Wake up and smell the own label coffee

The Economist this week has an article on the impact of the economic crisis on consumer goods purchases. It quotes PwC and McKinsey evidence that consumers have significantly changed their behaviour - such as by buying own-label products, by buying less, or conversely by buying bulk, or even by deciding that some things aren't as essential as they used to seem. (Air freshener, anyone?) Well, you heard it here first - six months ago, but the data goes to reinforce the point.

93% of shoppers say they have changed their behaviour as a result of the economic downturn. (PwC)
18% of packaged-goods buyers switched from a premium brand to a cheaper one during the recession, with most saying they found that the pricier brand “was not worth the money”. (McKinsey)

Even more alarming are some of the comments by the Economist's readers:

TomNightingale wrote: Oct 14th 2010 12:18 GMT
The price differences between branded goods and own brand are mainly spent on advertising, Advertising does not create value, it consumes valuable resources and returns little, if anything. The value of a brand is largely its ability to persuade people to pay a higher price than they need to to buy a product, Advertising and brands allow parasites to take good livings at the expense of others. If the recent/current economic woes leave advertisers and "branding experts" in difficulties we should all rejoice. We don't need them; they make us all worse off.

pasam wrote: Oct 14th 2010 12:47 GMT
If the recession leads to a "Needs based Society" than the present (or past?) "Advertisement Induced Society", then that is a "silver lining". Let the "shine" of parasitic advertisement be ignored and let the chemistry of needs take over.

It's not as though we haven't heard these anti-brand views before, and they aren't very well informed - they take no account of the role of brands in delivering innovation, consistency, reassurance, confidence or convenience, for example. (But then I would say that, I'm a parasitic "branding expert".) However, they do have a compelling basic thrust: products which only sustain their premium through advertising are in a precarious position.

The conclusion we must draw from recent consumer research (both quali and quanti - pretty consistent on this matter for months now) is that long term success means delivering a premium-justifying benefit. It can still be emotional - reward, status and so on - rather than rational - taste, quality, features - but it must exist. Large swathes of supermarket aisles are still filled with brands that don't truly offer a benefit. What's worse, I fear some brand managers haven't realised that the rules are changing, or have deluded themselves that their own brand has a "real" distinctiveness when all it actually has is residual market share supported by media share of voice and retail share of shelf. Wake up!