Are brands winding down? | Advantage Brands

Marketing Lifestyle Brands has always been the toughest proposition, esp as now lines blur with services brands and the social internet.

With the infestation of private labels in the 90s in the US, the social milieu there has turned distinctly fragmented, ripe for the rise of private labels in supermarkets from Walgreens to Walmart. However, white labeled goods have never gone beyond a certain plateau in market share, and after the continuing battles with recession, the debate was nearly lost in the public mind.

Deloitte argued in a report that store brands no longer suffer from “the stigma of inferior quality” among most American consumers.

As evidence of this, the consultancy quoted IRI figures showing the market share of these offerings rose by 74% across the personal care, household, food and beverage categories between 2006 and 2009.

Overall, this equated to more than 23% of volume sales, and 18% of value sales, in the CPG segment in America last year.

Private label now accounts for 20% of purchases made in grocery chains and 18% in supermarkets, with each of these trends beginning before the recession and accelerating during the crisis.

A primary reason for this shift is the 31% price deferential between ranges manufactured directly by retailers and their well-known competitors.

Our hat tip comes from this Warc push on Friday

This seems to be a curious harbinger for things to come. Especially as this kicks off the argument about US corps also taking their brands internationally devoting more spend here in India and China than in hometown. However, In store brands have come a long way. Target in store brands have premium offerings like Up & Up. Costco has gone in for a new co branding phenomenon, with Starbucks, Quaker oats and Tyson.

Denting Brands is not going to be viable for most hyper mart / supermarket chains. Brand investments outlast most other corporate purchases as denominators of value. Similarly services like Research cannot be effectively branded as the value in reading an analysis cannot be tied to one market player, either as bank or as Goldman Sachs.

Asking the social networks like Twitter and Facebook to denote the decline or rise of brands will always be a tenuous link. Claiming that a Twitter can lead to local retail awareness, does not really affect bigger brands in their brand foot print. Investment barriers and those of process certifications tied to environment and quality will not let many into the big league anyway.

Where is the quest for premium today? | Advantage Brands

Not many local brands famous on twitter would go beyond their current district. Foursquare mayors, though, have a better chance in that selection of services much like Kenichi Ohmae’s Infomediaries and that is a road less traveled as well. Of course twitter has its own problems, but social networks and their dominance is a definite fact for the next decade and more even as form and shape of technology gets more human. But that does not enable the local Mom and Pop pizza man to become the next Mcdonalds and neither in-store McDonalds to become a celebrity phenomenon. That is still much a function of live interaction at the counter.

In fact, McDonalds’ in store and in office cafes have only strengthened and carried forward the global giant’s brand into a distinct orbit that if sustained will strengthen live interaction with menu choices and not dull takeaways or even the diminishing store interactions for McDonalds’ current franchisees which is for staple fare.

Starbucks on the other hand is already leveraging the social networks to sustain its brand premium and offer promotions and discounts effectively at the same time. Similar stories are likely to bring out more brand successes to the fore than white labeled goods from the corner grocery shop and the chinese lady.