Private Labels Need a New Look

Posted by | September 24, 2018 | , ,

Written by Emma Oyomba

Just Because You Are a Private Label, Doesn’t Mean You Have to Look like a Private Label.

About ten years ago, I had my first direct experience with a private label product. I was grocery shopping with my mom and I noticed that sometimes she wouldn’t get the name brand condiments or soda but instead some sort of generic version. The only reason I knew these weren’t the same name brand items that I had seen advertised on the television was because of the packaging. I remember hating when my mom bought these generic products because I thought they wouldn’t taste as good as the name brand products and again, that had almost everything to do with the packaging. The packaging didn’t look appealing and didn’t look like it was worth as much as the name brand products or as though anyone put much thought into it. It looked incomparable to its name brand counterparts and definitely didn’t seem as if it would match up on taste with national brands. However, when I would actually consume or use these private label products, I realized they weren’t so bad after all and that looks can indeed be deceiving.

Now that I am older and have started buying groceries for myself, I often opt for private label products mainly because they are cheaper but mostly because I have come to the realization that they can taste the same as name brand products and it seems like people are catching on to that.

Private Labels Shouldn’t be Underestimated

The growing importance of private label products to retailers cannot be ignored. Over the past ten years, private label products have shown more steady growth than that of traditional national brands in almost every category. According to research found by Time Magazine, private labels cost around 25-30% less than national brands. Their impact has forced those national brands to reduce their prices in order to remain competitive.

Private labels have come a long way over the past few decades in terms of their quality, taste and packaging. Much of the stigma that surrounded private labels was their dull, unattractive packaging and their taste. Nowadays, taste isn’t a major distinguishing issue and the packaging has improved a little but not a whole lot. There is still a considerable difference between the packaging of private label products and name brand products. But, just because you are a private label doesn’t mean you have to look like a “private label.”

How Private Labels are Changing Their Packaging

A great example of this would be Market Pantry, which is one of the private label brands available at Target. The brand brings in $1 billion or more in annual sales. One would think that its consumers would love everything about this brand but there was one major qualm consumers had. According to a Target press release Market Pantry’s packaging was the issue. “’Turns out, guests loved Market Pantry’s great taste, quality and low prices, but they thought the packaging designs fell a little flat,” says Amanda Irish, vice president merchandise manager, Owned Brands.

“Target’s known for great design, but the current, generic look and feel of Market Pantry just wasn’t reflecting that.’” Irish also said, “Words like ‘basic’, ‘generic’ and ‘plain Jane’ came up when guests described the current designs.”

As a response to this, Target decided to rejuvenate Market Pantry’s packaging. They went with a “bolder, more joyful look.”

 

“’They incorporated bright colors against a consistent red and white base, and varied background patterns that can be customized to fit packages of all sizes and shapes. They also used fresh, crisp photography and more expressive fonts’”, says Irish.

Package Design and Consumer Buying Behavior

As we can already see, package design has a major effect on consumer buying behavior. According to research cited by The Paper Worker, one-third of consumer decision-making is based on packaging. There is no doubt that smart and strategic packaging helps consumers feel an emotional attachment to a brand’s product and sometimes this is a powerful bond that transcends monetary value. This could explain why I will always buy the name brand Coca-Cola and never a private label cola even if it costs less. Sure, they might taste almost the same but I grew up on Coca-Cola and have an emotional attachment to it and its packaging. I am still waiting for the day I will be loyal exclusively to a private label product. However, I don’t think that day is too far off.

What is the Future of Private Labels?

It looks like Millennials and Generation Z will drive the future growth of private labels because we really didn’t experience the low quality stigma that once surrounded private labels decades ago. Now we see these private label products as a cheaper alternative to name brand items. But, bear in mind that in an age where our generation is obsessed with how things look and where many try to perpetuate a certain lifestyle aesthetic, it may be best to not rely solely on value and quality but to also amp up the branding and graphics to national brand standards. It’s one thing for a product to be cheap but it’s another thing if it looks cheap as well. Looking cheap works to diminish a products quality. Private labels are faring better in blind tests and consumer reports, so we know that the quality and taste of these products are just as good as name brands. However, consumers won’t feel fully convinced at the point of purchase if the packaging looks cheap. With an innovative branding and packaging shelf presence, people will certainly feel they are getting a quality product without the name brand price tag, which could continue to drive up private label sales even more.

 

Emma Oyomba is Marketing Coordinator at Gammon Ragonesi Associates.