In This Issue

Strive to innovate, PLMA audience told Don't view the current economic slump merely as a window to build short-term sales, but rather strive to change consumer behavior and build shopper loyalty by understanding your customers and their needs over the longer term.

Package Gallery

Wins and losses at the shelf: What drives purchase intent?

By Scott Young, President, Perception Research Services

Recently, marketers have become more focused on "the first moment of truth" at the shelf—that moment when a consumer picks up a package—and far more aware of the power of packaging to drive sales. However, as consumer packaged goods (CPG) companies have acted more aggressively to leverage design in packaging, we've also seen several high-profile mistakes. Two notable examples are Tropicana and Gatorade, in which new packaging systems have led to double-digit sales declines.

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This has led some CPG companies to question whether "revolutionary" packaging changes can ever succeed, and to ask if there is a formula for leveraging the power of design, while also minimizing its risks. 

With these issues in mind, Perception Research Services recently reviewed our packaging research database of findings across thousands of studies to see what could be revealed in terms of the performance of new design systems vs. current packaging. We also wanted to analyze the primary factors driving "wins" and "loses" at the shelf, and shoppers' reactions to "revolutionary" packaging changes. The analysis revealed several interesting and perhaps surprising insights to guide packaging strategy.

When we studied the performance of new packaging systems, three interesting facts emerged. First, in terms of overall packaging effectiveness, we found an almost perfect bell curve: About 50% of new designs outperform a brand's current packaging, while another 50% represent a step backward in overall performance. 

This finding belies the often heard claim that "current packaging always wins" in packaging studies. In our experience, this happens only when current and proposed designs are compared side-by-side. When packaging is tested properly—on a monadic basis, simulating the introduction of a new design system—new designs can win. More important, this finding suggests that marketers need not expect initial sales declines when introducing new packaging.

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Second, "revolutionary" packaging changes, defined as those that alter two or more primary design elements (packaging structure, branding, color and/or main visuals), follow the same bell curve. However, there is a tilt toward the "top" and "bottom" ends of the spectrum.   

In other words, revolutionary changes can work, but they are higher-risk and higher-return propositions. Dramatic changes are more likely than incremental changes to drive significant improvements or declines in packaging performance.  

Of course, this finding is quite intuitive, so the real learning comes at the level of packaging elements. 

Finally, the research confirmed that true "wins" at the shelf—sales gains driven by a new packaging system—are difficult to achieve. Across studies, we've found that about 10% of new packaging systems that were tested drive this result, which is the single most predictive measure of in-market success. 

How can designers and marketers navigate this challenge? Here is one compelling strategy. Baked Lay's, Hill's Science Diet pet food, and Domino Sugar embody it in successful design changes.

In each of these cases, dramatic and visceral design changes in structure, color, and primary imagery were balanced with continuity in brand identity to provide reassurance and very clear product versioning to facilitate shop-ability.

Read Scott Young's entire article and his study's implications for packaging research.

Strive to innovate, PLMA audience told

By Jim George, Editor-in-Chief

Don't view the current economic slump merely as a window to build short-term sales, but rather strive to change consumer behavior and build shopper loyalty by understanding your customers and their needs over the longer term.

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That was the message from Scott Lucas, Executive Director at Interbrand, at the kickoff breakfast Nov. 16 at the Private Label Manufacturers Association's annual trade show in Rosemont, IL.

Lucas, whose company develops branding and packaging strategies for both national brands and private-label brands, encouraged an audience of 500 brand owners and other industry professionals to push packaging innovation and thereby further improve brand value. "Build on a foundation of shopper insights and brand meaning," Lucas advised, and surely, his words provide opportunities for national brands as well.

Success, he says, will require in part that brands understand why innovation matters to consumers. Then, they will need to implement both a branding strategy and a design strategy that work hand-in-hand, he added.

Lucas cited a fresh industry figure that 80% of brand interaction occurs through the packaging, and said private-label brands should look to leverage packaging further than they already have to build even stronger connections between the store and the brand.

Store brands that innovate can have a halo effect not only on their own products but also on the store and all the other private-label brands by lifting consumer perceptions of both the store as a brand and the value of private-label brands on the whole inside the store, Lucas explained. He added that national brands need to consider these potential synergies as they prepare their own marketing plans.

Kroger provides an excellent example of what Lucas is talking about. Its Fresh Selections packaged produce now enables shoppers to trace the food they're purchasing back to the source. By entering the HarvestMark trace code, found on the label or the bottom of the package, at HarvestMark.com, consumers can learn information such as where the food was grown or whether it's subject to a recall.