Long gone are the days of no-frills packaging intended only for those on a tight budget—private labels, also known as store brands, are no longer viewed simply as low-cost alternatives to name brands. They’re increasingly high-quality products that fulfill consumer needs across a variety of price points.
Shoppers have noticed this shift and are responding positively. Today, perceptions about private label are overwhelmingly favorable—almost three-quarters of global respondents (71%) say private-label quality has improved over time. A door once opened by economic necessity has widened to include a variety of private-label products that remain viable and trusted for many consumers worldwide.
To understand current consumer perceptions about private-label quality, value, assortment and packaging, Nielsen polled more than 30,000 online consumers in 60 countries. While regional perceptions about private label vary greatly, a few universal truths emerged around the world:
Price is important to most consumers and is the primary driver of consumers’ purchase intent for private label. Sixty-nine percent of respondents globally feel it’s important to get the best price on a product. Moreover, 70% say they purchase private label to save money.
Private label’s appeal goes beyond price. Consumers are also seeking quality and value, and a majority of respondents find that private label delivers on both of these attributes. Two-thirds (67%) believe private label offers extremely good value for money, and 62% say buying private label makes them feel like a smart shopper.
But do these enthusiastic attitudes translate into sales? The answer depends on the market. In terms of private-label sales development, the world can be divided into two distinct spheres: the developed world (Europe, North America and the Pacific) and the developing world (Latin America, Asia and Africa/Middle East). While value share is at or above 15% in developed regions (and as high as 45% in Europe), it is below 10% in most developing countries in the study. In fact, it is 5% or less in key markets, such as China, India and Brazil.
While learnings about private label success in one market can help in another, there is no cookie-cutter approach for all. Private label growth requires custom-fit approaches for each market. Findings from Nielsen’s study reveal:
- Private-label success is strongest in commodity-driven, high-purchase categories and those where consumers perceive little differentiation.
- Private-label growth typically comes at the expense of small- and mid-sized brands, while category leaders remain relatively safe.
- Retail consolidation and the expansion of the discount format are key drivers for private-label growth in developed markets.
- Private label struggles to gain consumer trust in Asia and the Middle East, where consumers are fiercely brand-loyal.
The report also discusses:
- The assortment challenge: What do consumers want to see on shelves?
- Which product categories are best suited for private-label and brand-name offerings.
- How you can optimize private-label retail strategies in both developed and developing markets.
For more detail and insight, download Nielsen’s Global Private Label Survey.
About the Nielsen Global Survey
The findings in this survey are based on respondents with online access across 60 countries. While an online survey methodology allows for tremendous scale and global reach, it provides a perspective only on the habits of existing Internet users, not total populations. In developing markets where online penetration has not reached majority potential, audiences may be younger and more affluent than the general population of that country. Additionally, survey responses are based on claimed behavior, rather than actual metered data.