Packaging: The Customization Debate

Brands looking to hone their shopper marketing strategies have brought packaging into the discussion. Retailers are becoming more interested, as well, which suggests that customization of packaging is the ideal. But then, there's the reality.Anne Jones, vice president of shopper marketing and business development at Kimberly-Clark, says brands have to strike a balance between the willingness to customize their packaging and the need to keep production cost-efficient. "Historically, there was a desire not to change graphics or count frequently," she says. "But as our manufacturing processes have gotten higher tech and more flexible, that extends into our products, and the design we put on our products is becoming much more variable as well. That's coming at a time when more and more retailers are demanding [customization]."Jon Kramer, vice president of RockTenn, Norcross, Ga., isn't sold on the practicality of broadly integrating packaging into shopper marketing. "Packaging is a critical part of your brand equity in the store, but it really is not intended to be a component of the shopper marketing mix," he says. "Shopper marketing is about customizing solutions for specific distribution channels and specific retailers. From a packaging standpoint, it doesn't make sense."Kramer agrees that digital printing has made it easier to regionalize or localize messaging and graphics, but he argues "it's more efficient to take that [same] package and put it in a display that's been customized." To do that with packaging … "the complexity is mind-numbing. Shopper marketing is complex enough without adding [packaging] to the mix."As Jones says, "Every customer can't have its own package."Will It Happen, and When?Rob Wallace, managing partner, strategy, at New York-based Wallace Church, believes that brands will be customizing their packaging by channel and by retailer on a regular basis within five years, but right now, it's only in the nascent stages. "It's something people are looking forward to. Walmart and Target do not want the consumer to perceive they're getting the same brands. In the future, because of print technology and distribution technology advances, it will be possible to create a separate brand identity [by store]." He says that's happening in limited doses now, but "it doesn't seem to be affordable quite yet. That will change."Currently, customization by channel presents less of a challenge, says Scott Young, president, Perception Research Services, Fort Lee, N.J. Club stores need a bold package that can sell itself, for example, while convenience stores need smaller packaging to fit their footprint, and dollar stores need potentially even smaller packages to fit their price point. "Channel specific is more paramount than retailer specific," Young says. "Retailer specific is driven by the desire to please a customer, whereas channel specific is driven more by understanding that it's different environments and different shoppers."Jeremy Anderson, managing director at Bluedog Design, Chicago, says customization is happening "on the margins" now and will become "a complete no-brainer in the future. … Both brands and retailers will know a lot more about the shoppers that they're speaking to in specific retail environments. As that knowledge becomes more mainstream, people will be acting on it."The IdealAnderson believes modern brands must integrate shopper-marketing strategy into package design. "Packaging is the only guaranteed marketing medium in the store," he says. Brands are tapping Bluedog "much further upstream in communications and thinking about design as part of a strategy conversation," he says. "That strategy conversation then becomes executed through the packaging but also through the integrated communications and campaigns our clients are running."Brands need to communicate their products' attributes in a very different in-store environment from a decade or even a few years ago, says Wallace. "How can brand identity elevate brand perception and drive shopper behavior?" he asks. "Point-of-sale communication dramatically helps, but retailers have no people anymore to maintain those [displays]. Clean-store policies have taken off. Marketers are challenged to make that perception at point-of-sale. Packaging has become the silent salesperson.""Consumer insights, consumer behavior, the shopper experience – that's absolutely the underpinnings of success for any brand in any retailer environment," Wallace says. "Every package out there has to have an understanding, and a very concrete one, of the consumer experience at the point-of-sale."Young believes shopper marketers getting a seat at the table would lead to more customization of packaging by retailer, although he foresees an ongoing balancing act between the gains to be had and "the logistical realities and the investment associated with it." He adds, "It's a pretty big hurdle. Folks will do it because they feel they have to, but logistically it's challenging."Perception Research Services has performed an increased number of "retail reality checks" for its clients. Those look at "systematic issues like lighting, shelving, and stability issues," Young says. "They're doing more thinking about how packaging fits into the shopping experience, and also the world in which the package lives."Young sees shopper research guiding packaging more often and more effectively. "Where does the package come into the equation, and thus what does it need to do?" he asks. "Where might that differ in a Walmart environment, where they might have little displays, as opposed to a computer superstore, where they have a lot of things out there? People are realizing you can't do packaging well unless you understand shopping, both in terms of the shopper's mindset and also in the context of shelving and merchandising and so forth."Not Everyday CustomizationKimberly-Clark is among the companies at the forefront of rethinking packaging and its impact. The company made a retail splash in 2010 with its all-black package for U by Kotex. Jones says the attention-grabbing strategy employed in that launch, aimed at 18- to 24-year-olds, is not likely to become the norm. "You'll see us taking more risks with [packaging] on new products, doing more edgy things," Jones says. "With existing products, it's more evolutionary change. You have so much brand equity tied up in your graphics that you run a huge risk … if you don't bring your consumer along with you." Says Jones: "Packaging is definitely emerging as a larger element of marketing in general, and a more important element."The U by Kotex launch was not a customized campaign, notes RockTenn's Kramer, although he certainly agrees shopper marketing played a significant role. "That was a shopper-marketing-driven evolution. That was brilliant." But, "that's the exception that makes the rule. Here was a brand that decided they were going to change what they stood for. They drove that from the shelf back, and they did it brilliantly. But there are a number of other brands and categories that wouldn't do that … unless your equity is about newness or excitement. It worked in that case because Kimberly-Clark was making a fundamental change in the equity proposition for that brand."Jones says that the U by Kotex campaign contained some customized special packs, but the base packaging was one-size-fits-all. "Most of our large customers would have had a unique display unit."Kramer does see a role for packaging customization in short-term campaigns such as one supporting a specific NASCAR event, but beyond that he believes it's more efficient to customize header cards on displays, for example, that can be switched out as needed. "It's an in-and-out activity," he says of the time-specific campaigns. "It's not that we're redesigning packaging to address the shopper behavior in your store. That's micromarketing to the point where it's highly inefficient."Flexible manufacturing processes have made it easier for Kimberly-Clark to cross-promote on packaging. It recently partnered with Walt Disney/Pixar to promote the theatrical release of "Cars 2" this summer, and has also done so with NASCAR and the Daytona 500. "It brings that sense of excitement to the shelf and makes it look different from other packaging," Jones says. "In the past, we were more hesitant to mess with the packaging because of the lead time. We're finding it's such valuable space in terms of communicating with the consumer."Kimberly-Clark has shifted its human resources to be able to better handle customer-specific packaging, she says. "We plan for how many customer-specific packings we're going to have on an annual basis," Jones says. "We've put new, incremental resources in place, over the last two years, to deal with that."Bluedog Design sees brand-retailer collaboration around seasonal campaigns and cause-related marketing. "I would expect [retailer-specific] packaging is a big trend that's only going to continue," Anderson says. "It's a combination of the retailer asking for it and brands sensing opportunities. … They're combining shopper thinking and retail thinking into their strategy before they create the actual design."Perception Research Services' Young says that retailers actively ask for customized designs, but that's not always how things play out. "It's sometimes driven by the fact that people getting involved in packaging designs are, more than they used to be, people with a shopper background, with those thoughts in mind," he says. "How will Walmart react? How will Target react? That's happening more. There's more pressure than ever to make sure that something new can be sold in, speaking with those [retail] guys in advance, understanding what their priorities and concerns could be."The 'Retro' ExampleOne way some brands are attempting to stand out on the shelf is through "retro" packaging that targets particularly Baby Boomers but also Gen Xers by employing packaging looks from the 1950s through '80s. Target and Procter & Gamble formed a partnership around limited-edition packaging for Tide, Bounce and Downy this spring, and Target and General Mills did likewise in February and March with limited-edition cereal boxes that featured cartoon characters of decades past. "It's interesting. It's fun. People are coming up with creative ways to make news," Anderson says. "People are looking for ways to create a tiebreaker at the shelf."But, he doesn't see retro packaging as a major difference-maker. "Retro packaging is a quick hit. There are bigger opportunities to think about how you create that differentiation at shelf."Young has a similar opinion: "It's trying to strike a chord and perhaps create a little news, or a second look. I don't see people changing their base [packaging] appearance to that, but I do think it's a way to get a little more noise out there."Size MattersBrands have been changing packaging sizes for a variety of reasons, not always simply to sell less of a product at the same cost as shoppers cynically assume, Anderson says. "We see it a lot. It has less to do with cost and more to do with trying to create a value proposition for their specific retail customers."Brands sometimes change package sizes to cut costs in the supply chain. Jeff Sharfstein, chief executive officer of The Strive Group, Chicago, points to highly concentrated laundry detergent with packaging a fraction of the original size as one example of that trend. "Whenever you can condense or shrink something, it has a direct impact on transportation costs," he says. "I've seen a lot of products shrinking themselves wherever they can."New and different package sizes are sometimes designed for shopper convenience. Kimberly-Clark has been playing with different sizes and shapes for its Kleenex packages to make them easier to fit into one's car, most recently with new wedge packs "designed to fit into that slot in your seat where things always fall," Jones says. "We're looking at the carton as more than just a vessel for the product but as a design element in and of itself."Saving costs or presenting more environmentally friendly messages are only part of the reduced package size issue, Young says. "I also think one of the big opportunities in packaging is speaking to different usage occasions and making sure the product is working for people where they live," he says. "For example, packaging that may work well on-the-go. And then realizing that in some cases convenience stores or other [classes of trade] have less real estate, so the packaging needs to adjust to that reality."Young counsels those thinking about changing package size to sell less product for the same price to tread carefully. "They're quite sensitive to being ripped off," he says of shoppers, "the feeling that they're paying more for less product."Anderson says that any messaging included on packaging needs to be very brief and impactful, given the modest "real estate" involved on a typical package.

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