Purchasing of store-brand or private label automotive parts is on the rise, according to a recent blog post by IMR Automotive Research. Per IMR:

“Almost 2/3rds of shops plan on increasing their purchases over the next two year which is driven by lower prices, availability and their belief that private-label/store-brand parts are of equal or better quality.”

IMR Automotive Research infographic automotive parts purchasing trends
This infographic originally appeared on IMR Automotive Research

Not Just An Automotive Trend

This is a trend Martec is seeing across the different markets we study – from automotive to food & beverages to healthcare. Increasingly, consumers choose store-brand or private-label products over their branded counterparts. But what is driving this trend?

According to research by Nielsen, 2017 saw a big change in growth trajectory for store-brands, with private-label/store-brand annual growth rate up 3% while branded product growth was down 0.5%. That’s more than three times the growth rate of branded products. Although one might expect price to be the driving factor in this preference for store-brand or private-label, this is not the case.

Quality and Changing Purchase Patterns Drive Growth

Despite the current economic boom, consumers are still choosing store-brand or private-label products. The shift is due in part to the millennial generation’s purchase patterns, as millennials care more about a product aligning with their belief systems (i.e. environmentally friendly, sustainable, etc.) than previous generations. Today’s consumer demands transparency in nearly every aspect of their life: from food products to fashion to data privacy and beyond. Consumers have lost trust in manufacturers and big business, and are fighting back with their wallets.

Consumers today have more trust in the retailer, so are more likely to buy the retailer’s store-brand product. But why the increased trust in retailers? One major factor is the improving quality of off-brand products, according to the National Retail Federation. Big-box retailers such as Aldi, Costco, and Trader Joe’s (among others) have made a point to demonstrate that you can have high-quality products without the cost of a brand name.

Impact on Service-Industry Markets and More

All of this fits with Martec’s own research, particularly in service industry markets from automotive to food service, even healthcare. In these markets, availability and getting the customer or patient “back on the road” is crucial, and if the customer trusts the quality (which is the case now) then availability often is the difference maker. The rise of private label/store brands is definitely higher in “mission critical” markets such as auto repair, as evidenced in IMR Automotive Research’s latest blog.

This trend in store-brand or private-label products will likely continue to grow as long as consumers and B2B buyers feel confident purchasing “off-brand” products. To keep buyers feeling confident, producers and suppliers must focus on improving quality and transparency for today’s generation of consumers.

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