How online grocery shopping drives private label food purchases

Private labels (PL) have become increasingly popular during the past decades, with market shares steadily growing worldwide. At the same time, consumers are increasingly switching from traditional brick-and-mortar grocery shopping to online grocery shopping. What does this shift to the online channel mean for PL and national brand (NB) sales? Using a database study and two laboratory experiments, we demonstrate that consumers buy relatively more PL food products online than offline. Moreover, we show that this shopping channel effect arises because consumers rely less on heuristics based on external product cues (price, brand name, and packaging) to infer product quality, which leads them to perceive a smaller quality gap between PL and NB when shopping for groceries online (vs. offline). These findings have implications for academics, retailers, manufacturers, and consumers.

Automated summary

Private labels (PL) have gained popularity globally, with consumers increasingly shifting from traditional grocery shopping to online shopping. When shopping for groceries online, consumers rely less on external product cues (price, brand name, and packaging) and perceive a smaller quality gap between PL and national brand (NB) products, leading to higher PL sales. These findings have implications for academics, retailers, manufacturers, and consumers.