A new Deloitte study confirms what brand marketers are already sensing: The buyers lost to private label brands during the recession don’t seem to be coming back.
There are several trends that have contributed to this dynamic. First, the perceived quality of private label brands has improved, at least in the mind of the consumer. Many shoppers have decided that these money-saving brands still deliver a perfectly adequate product.
At the same time, perceived differentiation between major brands has started to fade. A number of studies, including those conducted by Communicus, suggest that growing numbers of consumers are unable to identify meaningful differences between Major Brand A and Major Brand B. If you can’t tell how Brand A is better than Brand B, why should you feel that these are any different than private label brands?
We know from our research that advertising is critical to building and maintaining brand differentiation. Countless research studies have confirmed that advertising has the power to build important imagery dimensions for brands. Moreover, among those who go as briefly as a few months without seeing your advertising, brand perceptions can decline precipitously.
Another potentially negative pressure on brand differentiation is the way advertisers embrace new media. While forward-looking advertisers love the conversational opportunities that are inherent in Facebook, Twitter and other social media venues, real-time engagement may prove to be a brand’s downfall. As brands become more reactive, commenting on external events and consumer experiences, the brand’s identity risks becoming lost in the conversation. Brands that work too hard to be ‘just like you’ may lose the distinctive characteristics that made the consumer love them in the first place.
For brands to survive and thrive in a world in which private labels offer a reasonable quality alternative, the trick will be to use advertising to differentiate without losing your brand’s distinctive voice and persona. It’s not just about creating entertaining advertising, nor participating in every conversation. It’s about standing for something clear and distinctive, and not being shy about that when presenting the brand to consumers.
