Special Report: Marketers’ Guide to Packaging: Selling to the trade through the package

Declan Whelehan is a partner at Design Partners, a Toronto-based package design and corporate communications firm.It is widely known the u.k.'s private label market is operating about a decade in advance of North America's.National brand manufacturers in this country who choose...

Declan Whelehan is a partner at Design Partners, a Toronto-based package design and corporate communications firm.

It is widely known the u.k.’s private label market is operating about a decade in advance of North America’s.

National brand manufacturers in this country who choose not to learn from the experience of their British counterparts do so at their peril.

Relationship

Leading packaged goods marketers are benefitting by making the recognition – in advance of circumstances forcing them to make it – of the importance of the manufacturer-retailer relationship.

Traditionally, manufacturers have worked with a solitary objective in mind: the customer.

The retailer, meanwhile, has gone largely unnoticed.

But, as a recent u.k.-based paper – ‘Marketing to the Retailer: A Study of the Grocery Trade’- reports:

Please retailer

‘The success and profitability of a marketing operation depends as much on pleasing the retailer as on pleasing the housewife. Too often, trade marketing has been an afterthought.

‘It is now increasingly realized that this is not good enough. The retailer is so important that he needs to be considered at all stages of marketing.’

The sole relationship a customer has with a retailer is not limited to the cash register, when the customer hands over money.

Ongoing dialogue

In fact, the customer and retailer carry on an ongoing, unseen, mutually advantageous dialogue through the retailer’s decisions on the structure of his inventory, and the customer’s response to it.

When a manufacturer understands the dynamics at work in this affiliation, (when he understands the shopper and retailer have an arrangement whereby they silently agree that it is not so much what it bought that counts, but, rather, what might be bought), then that understanding can play an active and profitable role in the drama.

‘When a shopper chooses to shop at one store rather than another, [the] reasons are partly rational and partly irrational,’ the study, by London-based Insight Research, says.

Influenced by image

‘[The shopper] is influenced by the image the store presents in the mind,’ it says.

‘She feels it says something about her as a shopper that she shops in a particular store; and, what it says must, of course, be favorable and flattering.’

This means it is up to the store to persuade the customer it is a classy, upmarket place to be.

But, the challenge is to do this without taking away her belief that she can continue to spend money in her preferred style: economically.

That is where packaging (in its literal and figurative manifestations) comes into play.

It might be surprising to note that the professional retailer does not make inventory decisions based purely on anticipated sales volume and margin of selected products.

Obviously, profit and turnover are a part of his choice, but he is also looking for items that will enhance the desired image he has devised for his store.

‘Retailing is an art, not a science,’ the British study reports, and, indeed, the brushstrokes of a successful grocer can be found all over the canvas of his establishment.

Part practical, part illusion

He creates an inventory, which is part practical, and part illusion.

His goal? To attract clients with the latter – and profits with the former.

Consequently, he fills his shelves with artfully designed, visually appealing packages that surround the shopper with an ambience of luxury.

Often, it will be the national brand products – and their advertising and marketing efforts – that a retailer uses to draw business to his store.

But, once they are in there, the appealing packaging of his own-brand products will compete strongly for customers’ dollars.

The study says retailers who are determined to skew the balance even more in favor of their own lines might choose to create an upper spectrum of desirable but unaffordable private-label goods.

Move upmarket

This would be done in hopes of moving the perceived image of ‘ordinary’ private-label products – the ones with the highest turnover – upmarket.

Ultimately, the study says, this is all an exercise in packaging.

‘From the point of view of the brand manufacturer, this situation clearly places a premium on his packaging,’ it says.

‘He has to package his brand so brilliantly and attractively that the retailer regards it as an essential element in his display.’

Thus, there is more to the packaging of a brand than attracting sales; there is also a desire to ensure distribution and display by offering an irresistible contribution to the retailer’s store concept.

Conveys quality

He wants something that conveys images of quality and variety, something that will impress shoppers even if they eventually select the lower-priced, own-brand item.

And, therein lies the challenge to which national manufacturers are rising.

The competition, as the brand-name manufacturers in the u.k. have discovered, is formidable.

Private-label packaging can afford to be much more flexible in its approach than brands that cling to equity and history.

Retailers value novelty because they know that shopping is a chore shoppers do not relish. Any stimulation is welcome.

Free to evolve

The designers of own-brand packaging are free to evolve and develop packaging in ways which will keep shoppers’ interest.

It is critical that brand manufacturers realize that they, too, enjoy some of the same latitudes, and that this can be accomplished without undermining brand recognition.

The study summarizes the findings in this way (and the British retailer references might just as easily be replaced with the names of local Canadian stars):

Study private marketers

‘The manufacturer who intends to maintain the viability of his brand marketing in a decade which is going to be increasingly dominated by [British supermarket chains] Tesco and Marks & Spencer should study, admire and imitate the extraordinary visual fertility which these retailers achieve in their own-brand packaging.

The modern grocery retailer does not worry too much about maintaining the recognition value of his own-brand packs; he constantly improves them, and the brand manufacturer needs to do the same.’

Trial and error is the retailer’s method of product testing.

More entrepreneurial

Smart national brand manufacturers and marketers are adopting a more entrepreneurial approach, which relies on a thorough knowledge of the market, a depth of experience and a strong belief in their product to take advantage of opportunities as they present themselves.

Creativity has returned to marketing. Number crunchers – move aside.