We know that everyone is buying store brands, but just how deep is consumers’ love for store brands? How many store brands are they buying across the store?

Growing acceptance
Nielsen’s analysis shows that consumer perception of store brand quality is strong; nearly three-quarters of U.S. households believe store brands are a good alternative to name brands, and nearly two-thirds of households say that store brand quality is just as good as that of name brands. And while name brands account for the majority of consumer packaged good (CPG) sales, Nielsen’s research into the depth of store brand buying shows just how consumers’ store brand behaviors and consumer attitudes are aligned.

How deep? Deep.
As consumers’ acceptance of store brands has grown, so has their store brand buying. We saw this trend occur between 1999 and 2005, and it continues into 2010. The number of households buying store brands in at least 41 Nielsen-defined categories jumped from 27 percent in 1999 to 41 percent in 2005 — and to 46 percent, nearly half of all households, in 2010.

The majority of store brand sales come from variety-seeking households. Recently, we’ve seen some growth of store brand purchases from mid-variety-seeking store brand buyers: those consumers purchasing store brands in 31 to 50 mega-categories. In mid 2008, 23 percent of households purchased store brands in 31 to 40 categories; through mid-2010, we see 24 percent of households purchasing this level of store brands. In mid 2008, 22 percent of households purchased store brands in 41 to 50 categories; this figure jumped slightly to 23 percent through mid-2010. In terms of the annual buying rate, however, we see increases in the depth of store brand purchases coming from the heaviest of variety-seeking buyers. Dollar buying rates among households who purchased store brands in 41- plus categories grew by an average of about 5 percent.

The bottom line? Nearly 70 percent of store brand dollar sales come from store brand variety-seekers: those consumers buying in 41- plus categories.

What you can do
What can you do in your stores to encourage more store brand purchases? Here are a couple of ideas:

• Reward your important store brand variety-seeking consumers with continuity-based promotions. Consider cash-back incentives for future shopping trips after certain thresholds of store brand spending. For example, $10 off the shopper’s next store visit after spending $100 on store brand products, or $10 off his or her next store visit after buying in 10 or more store brand categories.
• Encourage deeper levels of store brand buying. Implement repeat stimuli efforts toward households that have not yet demonstrated strong levels of store brand variety-seeking habits. Provide incentives to encourage this behavior. For example, cross-reference on-pack coupons (on high-volume store brand items) for purchases of other store brand items. Or direct mail coupons for purchases of store brand items not yet purchased to specific shoppers.

Consumers are no longer buying store brands solely for value pricing or budget shopping. Many consumers also appreciate the high quality of the products and consider store brands just as good as name brands. Take steps to make the most of this trend by rewarding your frequent store brand shoppers and encouraging new breeds of store brand buyers.

Straight Talk delivers monthly store brand insights from The Nielsen Co., New York. Todd Hale is Nielsen’s senior vice president, consumer & shopper insights.