Never underestimate the power of packaging
6 min read
22 September 2016
At the Packaging Innovations show in London’s Olympia, I headed along to hear the seven essential elements packaging departments must embrace to create value, from AVA Packaging’s Alison Vincent.
If the packaging doesn’t look good, I for one am less inclined to purchase the product. In fact, this is so much the case that even if I’m looking for a box of cereal at the supermarket, I’ll put back a slightly battered one in favour of an otherwise identical smoother box.
It turns out I’m not alone in thinking this. According to Vincent, if the packaging isn’t snazzy enough, people won’t buy it: “It’s almost got a harder job than the product.”
Packaging can be a huge source of profit, and the returns can be enormous. For example, Coca-Cola’s “Share a Coke” campaign, where bottles were printed with names on the label, drove sales by seven per cent in Australia, and 2.5 per cent in the US.
It’s not just personalisation that can create spikes in sales though – dishwasher tablet brand Finish increased sales by 21 per cent by switching to a more convenient plastic bag package over a stiff cardboard box.
But if a small change can create a huge growth in sales, it is worth noting that the opposite can be true as well. Robinson’s Fruit Shoot drinks for children feature a usually well-designed open and close lid, but an error led to a potential choking hazard and the product had to be recalled. This apparently led to a seven per cent drop in UK revenue and a five per cent overall group revenue decline. Indeed, Vincent warned, there can be a “dramatic impact” if it goes wrong.
Yet despite this, packaging is often overlooked. When considering what aspects of a business are “costs” rather than “profit drivers”, packaging will most likely end up in the costs column.
In one case study cited by Vincent, a company that had spent two years and $3m on a product found itself in the sticky situation of having designed a lot of pretty packaging pictures, but at no point had anyone planned the processes of how to fill the packaging. It was almost an after-thought.
When packaging is seen as a cost, it has its budget cut. This can cause an “massive detrimental impact”, not only to the packaging department, but to the physical product they’re trying to deliver, warned Vincent. Naturally, this then has a knock-on effect to the profits of the business.
“People think they know packaging, but actually that’s slightly dangerous,” she said.
“We need a new approach. If we carry on doing the same things well get the same results.”
For Vincent, the new approach came in the form of her seven essential elements for value creation in packaging. They can be followed by businesses of all sizes, as the key is to ensure that your packaging plans are always in line with your overall business ambitions.
Vincent’s seven elements to consider when designing your packaging are:
- Have a strategy in line with the business strategy – are you saving money and making a cheaper packaging, a luxury brand etc.?
- Review of packaging activities – how is the packaging department currently spending its time? What’s core and what’s non-core? Clear the decks and freeing up time
- Capability and capacity – what skills, budget, and training do you need to be able to produce the packaging you want?
- People – review the skills you have and what more training your staff needs to do. Next, consider where those skills should be based within the organisation
- Ways of working – decide on the way the packaging process is going to work within the company and with external suppliers. Manage your relationships consistently
- Definition and documentation – start with the end in mind. Define the specification and the acceptance criteria up front before you start on any development work. It’s about owning the packaging – a lot of businesses let suppliers take care of packaging and often aren’t sure what’s being delivered until it goes wrong
- Support systems and tools – get analytics up and running to reduce risks – use apps to manage projects on the go and don’t let anything slip out of focus or become an afterthought
Vincent acknowledged that there is no such thing as a finished product – once you have created a value-added package for your product, you should forever be in the process of monitoring, feeding back results and tweaking towards perfection.
As with any business process, it takes a lot of hard work. But the return for your efforts can make it all worthwhile.