Increase Store Loyalty Using House Brands

House brands—private label brands—offer your shoppers a price advantage. Traditionally, retailers price them at an average of 20% less than the national label brand. House brands also usually offer you higher profit margins than do the corresponding national label brands.
     Now research at University of Texas-Austin and University of Erlangen-Nuremberg finds that, under certain circumstances, house brands have the bonus advantage of building loyalty to your store. This effect is strongest when:

• Shoppers for the product category consider the alternatives carefully 
• Most shoppers for that product category are bargain hunters 
• Your store has the reputation of offering low prices on all merchandise 

     The upshot is for you to feature house brands in these circumstances.
     While you’re at it, check that the house brand incorporates your store name, or at least the package carries your store logo. When items carry the same brand name across product categories—such as a bath soap and a shampoo—you’d like to strengthen the brand image by having the same package design. Having almost identical package designs is common with house brands, where a consumer could be looking at tables and tacos during one shopping trip.
     Overall, using a similar package design to build brand image is a good idea from a shopper psychology perspective. Mere familiarity brings credibility.
     There’s a potential downside, though. Research findings from Wake Forest University and University of North Carolina–Greensboro suggest that when packaging is similar across items, the shopper senses a loss of control. The consequence might be that shoppers seek variety beyond the similarly branded items. The shopper becomes a bit less likely to buy the house brand across product categories unless you take steps to restore the sense of control.

• Use variations of the same name. At Trader Joe’s, you might see Trader Ming, Trader Jacques, and Trader Giotto. 
• Introduce distinctions by placing products with the same package design in different relative shelf positions for different product categories. With the mouthwash, the house brand is to the top left of the other brands, while with the toothpaste, the house brand is to the bottom right of the other brands. 
• Curb the routine with distinctive designs and color schemes on signage for different product categories. Researchers at Columbia University and University of British Columbia find that such techniques give the shopper a sense of control, and this sense of control curbs further variety seeking. 

Click below for more: 
Finesse Profit Margins on House Brands 
Build House Brand Equity with Distinction 
Arouse the Love for Your Store