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High-volume retailers pile demands on packaging

Retailers expect a lot from packaging, and few require more than club stores and other high-volume outlets.

Packaging for club stores and other high-volume retailers has to meet just three needs, says a major retailer’s packaging manager: “Make it jump off the shelf, solve all my logistics problems, and—by the way—it can’t cost me a fraction of a cent more.”

If those demands aren’t enough, two other factors further complicate the process of designing packaging aimed at meeting the specific needs of high-volume retailers:

• The splintering of club store and high-volume retailer packaging demands. They see packaging as a marketing tool, and each retailer wants different packaging to reinforce its market position. The result is more package variations and SKUs.

• The growth of supercenters as a dominant grocery channel is creating a new set of packaging needs.

Club stores are a fast-growing channel. Sales for 2005 were some $97.5 billion, say financial reports and industry estimates. That’s up more than 12% from 2004’s estimated $86.6 billion. Costco, Sam’s Club, and BJ’s Wholesale Club dominate the channel.

Packaging for this channel is getting more complex as retailers compete for market share. They see packaging as a weapon, and they often ask for packaging that is exclusive to them. Packagers respond with a range of solutions, from structural innovation in secondary packaging to graphic solutions on primary containers.

Structure addresses logistics

In looking at the structural side, Tom Taylor, general manager of Wilpak Inc., observes, “The club stores are each different—they want original ideas and packaging designs. If you have a pallet for BJ’s that is two-high, then Costco has to have it three-high, and Sam’s wants it four-high.”

Based in Atlanta, GA, Wilpak is a contract packager that does a lot of club store packaging. Based on the company’s experience, Taylor offers these ideas on getting the most out of packaging from the structural perspective:

“No matter how it is going to be displayed, you have to adhere to the club stores’ packaging requirements. They all have sets of freight rules—ISTA regs, pre-shipment rules, freight carrier rules. They adhere consistently to these rules.”

In theory, that could mean shipping tests for each new pallet configuration, but Taylor suggests that packagers work with a standard set of cases or trays and build variations around them, avoiding the need for extensive testing on each variation.

“You don’t want to have to validate every pallet. If you have a standard display tray, and it has gone through the testing, you don’t have to go through all that again,” he says. “You ultimately reduce your costs with larger order quantities. You help your bottom line by minimizing those costs.”

An example comes in a club store display tray from Clorox; it won a 2005 AmeriStar Award. The tray has an innovative structural design that allows it to be erected by machine. Says Randy Wood of Clorox, “It gives us a 40% reduction in the amount of corrugated compared to manually erected trays of the equivalent size. It doesn’t have quite the stacking strength of other cases, but we add heavy corner posts on pallets so we can stack them.”

According to Wood, the machine that erects trays uses off-the-shelf components put together in an unusual way to automatically set up trays. It permits changeovers between three sizes of trays, letting Clorox “mass customize” loads.

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