The Internet has a lot to answer for when it comes to the changing shift in consumer demands. There was a time when ‘brand’ meant something, and while it is dangerous to generalise, brand is becoming less significant.
In the rush to remain relevant in the consumer’s mind, branding has become less about solving specific needs – and more about creating new revenue streams by promoting solutions to needs that currently don’t exist.
In the 70s, launching a brand would mean that it had a life cycle of between 17-20 years. In the 90s this dropped to 5-6 years, and in 2010 it was less than 12 months. The launch of the internet and the growth of social media has seen a dramatic drop in the time a product has to develop a relationship with today’s savvy consumer.
Consumers are no longer brand loyal - they are trend loyal
Consumers are no longer brand loyal - they are trend loyal, and it is arguable whether we will ever see another iconic brand establish itself in the market again. Consumers are only loyal to the engagement experience that a particular brand offers. Once the experiential elements of brand engagement disappear, (in many cases) so does the emotional connection consumers have with the brand that was providing them that unique experience.
Contributing to this position of brand loyalty are the supermarket giants and their push for own-label goods. The big two super-chains in this market have made no secret of their desire to grow their own-label brands, revamping and upgrading their image to a premium look, one that is aligned to the well-known market leaders. Add to the mix a concerted push against secondary product partners, and the lines of distinction between market leaders and own-label will become increasingly blurred.
Stephan Shakespeare, founder and global CEO of YouGov, highlighted this in his 2016 article: Supermarkets seem to be gearing up for a big push on their own-label products - should brands be concerned?
His research showed how shoppers at different supermarkets feel about own-brand goods. On average, 39% of British consumers believe that well-known brands are usually better than shops’ versions, and 65% think there isn’t much difference between branded goods and supermarkets’ own products.
Interestingly, the attitude of consumers changed significantly across the different banners with Aldi (76%) and Lidl (75%) customers feeling that there was not much difference between leading brands and supermarket brands (versus 40% of M&S customers).
These results highlight some interesting insights for the future of brands in this market. On face value it seems clear that as major chains gravitate to own-label brands, consumers will increasingly see little difference between leading brands and supermarket brands.
Shakespeare goes on to pose the key question arising from the data: Where does the push come from? Is it from consumers choosing certain supermarkets (because they like own-branded goods) and certain retailers that have a stronger proposition when it comes to these value products? Or does it come from retailers having a concerted push on own-label goods in an effort to persuade consumers to switch from branded alternatives?
If it is the former, then these attitudes may not affect brands too much. After all, if there is a clear share of consumers who favour branded goods over own-brand varieties, then there is a high chance that they will stick with their established habits. However, if it is the latter – and the thing that tips consumers from the branded to the unbranded column is simply exposure to the products – then brands could be facing a bit of a challenge.
But it’s not all doom and gloom for brands as the research seems to show that the closer aligned you are to a convenience offer, the greater perception there is from consumers that well known brands were better than a shops own-brand. History shows that convenience was founded on house brand names and market leaders, so perhaps this is just another case of going back to the future?
This could also be good news for convenience retailers and independents in general as they look to create points of difference between the supermarkets and themselves.
The fate of many brands and retailers, for that matter, could be in the likely collaboration of forces to create environments that surprise and delight, offering consumers a greater array of products and choices.
Greater in-store choice and a relaxing of traditional ranging dominance could be required for the survival of all parties… but this will not come easy!
If the current status quo and control of existing convenience is maintained, then it is more than likely that brands will have less opportunity in both the supermarket and convenience space. This could also be bad news for retailers.
Why? Because the evidence of brand-controlled environments is there for everyone to see; in the writing on the walls, windows and awnings of closed-down corner stores.
Craig Matthews is the MD of Stock Box, with over 30 years industry experience in retail development, specialising in independent retail programs.