Cash-strapped consumers continue to embrace private retail brands

In an article published on the Trade Intelligence website, Roelien Havenga, Director of Business Intelligence for Africa and Latin America at Daymon, says that private brands are no longer being seen as the low-cost option, but as a value brand. Two key factors driving this are increased affordability and increased quality.

From a retailers’ perspective, a private brand can be a key driver in getting customers into the store. The benefits to retailers are threefold:

1.Differentiation

Having a differentiated offer from competitors stocking the same national brand.

2.Loyalty 

This differentiation may lead to loyalty as customers know they can buy this brand only from this specific retailer.

3.Margin Management

As the private brand sits within the retailer, they can more easily determine the affordability and margin of the product.

“For South African customers surveyed, who mainly focus on price (62%), there are a few key factors to consider, primarily that their base decision is driven by price,” Havenga says.

“They prefer to buy the lowest price on the shelf and constantly look for promotions. [However], this is not necessarily [true] in all categories, especially where categories have a solid brand presence and high brand loyalty with well-known national brands. 

“Customers are increasingly brand agnostic, driven by better-priced and quality products outside of national brands, and it is here where private brands will continue to win.”

Read the full article here.