Consumers are defecting from iconic CPG brands as they try to save money by purchasing less-expensive store and private-label brands.
While this trend is not new, it has become more pervasive since the economic downturn started in December 2007, per eMarketer.
In fact, 59 percent of U.S. consumers reported having switched to store brand food and household products over the past six months, according to a May 2009 study by ICOM.
A study by the CMO Council and Pointer Media Network found that among 12 leading CPG brands, only three experienced increases in the number of loyal consumers between the first half of 2007 and the first half of 2008. The other nine experienced overall declines ranging from 2 percent to 9 percent. The study analyzed purchasing patterns of 34 million U.S. shoppers for two years across 685 leading CPG brands and 24,000 retail stores.
In today’s recession, even lifelong devotees may bolt for lower-priced store brands. Offering coupons and samples does not necessarily seal the deal. CPG marketers need to get more creative, and fast. They must find new ways to reward loyalists while also luring prospects to their brands.