Do Packaged Goods Have A Future?
It’s not a comfortable question for NameLab, but there’s enough weight on the “no” side of the scales to make it necessary to ask.
Today’s 30+ adult has spent maybe 15 years using the internet to learn about everything from sex to laundry detergent. These are the core consumers we all chase after. Their attitude toward laundry detergents is converging on “there’s not enough difference to justify a premium price for a specific brand”.
Shoppers aren’t abandoning brands wholesale. Even among savvy consumers, comfortable familiarity moves the orange Tide package from the shelf to the shopping cart. But most packaged goods marketers face steady consumer migration to store brands and generics. While the shelf view is pretty, all the fish seem pretty much the same.
This doesn’t seem to be a temporary effect of hard times. It showed up in segment research in the 70′s; grew some in the 80′s; accelerated in the 90′s; and shows no indication to slow down in this century. It’s not merely a U.S. market phenomenon. At NameLab, we don’t have access to data to suggest it’s worldwide, but we’ve observed similar consumer behavior in Japan.
Because defensive strategies are the order of the day, you find more and more national brands at far-less-than-retail prices in Wal-Mart, Costco and other discount retailers.
Offense would be innovation. Not “new lemon zest” in soap products, but meaningful new features and radical product ideas.
Package goods isn’t dead, it just needs a few companies like Apple to get consumers interested in brands based on important new products.