Generic brands are having a moment in the U.S. Sixty-three percent of people now report that they prefer a generic over a name brand when available. Since 2015, the generic market share has climbed 7.4% and now claims 16.6% of the pharmaceutical market.
However, none of this comes easy. Generic brands, in the absence of household reputation, must make significant investments in search and display. L2’s study on the digital performance of OTC Healthcare brands finds generic brands account for 15% of total search results across the 194 category keyword searches performed on Amazon. Furthermore, generic brands owned by e-tailers and retailers have a distinct advantage. Walmart-owned Equate, for example, appears in search results for 100% of search terms on Walmart.com. And search results for equate occupied 11 times as many top five (101) results on Walmart.com than top performing Index brand Dr. Scholl’s (9).
Brands can mitigate the generics threat by investing in display ads, sponsored product listings, and brand storefronts on select e-tailers. Some brands have started to do so. For example, Walmart (which poses the highest threat because of in-house brand equate) has the highest number of brands advertising across the platform. Likewise, 63% appear in Sponsored Listings on Walmart product pages of their competitors. Brand paged remain under-utilized, as just 19% of brands have built a brand store on Amazon and two brands (Nicorette/Nicoderm CQ and Poise) have done so on Walmart.
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