What’s in a (Brand) Name? How the Pandemic Tested Consumer Loyalty

74% of consumers compare both private-label and name-brand versions before purchasing

2020 gave retailers an opportunity to test the staying power of their house brands. As panic-shopping cleared grocery shelves, house brands were snapped up by consumers who were willing to purchase a new, more affordable label.

With the shelves fully restocked and spending levels projected to rise, will consumers continue to purchase house labels over their favorite nationally advertised brands?

In May 2021, we conducted a study of 2,132 consumers and asked them about the value of name brands, private labels and their current purchasing habits. Here’s what we learned.

Pandemic shopping experiences leave a mark

Consumer spending today is largely unchanged since before Covid, with 28% of consumers spending less, 34% spending more and 37% spending the same.

However, nearly a quarter of consumers say they’ve been spending more on private labels from house brands than name brands throughout the pandemic. Price and availability are the driving factors influencing private label purchasing decisions, and this behavior is likely to persist. Specifically, 52% of those who say they spend more on private label products plan to continue doing so after the pandemic subsides.

What’s the reason for this shift? The idea of a house brand being a substandard product has fundamentally changed for today’s consumers. Retailers are putting more effort into their house brands, and consumers have taken note.

When it comes to quality, 84% of consumers say private-label products almost always offer the same or higher quality as name-brand products, at lower prices. Further, consumers are evenly split over whether a name brand guarantees a higher quality product, with roughly half saying it does and half saying it doesn’t.

At the same time, name brands might be suffering from an identity crisis; only 10% of consumers strongly agree that name brands guarantee a high-quality product, while an overwhelming majority (89%) agree that private labels are a good alternative to name brands.

House brands that represent big business

Walmart has mastered the art of branding and owns over 300 brands in 20 categories. It’s Great Value line, which brings in around $27 billion in sales annually, is the company’s most extensively developed retail brand, covering hundreds of household consumable items, from sliced bread to light bulbs. In our study, 47% of consumers who are aware of the brand purchased a Great Value product within the past year. 

In terms of awareness, Great Value led the pack of house brands, with 60% of consumers saying they were aware of the label, the highest of all store brands. Costco’s Kirkland, CVS Health, Trader Joe’s, and Kroger all had awareness scores of 50%, however only 11% of consumers are familiar with Up&Up, one of Target’s leading house brands.

Personal products are a holdout for name brands

Name-brand personal care products still rank high for consumers. Half of consumers say they prefer name-brand personal care products, compared to only 14% of consumers who say they prefer private labels. Contrast this with other categories: only 20% of consumers prefer name-brand toys; 27% for clothing, 33% for groceries and 37% for alcohol.

Why are personal products resistant to the competitive pressures of store brands? It could be that these products tend to use claims and messaging to stand out to specific target audiences. This kind of savvy marketing usually requires product and packaging research to capture attention at retail.

It could also be that branding efforts for personal products are so successful that consumers are willing to pay a premium. Brands like Burt’s Bees, for example, have invested in sustainability and environmental messaging, and consumers have responded with high levels of recognition. According to a March 2021 study of 1,097 adults in the U.S., 55% of consumers named Burt’s Bees as a company who has taken positive actions to protect the environment. 

Maintaining mindshare and market share 

So, how do brand names maintain their equity and wallet share with consumers? And how can they evolve to keep up with customer perceptions and pricing pressures?

The answer starts with data. As purchase habits normalize and new buying trends emerge, brands have the opportunity to tap into what consumers want next.

Brand tracking solutions can help companies continuously measure brand performance and tap into consumer sentiment whenever they need it. Brands can track their vitals on a variety of metrics—from awareness to reputation—and spot changes in real time.

Trackers can be customized to monitor competitive threats and category sentiment over time. Instead of waiting months, companies get current, in-the-moment insights into brand health, filtering results by market, time period, demographics and more.

Long-term, brand tracking can help measure which attributes matter the most—whether it’s price, quality or availability—and analyze which values resonate with their target consumers. When used in conjunction with other market research tools, such as concept testing or attitudinal studies, brand tracking can be even more powerful.

For example, the Momentive Usage and Attitudes solution helps companies define their top consumer segments, what they care about, how they shop and the best way to get their attention. Collecting these insights in a complementary study can help companies better understand the “why” behind the shifts in trend data.

A pricing study is another way to identify the optimal price point for a brand. With Momentive Price Optimization, companies can identify the highest point a product can command using the Van Westendorp price sensitivity meter. This renowned and industry-accepted method can help you determine the right price for your product based on the perceived value it provides to customers.

What’s next? Using data to tap into new growth segments

While the scramble for products on the grocery shelves may be a thing of the past, all brands need to understand the next big purchase drivers.

The retail landscape is experiencing a generational change in consumer habits as Gen Z and Millennial purchasing habits begin to emerge. In a recent Momentive study conducted in June 2021 among a national sample of 5,934 adults, we found that Gen Z consumers want more from brands than just affordable and high-quality products; brand authenticity, transparency and sustainability are higher priorities for this age cohort than for older consumers.

For brands who want to tap into the next big purchase drivers, agile market research solutions are now available to help them understand the impact of their decisions around social values and consumer sentiment.

Morgan Molnar is the director of product marketing at Momentive (formerly SurveyMonkey), leading the brand and market insights team to build new, innovative research products and take them to market. Morgan has spent a decade in the market research industry, beginning her career at Nielsen consulting for CPG clients like Procter & Gamble.