Shelf impact starts in the customer’s mind

Skilful optimisation of point-of-sale packaging has never been more important for food and beverage brand owners. A key component is ensuring that primary and secondary packaging designs, materials and missions are fully aligned in order to attract consumers and satisfy their needs.

Consumer brands today face many challenges – from an explosion in the number of competitors and the resulting struggle to get noticed on the retail shelf, to rising demand for sustainability and changing consumer demographics.

“The increase in single-person households, and the rise of e-commerce and environmental awareness — all driven in part by the Millennial generation — is impacting shopping habits and consumer preferences,” says Stijn DeWit, Head of Marketing & Communication, Mondi Consumer Packaging.

Data show that Millennials now outnumber Baby Boomers and are growing in purchasing power. The Brookings Institution, in a May 2014 paper about the impact of Millennials in the United States, predicted that, “by 2025 they will make up as much as 75 percent of the workforce.”

Goldman Sachs also offers compelling data , pointing out that Millennials are about to move into their prime spending years and will be “reshaping the retail space.”

These future decision-makers are more likely than their parents to demand healthier, more environmentally responsible products that generate less waste while offering user-friendly convenience that fits their lifestyles. Think: fresh, natural, portable, easy open, reclosable, recyclable, reusable and, last but not least, authentic. 

Meanwhile, with Food Marketing Institute research showing that the “average” grocery store carries nearly 39,000 items, it is easy to understand why packaging, brand awareness, messaging and shelf positioning are vital to getting noticed. And the quality of that packaging directly impacts brand image.

Various studies have indicated that a majority of purchase decisions are made by shoppers once they are in the store – that’s true for 76 percent of buying decisions in the USA, according to a 2012 POPAI Shopper Engagement Study , and for not less than 53 percent in the UK, according to a July 2016 report in Forbes . This clearly raises the stakes for product and package design in terms of shape, colour, patterns and the like, in such a highly competitive environment.

“Research suggests that well-executed point-of-sale (POS) product presentation can boost sales significantly,” notes Andrea Richardson, Marketing Manager, Mondi Corrugated Packaging. She points to a February 2016 Nielsen study that states, “a successful package redesign can yield 7x return on investment for a small brand, and even greater returns for a large brand.”

Adds DeWit: “Packaging is the new advertising. Still, we see that many companies are missing opportunities here.”

As more stores introduce and emphasise their own private-label brands, they are keenly interested in having these portfolios project quality and authenticity, as well as convenience and environmental friendliness. These brands are seeking to deliver more than a product or a sales pitch; they’re aiming to deliver a lifestyle experience.

It’s important, too, to note that consumers increasingly are impatient with poorly executed products and packaging, and those consumers now, via social media, have multiple channels through which to easily share their delight – and their frustration – with potentially thousands of friends and followers. This vastly raises the stakes of executing your product packaging well.

So, how is a brand owner to respond?

Packaging is the new advertising. Still, we see that many companies are missing opportunities here.

It is key for such product makers to strive first for internal alignment among all vested parties – to include procurement, marketing, design, supply chain, and category managers, according to DeWit. Too often, these departments operate in silos and fail to cooperate or communicate adequately during the development process.

To this end, Richardson suggests that brand owners “work backwards” to win at the shelf. By that, she means they should start their packaging development journey at the end of the supply chain. Brand owners must fully understand the customer’s needs and values, and then develop an authentic experience for them, through package design that has shelf appeal.

This also requires thinking about all aspects of efficiency from the perspective of the store, transportation and production. After all, it does not help the bottom line to have a package that is highly efficient to transport, but has flaws that negatively impact its store presentation.

Both Richardson and DeWit strongly recommend a joint, cooperative approach between all those involved in product creation and brand design, primary and secondary packaging, and POS placement. A fully aligned approach, they note, can result not only in higher sales, but also in more efficient packaging and lower transport costs.  

Every brand manager should have packaging compatibility in mind. Full-service suppliers can ensure compatibility and increase impact on the shelf, while also speeding the time to market.

At Mondi Group, our business is fully integrated across the packaging and paper value chain in our 30 countries of operation, from managing forests and producing pulp, paper and flexible plastics, to developing and manufacturing effective industrial and consumer packaging solutions. Full-service firms such as ours are well positioned to help brand owners conceive and create functional, sustainable, eye-catching solutions.

“This is the opportunity of coordinating primary and secondary packaging,” notes Richardson. “Proper collaboration at this stage can eliminate unpleasant surprises where the primary and secondary packaging don’t fit together. Such flaws can lead to disappointing customer experiences, not to mention production problems on manufacturers’ machines. Every brand manager should have packaging compatibility in mind. Full-service suppliers can ensure compatibility and increase impact on the shelf, while also speeding the time to market.”

When it comes to corrugated, shelf-ready packaging, Richardson adds, there are five key “easy” factors to always consider: easy opening, easy identification, easy disposal, easy shopping and easy replenishing. Additionally, early-stage collaboration with the right supplier helps create more sustainable packaging.

Consumers have shown a strong preference for convenient, portable, non-breakable flexible pouches and packaging for many types of food and beverage products. The well-known challenge with many such flexible packages, however, is that they are multilayer and multi-material, and hence not readily recyclable.

In response, we have developed a fully recyclable plastic laminate for pre-made pouches and form-fill-seal (FFS) roll stock that is suitable for existing recycling programmes. Called BarrierPack Recyclable, this all-polyethylene, mono-material laminate was validated in recent industrial recycling trials conducted by Netherlands-based CeDo Ltd., a leading European household disposables manufacturer that has been developing advanced, closed-loop recycling capabilities for more than 20 years.

Sustainability may not necessarily mean recycling the packaging, though. It also can mean prolonging its lifecycle to deliver a more positive experience and customer value.

One example is a corrugated box we created for the baby diaper brand of a national retailer in Poland. After its initial use, the perforated “WOW Box” can be turned into a doll’s house, a fire truck, or other toys or games – without additional gluing. This second-use packaging concept has the end-user in mind from the very beginning, and has proven to be a retail hit.

Mothers shared their delight with this aspect of the product on social media and helped the private-label brand overtake the international leading diaper brand in Poland.

A final factor that brand owners should consider, depending on their product’s sales channel, is the need to design their products and packaging specifically for e-commerce. While still accounting for only a sliver of the sales generated by brick-and-mortar stores, e-commerce – and its related packing, shipping and fulfilment challenges – is rising and will only continue to grow.

This again underscores to brand owners the vital need for upfront communication and collaboration among all parties involved in product and package design. Efficient optimisation of packaging demands a more holistic approach than what is often taken.

Brand owners must start by clearly understanding their customers’ needs, and then keep a laser focus on those end users throughout the entire process – from product and package design at the front end, to store placement and disposal at the back end. Choose your partners carefully, because they can play a huge role in your success.