company that leverages AI to transform consumer feedback into profitable retail strategies, has released findings from its latest study, The Quiet Takeover of Private Label. The study reveals that the traditional distinctions between private labels (or branded products made by retailers to sell exclusively in their own stores) and national brands have become so subtle that most consumers can’t tell the difference between them. Nearly three-quarters (71%) of consumers surveyed believed they could recognize a private label when making a purchase, yet 72% were unable to do so when shown side-by-side images of store brand and national brand products.

Once seen as lower-tier alternatives to national brands, private labels are now becoming more competitive—and part of many retailers’ long-term growth strategies. Retailers are putting more effort into the quality, appearance and marketing of their private labels—and shoppers are responding: In fact, 84% of consumers now trust in the quality of store-brand products more or the same as national brands, while more than half (52%) say they’ve been influenced to try a store-brand product by in-store promotions, packaging, displays or marketing materials.

First Insight, which works with both major retailers and brands to understand what drives trial, preference and repeat purchase of store brands, recommends that retailers engage consumers directly and use the resulting insights to guide the development, pricing and presentation of their private label products. The First Insight study offers a macro view of how shifting consumer perceptions and behaviors around private label products are influencing trial, loyalty and the decisions retailers must make in a changing economic and competitive landscape. First Insight’s report is based on responses from 1,267 respondents ranging from 18 to 80+ years old.

Among the findings:

• The stigma once associated with private labels have largely disappeared. Seventy-seven (77%) of consumers aren’t concerned with how they’re perceived for purchasing private label products.
• Today’s shoppers love finding “the dupe.” Smart imitation has become a badge of savvy shopping, with nearly half (47%) of consumers saying they’ve tried a private label product specifically because it was a dupe of a name-brand item. Forty-four percent (44%) of consumers—and 70% of those earning more than $150k per year—saying they’re more likely to try a private label if it’s marketed as a dupe of a high-end product.
• Consumers are willing to break from their normal brands to try new products. While 48% of consumers still identify as brand loyal, more than half say they’re either brand curious (32%) or motivated by price and savings (20%).
• Brand loyalty is no longer a guarantee. Consumers today no longer worship national brands; they chase value, quality and availability. More than seven in 10 (71%) consumers say they would be willing to try a private label if their preferred national brand was out of stock. And once a consumer makes the switch and feels satisfied, they rarely go back, with nearly half (45%) saying they’ve permanently switched from a national brand to a private label when the product met or exceeded expectations.
• The perception of store brands varies by income level. While the stigma around private label is fading overall, more affluent shoppers still feel image-conscious. Nearly half (44%) of consumers making $150k+ per year say they’re concerned about how they’re perceived when buying private label products. This is a significant increase compared to 27% of those earning $51K–$149K and 17% of those earning $50K or less.
• Essentials are the entry points for private label trial. Grocery (56%), household cleaning supplies (38%), clothing and apparel (34%), and personal care and beauty (33%) are the most commonly purchased private label categories.
• Private label is driving brand advocacy—and store traffic: Two-thirds (66%) of consumers say they recommend private label products to friends and family, and 34% say they’re more likely to shop at a retailer specifically because of its private label offerings.

“Shoppers aren’t loyal to brand names the way they used to be. They’re loyal to price, quality and marketing. This creates a highly competitive arena where the best–yet not necessarily the most well known–brands will win,” said Greg Petro, CEO of First Insight. “When a national brand stumbles, it opens up an opportunity for private labels to grow their market share—but only for those with products that feel intentional, well-designed and trustworthy. Consumers will let you know exactly which ones those are. You just have to ask them.”

First Insight helps retailers and brands eliminate risks associated with getting merchandising wrong, overestimating product demand, pricing poorly and otherwise incorrectly guessing what consumers will want and pay to get it. By integrating consumer feedback into every decision they make, First Insight replaces even the best retail guesswork with insight-driven decisions. As a result, brands and retailers across industries can move quickly and confidently to optimize product decisions that drive loyalty and margin.

The full report can be viewed here.

About First Insight

First Insight is a global retail platform that uses its native AI to turn real-time customer feedback into profitable strategies for more than 600+ brands and retailers. Companies like Gap, Under Armour, Woolworths and Family Dollar rely on First Insight to understand what consumers will buy, what they won’t, how much they’re willing to pay, and how these and other factors directly influence planning, inventory and margins. First Insight further transforms customer feedback into a Value Score™, assigned to every single product it gains insight on. These scores accurately predict the viability of and demand for products so that retailers can confidently make design, pricing and inventory decisions that will deliver measurable financial impact. The company’s Voice of the Customer Platform is central to its offering and boasts a network of 360+ million consumers spanning 180 countries and 67 languages and currencies. First Insight was founded in 2007.

Learn more at: www.firstinsight.com

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