The modern retail-packaging conundrum

What is the role of product packaging, given the fast-changing face of retailing and consumer demand now?

Some marketers contend that packaging should serve as a marketing vehicle and a means of meeting consumers’ needs. Others say that packaging should help differentiate brands to set the stage for consumer brand preferences.

Still other marketers think packaging should make products easier to find in over-assorted retail environments. All of these ideas have merit, but present too simple a view given the complexities of marketing to today’s consumers within distinctly different retail environments.

Retailers have undergone a marketing transformation. They are now in the business of building brands. Their own. Retailers’ focus is on aligning their merchandise mixes: private label as well as national brands, and the shopping experiences they provide as distinct and unique; a reflection of strategically developed branding in alignment with consumer perceptions.

When consumers are scanning retail shelves packed with competitive choices for a precious few seconds before making a decision, connections have to be made quickly and convincingly. Pretty product packaging isn’t sufficient. Great graphics, color, and a strong brand identity are par for the course in today’s marketplace. Brand packaging has to be more unique and distinctive in structure or emotional cues to resonate now. The elements of whimsy, surprise, retro, sensory stimulation or luxury can be used in packaging to deliver brands to consumers in more memorable ways.

Tip: Consumers are increasingly exercising control in fashioning their own experiences. Retailers that deliver the kinds of experiences consumers are seeking will win in the marketplace.

What consumer research tells us

What kinds of experiences do consumers respond to best? We’ve uncovered principle consumer drivers in our research. These include: creation of greater perceived brand value vs. competitors’ brands; clearly delineated brand differences, with uncomplicated, direct packaging communication; perceived lifestyle fit; upscale, more luxury-oriented branding for consumers who have, or aspire to have, more status; and the delivery of enjoyment assets.

Tip: We humans respond to product brands that deliver enjoyment or fulfill emotional desires. Brand assets that can be leveraged in packaging to give consumers pleasure and enjoyment are powerful purchase motivators—and also repeat purchase motivators. Endeavor to uncover them.

Consumer drivers must be delivered in package design to play to consumers’ deepest desires, not only their needs. Think about it. All consumers need to purchase the basics of life. So why does one commodity brand outsell another? What drives consumers to find one shampoo or packaged coffee brand more desirable than another? The intangible assets around the branded product are the dealmakers or breakers. These intangibles have to be sold in large part by packaging.

If products fail in the marketplace, brand managers must ask themselves whether ineffective packaging is a contributing factor. Did consumers overlook the products because they simply overlooked the packaging? If packaging isn’t compelling on the shelf, if it doesn’t appeal to emotions or deeper desires, do consumers have adequate reason to consider the products?

Packaging in retail context

Retail needs and consumer expectations are increasingly dictating packaging decisions. Not only must package design consultants research core brand attributes and leverage those in packaging, they also must develop it in retail context.
Private-label brands have to differentiate retailers strategically from competitors in the eyes of consumers by affirming their unique positioning. Retailers’ private-label brands are competing with established national brands more than ever before. About one out of every four products sold in the U.S. is a private-label product.

Packaging for national brands has to be tweaked for various retail channels. When packaging products for Wal-Mart supercenters or club stores, the focus is on a price-to-value ratio. Large pack and multi-pack offerings benefit from the strong use of color and graphics in palletized, no-frills packaging in club stores. A limited hierarchy of product information on packaging of this nature, coupled with bold graphics, wins over the club store consumer. Both consumer and retailer focus are on highly visible brands at the best prices at Wal-Mart.

Small pack sizes, quality imagery, and communication are geared to sell brand value rather than price for supermarket and drug chains. Consumers in these environments are increasingly information hungry. Where were the products sourced from? Are they quality conscious? Are they safe? Can they be trusted? Remember that even quality brands have been compromised due to outsourcing concerns in recent months. Both retailers and manufacturers need to find ways to communicate this information satisfactorily to the consumer through on-pack, off-pack, and in-store measures for both food and non-food brands.

Tip: Within categories, what unique consumer cues can be leveraged on packaging to make connections with them, avoiding the dreaded commodity trap in the process?

At the other end of the spectrum, upscale and specialty retailers such as Fortunoff, REI, and Williams-Sonoma sell lifestyle and luxury branded products to consumers. In these environments, consumers invest emotionally both in the shopping experience and in the retail brand itself.

Upscale packaging delivers emotional assets: a sense of well-being, enjoyment, and a lifestyle fit—real or aspired—making both the retail and the product brands deeply satisfying by association. Packaging employs high-quality visuals, specific cues that point to lifestyle or luxury, and language conveying the desirability and image of both product and retail brand.

Tip: Customer-centric service has to be offered at an uncompromising, high level to seal the deal and the brand image for these retailers’ customers.

Then there is national discounter Target. Because its positioning and the shopping experience it offers are distinctive, Target commands a loyal customer following. Interestingly, consumers shop at Target on price for commodity items, but they also seek lifestyle products filled with perceived value and emotional appeal. Target offers packaged consumer products that are aligned with its brand. Wal-Mart will always win on price. But Target proves that discounters can own distinct brand identities other than “the lowest price.”

Consumers are clearly in charge and looking for more than features and benefits in the brands they choose. They’re searching for connections, making it imperative for retailers to deliver emotionally satisfying experiences in product brands, packaging and the shopping experience or face marketplace irrelevance and demise.

Join the conversation: You’re invited to weigh in by sharing your own experiences and insights on retail packaging issues with Shelf Impact! readers at george@packworld.com.

The author, Ted Mininni is president of Design Force Inc., a metro New York consultancy that specializes in brand identity and package design for the food, beverage, toy, and entertainment industries. Contact Ted at 856-810-2277 or tmininni@designforceinc.com.

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