Big brands are dying, pundits say. While it may be true that major national brands are experiencing some challenging times, we shouldn’t count them out just yet. While this issue of BRANDPackaging focuses on some of the recent success of private label, it is also appropriate to take a closer look at national brands.
Private label is emerging from the shadow of major CPG brands, and many retailers increasingly are realizing the benefits of embracing private label as a primary brand, says Jeff Gamsey, vp of private label at Boxed, an online wholesaler and retailer, in an interview with Retail Touch Points. “When you have a strong private brand, it creates value for customers, and becomes a reason why they shop at your stores instead of somewhere else.”
Meanwhile, a recent study led by Byron Sharp, a professor at Ehrenberg-Bass Institute at the University of South Australia, analyzed the performance of leading brands across 21 categories in the United States. The study found that 48 percent of the top five national brands increased sales revenue, while 40 percent lost some revenue.
“The notion that large brands are dying is simply not true. Nor has the world fundamentally changed in a way that favors small brands over big,” the study states. “We conclude that there have been some shifts in the marketing environment that have created new opportunities for some newcomers, but some of the current claims are overstated and others are blatantly wrong.”
The research, entitled “Are Big Brands Dying?” also rejected the idea that loyalty to established brands is in decline, particularly among young consumers. “Our analysis reveals that in more than 40 percent of cases, leading brands actually do better among under 25-year-old consumers than they do selling to older customers,” says Magda Nenycz-Thiel, a report co-author.
An article by Gordon Wyner, partner at Millward Brown Analytics, reports there is increasing conversation about whether brands, in general, are in decline. He says that some high-profile brands, especially in industries such as consumer packaged goods and services, have reported significant problems. The author asks whether these anecdotal observations about brands are indicative of something new or are they part of the normal ups and downs of brands over business cycles.
Wyner goes on to say that branding is just one of many aspects of business being influenced by changing technology and consumer preferences. “While specific brands may become disadvantaged, the broader ‘brand problem’ may be that brand building requires more work and different kinds of activities than it used to in simpler times. In other words, maybe the concept of brands is undergoing an evolution rather than a decline.” Wyner says that while many previously successful mass-market brands may decline, there will be more pathways for new brands to grow.
To ensure continued success, brands must ensure that they stay relevant to today’s consumers—no matter which generation they belong to, states Robert Plant, an associate professor at the University of Miami, writing in a blog for the Wall Street Journal. “Remaining relevant is not simply about selling to customers but about creating a firm and products that turn consumers into believers who become deeply and intensely attached to the company, its ethos and brand, making that brand a continuously relevant part of their life.”
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