More than mere copycats: How own-label brands are learning to go their own way
Have you ever reached for the Head & Shoulders in-store, only to get home and realise it's the Boots own-label version in your bag?
Own-brand is no longer just about copying
According to consumer champion Which?, confusion among shoppers over copycat packaging is rife. The findings were well covered across the media, with most stories focusing on these ‘vital’ stats:
• 30 per cent felt misled
• and 38 per cent were annoyed that they hadn’t selected their trusted brands.
While no one would argue that copycat packs are still one of the markers of the own-label category, it’s also just as evident as to why this should be the case. With the category now worth a commanding 50.5 per cent of grocery shares by value (Kantar) in the UK, adopting the same pack language as brands provides a convenient shorthand for retailers, who see more profit return to store from this than from branded products. Even retailers such as M&S, which led the way by only having own-label products, copied brands in its quest to continually bring innovation to market.
Having said that though, there were other statistics to come from the Which? report which to my mind warrant some attention too, namely:
• 18 per cent of shoppers deliberately purchase own-label products over brands,
• 60 per cent because they cost less – which is a large demographic to work with
• and 59 per cent of which wanted to try own-label to see if the products are as good as brands.
For retailers, these really are vital stats. They are indicators of a category that’s coming into its own and they also provide ammunition against the biggest threat to the grocery currently – Amazon’s imminent entry into food arena. For the retailers that are named in the report – Aldi, Asda, Boots, Lidl, Morrisons, Sainsbury’s, Superdrug and Tesco – own label could prove to be a valuable lifeline that drives footfall into store.
The Which? findings also suggest that the trend for look-alike packaging is on the rise again, especially in the soft drinks and health categories. I’m not sure that’s comprehensively the case: as the category starts to reach a state of maturity, we’re seeing a concurrent confidence that matches own-label in the US.
In comparison to UK retailers, where own-label growth is unabated at 45 per cent, sales are pretty much static in the US at around 19 per cent but will now grow. The reason for this is primarily two-fold: own-label is trusted much more in the UK for being of better quality, or equal to, brands due to time (it’s been around for longer). This equal footing means retailers aren’t afraid to price own label in a similar range to branded competition, and sometimes even price it higher if it differentiates. Having shed the mantle of cheaper me-too, own label in the US is experimenting and innovating a great deal more than it used to when it was still in growth phase. Walgreen’s entrance into food with Nice and Delish is a good example of doing own label well.
In the UK, we’re already starting to see this happen. Retailers today have so much data from their customers that they’re trying different ideas in a variety of categories. As SBS’s design expert Parker Williams is noting, retailers are understanding that if a pack borrows too much from the category leader, its own relationship with shoppers will suffer.
There’s no question that Which? still has a point when it says that consumers are confused by copycat own labels, but also without doubt is that own label is also finally learning to go its own way. As pack experts, the trend we’re seeing emerge is going firmly in the direction of differentiation.
Ian Schofield is head of innovation at Sun Branding Solutions