Unlocking total spending
To put it simply: The debate is over—consumers around the world are sold on private labels. As retailers’ investments in improving private labels paid off, private label sales reached new heights. In a recent NIQ survey of online consumers in 25 countries, most surveyed respondents agreed private labels are both good value for the money (69%) and good alternatives to name brands (68%).
Recently, however, while share of sales has risen 1.4 points globally, growth is slowing in all regions. Meanwhile, global brands are growing momentum. In fact, the top 10 global brands are now outpacing private label sales growth versus a year ago.
These trends don’t have to result in growing competition—or a race to the bottom. Changes in consumer mindset and generational traits are making a win-win solution possible. The keys to the future lie in unlocking total category and generational spending. The most efficient and fruitful path forward is for retailers and manufacturers to collaborate, with dual resources, symbiotic opportunities, and an eye to harmonious growth.
This report reveals what’s driving change in consumer mindsets.
We also dig deep into the symbiotic dynamics making collaboration possible, and we conclude with identifying specific opportunities for retailers and manufacturers. Below is a snapshot of selected highlights from the report.
1: Consumer outlook on private labels and brands
Private label products have closed the gap in consumer perceptions of quality and bolstered consumers’ view of their value proposition. As consumers are beginning to evolve their inflationary spending mindsets, we’re seeing the top global brands building sales as well. The major factors behind these changing brand dynamics are a shift in consumer financial stability, consumers’ confidence in the future, and feelings of increased spending flexibility.
Significantly, more shoppers—especially younger ones—are more open to splurging. More than half of global consumers say they’re likely to treat themselves by upgrading to a premium-brand product, with younger generations—Millennials (61%) and Gen Z (58%)—exceeding that average.
Most consumers—particularly younger generations—are open to splurging on premium options. When it comes to premiumization, some factors are more influential than others.
54% of global consumers say they’re likely to treat themselves by upgrading to a premium brand product
These stated shopper motivations start to paint a picture of a more democratized brand playing field than we’ve ever seen before—and highlight the opportunity that exists for all brands to be lifted by the same tide of collaboration.
A rising tide can lift all boats
Every organization has the chance to help grow the size of prize with consumers. Seize consumers’ openness to trying “whichever” brand fits their needs.
58%
of global consumers say brand or store brand is irrelevant; they just buy what they need
58%
of global consumers say they’re buying more brands, across more categories than ever before
65%
of global consumers say if they look hard enough, they can find a brand that fits their exact needs
2: Finding harmony on the shelf
For private labels, above all else, consumers around the world expect value and availability. But for name brands, consumers expect and prioritize other factors: notoriety, wide assortment, and omni availability. What if the traits that consumers are looking for in your competitors’ products could be used in your favor, to allow you to grow alongside them?
In the chart above, we can see NIQ’s latest global assessment of some of the prominent symbiotic dynamics that both private labels and branded products can lean on for mutual success.
Finding harmony
You can struggle to survive alone—or strive to grow the overall size of prize.
Private labels and brands can lean on unique symbiotic dynamics to collaborate, rather than directly compete.
3: From competition to collaboration
While opportunities for harmony on the shelf may be more prevalent now than at any other time, there will always be some unavoidable competitive dynamics for private label and branded products to keep in mind when trying to find growth.
Inherent strengths of retail-owned brands will continue to challenge the way name-brand products become accessible—and appeal—to consumers. These challenges include price undercutting, shelf space competition, and perceptions of parity. There are always going to be shoppers who simply shop for the most affordable product.
45%
of global consumers say that some of their favorite name brands no longer seem to be available when searched for
On the flip side, private labels have a number of hurdles to overcome with respect to name brands. In these instances, branded products have continued to demonstrate their worth to consumers and typically have a longer legacy of nostalgic or recognizable messaging and brand equity to lean on. The key challenges include brand loyalty, category dominance, and nostalgia and trust.
47%
of global consumers say that name brands are worth the extra price
4: The road to mutual success
Today’s omnichannel consumers are eager to find the products they seek wherever they shop. The omnichannel universe has expanded into so many tangents of opportunity, and consumers are learning about, interacting with, and shopping for products in many physical and digital ways all at once. With that in mind, we encounter what might be a perfect (and powerfully rising) platform to enable such omnichannel collaboration and interaction with consumers: retail media.
If you haven’t already heard of them, retail media networks, or RMNs, are advertising platforms that operate within an e-commerce environment. They provide brands with opportunities to showcase their products to highly targeted audiences—directly on the platforms where consumers make their purchasing decisions. Those that can harness their presence on RMNs stand to gain the most.
RMNs
=
a “Win-Win-Win” for all
For retailers
Maximize ad revenue and category sales
- Higher ad revenue from both name brands and private labels
- Higher total category sales enabled by strategic ad placements
- Heightened consumer loyalty driven by relevant, personalized ads
For brands
Precision targeting and enhanced positioning
- Storytelling and better RMN ad placements to strengthen premium positioning
- Access to new data for targeting consumers granularly
- Foster coexistence with private labels for category growth—without direct competition
For private labels
Maximize ad revenue and category sales
- Heightened discoverability and credibility fostered by (brand-funded) RMN co-promotions
- Enhanced path to targeting value-driven shoppers with minimal marketing spend
- Exposure to the same set of shopper segments being actively engaged by name brands
There’s never been a better time for organizations to rally together to find ways to grow the overall size of prize with consumers.
Instead of struggling alone to survive, work collectively to find harmony on—and beyond—the shelf. Our report concludes with specific guidelines for retailers and manufacturers to highlight what matters most—and what to do next.
Here at NIQ, we are already beginning this great journey with the CPG industry, helping to reveal what’s next for brands all around the world.
From strengthening brand engagement through market-tested consumer insights and helping brands optimize performance across RMNs to uncovering global market performance shifts and providing brand-specific line of sight into consumer behavior shifts, NIQ has a full view of analytic and consultative resources to take your products to new, collaborative, growth-oriented heights.
Join us on your journey to finding harmony between your fellow branded or private label products.
We’re strengthening brand engagement through market-tested consumer insights.
Learn more about NIQ BASES Innovation Testing
We’re uncovering
a world of market performance shifts
in-store and online.
Learn more using NIQ Market Measurement solutions
We’re providing brand-specific line of sight into consumer buying behavior.
Learn more with NIQ Consumer Behavior & Insights
We’re helping brands optimize performance across RMNs.
Learn via NIQ Activate Retail Media Intelligence
Let’s chat about your 2025 growth plan.
Lauren Fernandes is a data-driven thought leader and content strategist, serving as Vice President of Global Thought Leadership, Marketing & Communications for NIQ. Based in Toronto, Canada, she has a passion for exploring emerging trends and shifting consumer behaviors. Her work has scaled global audiences and clientele, helping manufacturers and retailers make more informed business decisions. For the past decade, Lauren has enjoyed sharing her perspectives and analytic pursuits via thought leadership content, industry publications, and to diverse audiences within the NIQ network and beyond.
