An article on the Daily Dog caught my eye recently. The headline read…

“America’s Household Brands Are Rapidly Losing Ground to Store Brands” and “Consumers Have No Regrets Dropping Them as 9 in 10 Stick to Store Brands”

It went on to say the Deloitte’s American Pantry Study looked at more than 375 brands across 30 product categories and found that consumers are becoming more “resourceful,” attributing the change primarily to tighter household budgets. Consequently, brand loyalty is waning.

And to that, I say, “Well, maybe… ?”

Not because I haven’t changed my own buying patterns. I have. And not because I don’t think the survey is valid. I do. I say “maybe” because it hasn’t been, nor will be in the future, all about price. Certainly, it matters. But there are so many other factors that contribute to consumer decisions. Product attributes and brand benefits play a major role. Colors, words, pictures, smells, thoughts, experiences, referrals, conveniences, sounds, and feelings evoked around the brand also contribute to brand preference… even when money is tighter. So what exactly went on when those brands lost out to the store brands? Without further research, my theory is that one of two things happened:

1) They quit advertising, or …
2) They no longer held a relevant, differentiating, strategic advantage over the non-branded products.

To the first point, it’s pretty simple. Advertising breeds familiarity. Familiarity breeds trust. And according to the article, the trusted brands (names like Downy, Huggies and Tide) were still holding their own. The second point is a little more complicated. It takes commitment to innovate and meet (or even foresee) the constantly changing needs of the consumer in ways that are different from the competition. I suppose Crest got its start with one simple type of toothpaste. But did you know that today, there are no less than 60 variations of Crest products… each meeting a slightly (and in some cases not so slightly) different consumer need.

The reality is, any brand lacking this type of pursuit runs the risk of being relevant to the consumer only on the basis of price. Certainly, some brands choose this route, and it’s a viable one for a very limited number of players. But most of the manufacturers we work with don’t want to be the low price leader in their markets. When that’s the case, creating new product categories, new product innovations, new distribution methods, and promoting all of these, are critical.

I had to laugh when I re-posted the Daily Dog article on LinkedIn, and someone critical of the post asked what it had to do with manufacturers and their dealer networks. “Okay,” I thought to myself, “So it’s an article about consumer packaged goods (CPG) and not OEMs. But REALLY? You can’t make the connection?!”

Relevance is the driving force behind ALL consumer buying decisions, whether they’re purchasing a tube of toothpaste or an RV, a bag of chips, or a lawnmower. When consumer decisions are made on price alone, it’s sometimes a sign of other missing potential relevancies. And it’s these relevancies that may steer the consumer from a decision based on price to one that might just enable the brand to be a little more profitable, having added value instead of simply cutting costs.