Labels could be the key to competing with store brands

As children, we remember the crestfallen feeling of coming home to find that our parents had bought store brand cereal instead of the box with our favorite cartoon character. As people get older, they learn to make more sensible decisions that are driven by personal finance, rather than a clever catchphrase or bright colors. However, everyone is susceptible to the power of strong branding, and smaller companies whose products appear in grocery stores can use appealing labels to compete with generic alternatives. 

Private label products at supermarket giants are produced en masse, so markdowns make it difficult for specialty makers to compete. A jar of gourmet olives may cost $16, while the supermarket version costs less than five. What customers who invest in premium food products believe is that their money buys a richer alternative. But courting shoppers away from the massive savings from buying store brands can be challenging for small brands. 

In October, a report by Deloitte found that nine in 10 Americans were substituting some of their favorite name brand groceries for the store brand option. This is partially due to creative presentation efforts that supermarkets have made to revamp packaging and diversify offerings. With the largest market share they’ve ever sported, those private-label brands have grown in popularity and consumer habits. Media Post said that third parties can compete with private labels by getting creative. 

“Brands must find new ways to reinforce loyalty,” writes Susan Frech. “The ones that are most likely to succeed are those that create a positive consumer experience around their brands during the entire length of their relationship with consumers.

Appealing custom printed labels can win customers with their depth of information, attractive design and evocation of a premium experience.