Consumer’s attitudes towards branded products are shifting, causing an evolution in where Australians are choosing to shop and the prevalence of private-retail branding, according to the latest survey from Roy Morgan Research.
The choice whether to purchase big-name brands or private-label items often dictates where individuals can shop, due to stores’ own brands being traditionally found in discount, rather than department, stores.
More than two-thirds (38 per cent) of Australian consumers aged over 14 agree that they purchase more private-brand products than designer or big-brand items. However, this choice varied significantly among shoppers who frequented certain stores, with discount store customers more likely to prefer private-branded products compared with department store shoppers.
In particular, those who frequented Target (38 per cent), Big W (40 per cent) and Kmart (43 per cent) purchased stores’ own brand significantly more than customers of Harris Scarfe (27 per cent) and David Jones (22 per cent).
“Different kinds of customers differ dramatically in their attitudes to home-brands. Shoppers at Kmart are more comfortable and accustomed to buying store-branded labels, as are Big W and Target customers,” Roy Morgan Consumer Products Group Account Director Warren Reid explained.
This result may be troubling for certain retailers in Australia, particularly with the announcement that David Jones plans to add more private-label products to its offerings. This could influence a change in consumer attitudes, as department store private-branding becomes more acceptable among consumers, leading to a decline in spending on high-market big brands.
“Department store David Jones plans to build on its repertoire of private-label products by adding four new lines to their fashion menu, with the goal of improving sales in this product category,” Mr Reid said.
“If these new products are of the same quality and style you’d expect from such a high-end retailer, then today’s private-label brands could well become ‘exclusive’ brands in their own right.”
Mr Reid believes that the success of this new retail trend will rest almost entirely on how much time and effort David Jones invests on branding activity. Once the success or failure of this endeavour is clear, smaller retailers in Australia will have a better idea of whether consumers will accept an increase of stores’ own brands.