Anyone who creates packaging should take note of two significant trends occurring in the battleground that is the store shelf. First, the steady growth of retailer-brand products in food and beverage has begun to create a “ halo ” effect over non-grocery categories. Second, mega- retailers and specialty chains are stealing market share from traditional supermarkets, strengthened with shelves displaying an abundance of brands exclusive to their stores.
These two developments point to growing competition for shelf space and the need for the package to work harder as a marketing tool.
Private-label products have been gaining popularity steadily in recent years, but their allure is now gaining a foothold in categories like health and beauty, home office supplies, household goods, and home improvement, says Iposos MORI, a market research firm that recently concluded independent consumer research for the Private Label Manufacturers Association (PLMA). The study, conducted for the first time in five years, reports that 20% of consumers frequently purchase retailer-brand products in these categories, and sales are growing across all retail channels. Iposos MORI surveyed 1,017 U.S. consumers during 2006.
This trend is impacting packaging significantly, says Brian Sharoff, PLMA President. “ The packaging has to pay as much attention to what the retailers are doing with their private-label programs as with what product manufacturers are doing with their branded programs. Packaging for national brands creates a product image that stands out amid the clutter. But packages for the retailer ’ s brand are represented in anywhere from 20 to 25% of the SKUs, so the clutter for the retailer’s brand is already uncluttered. So packagers need to look at the store as the brand and not on a category by-category basis. Look at private label as a total impact on the whole store.”
According to the study, 57% of consumers declared that packaging for private-label grocery brands is as good as the packaging for national brands. That perception is beginning to take hold in categories in household goods, too, through packaging that is reflecting greater retailer knowledge about how consumers shop.
One example is playing out at CVS/pharmacy, which has been reworking the packaging for many of its private-label lines. Globe Electric Co. provides the materials and creates the designs for CVS’ Round the House (RTH) brand of household products, from light bulbs to power cords. Globe helped CVS to restage the brand through packaging that emphasizes the value of each product relative to its national-brand competitors.
Each package accomplishes this objective in two ways. First, it displays an uncluttered front panel, moving technical product information to the side or back panels. Second, RTH packaging is designed around a visual hierarchy focusing on the critical information consumers want to know: “For light bulbs, it’s ‘I need this bulb shape, in this wattage ’ , ” says Lisa Zentner, Globe Electronic ’ s Director of Marketing.
Product communication on front panels of the light-bulb packaging consists of a large product photo, a one- or two-word description of the bulb, and color-coded circular icons in the upper right corner indicating the bulb wattage. For example, green circles signify the 60-watt bulbs. A red circle expresses the cord length on sleeves holding electric power cords.
With these changes, RTH improves its chances of gaining shopper attention in categories where packaging for competing brands can appear cluttered, technical, and sometimes confusing to consumers, Zentner explains. The packaging approach for RTH products dovetails with the Ipsos MORI study results. Consumers said that packaging plays an integral part in conveying an impression of product quality.
On the retailing side, the PLMA study found that 80% of consumers acknowledged they shop regularly at supermarkets. But 45% said they also visit supercenters and warehouse clubs. When it comes to trips to one particular retail chain, one out of six consumers identified Wal-Mart as their main destination for grocery shopping—equal to the combined total of the next three chains.
