Triggering brand switching in online stores: The effectiveness of recommendations for private labels versus national brands

Abstract

As consumers increasingly shift toward online grocery shopping, reconsiderations of traditional marketing tactics become necessary, both to test whether they remain applicable online and to find new options that are specific to online channels. One such novel tactic might entail recommending private-label alternatives for products that consumers have added to their shopping carts. Three experiments indicate that when consumers receive recommendations to switch out a chosen brand for an alternative, they are more likely to switch if the recommended product is a private-label rather than national brand. The recommendations seemingly serve as quality signals, and private-label offerings have more to gain from such quality signals than national brands. This effect is prominent for consumers with low brand loyalty levels; it becomes attenuated for very brand loyal consumers though.