As structural packaging innovators, many of us tend to look at our work as “improving the consumer experience” or “creating something cool”. It is all too easy to lose sight of the fact that structural packaging innovation can, fundamentally, be a very powerful business tool-one that has the potential to impact product profitability more directly than any other brand building tool, including advertising or graphic branding.
For this reason, I prefer to use the term “structural branding” to describe this discipline. It helps maintain a focus on the potential to impact the profitability of the brand through better communication, and not just improve the utility or aesthetics of a product.
So if we consider structural branding a business tool, it then follows that we should evaluate its usefulness in a more businesslike way-namely ROI. Whether you are part of a consulting group or the internal development team, ROI is equally important because it helps establish the value of the discipline to the business.
Of course, structural branding can require tremendous capital investments in tooling and machinery, extensive R&D time, and expenditures on increasingly costly raw materials and transportation. But this provides a great incentive to keep our focus on positively impacting profitability as a means to achieving an effective ROI.
So how can we use structural branding to help make a product more profitable? I have outlined three strategies that we have successfully employed by working closely with our brand partners. Each has its place and should be matched carefully with the growth strategies for the brand.
Tell a better brand story Package form can be one of the most powerful and trusted forms of brand communication. While they are not generally aware of it, consumers’ initial impressions of a product can be dramatically influenced by the look and feel of the package. If structure helps a brand better differentiate itself from competitors in a way that is meaningful to consumers, they very well could buy the product more often.
Maintaining current package costs is the key to this strategy. If costs are increased- even by a fraction of a cent-someone will have to answer the inevitable question, “How many more products will you sell if we accept that additional cost?”. In more than 20 years of structural branding collaboration, I have yet to meet someone willing to provide his or her boss with this number!
While we have plenty of anecdotal evidence of new packages boosting sales enough to make up for additional packaging costs, we have found it more effective to strive for cost parity.
This way, the increased sales can add incremental profits, instead of paying for additional costs. There is already enough ground to be covered in the amortization of new tooling and possible equipment changes. After all, we are looking to maximize ROI here!
When lawn care brand Preen wanted to differentiate itself from competitive products, package structure offered an excellent opportunity. Strong character lines combined with greatly improved handling and dispensing ergonomics told consumers: “This product will keep weeds away, but will still be very convenient to use”. And they have responded well to this new communication, as shown by a doubling of purchase intent at retail.
SkinMedica turned to a complete graphic and structural redesign when it sought to tell the story of the medical and scientific heritage behind its line of cosmeceutical skin care products. In addition to sales growth of core products, additional sales were gained because of consumers’ tendency to purchase the entire line of products since they now appeared as a complete, integrated system.
Cost reduction is your friend!
As a young designer, I used to cringe when I read a project brief that sought to “attain measurable cost reduction”. I associated this with somehow compromising the design. But now I look at this request as a great opportunity to ensure immediate success!
Looking back at the programs we have been involved with over the years, it has become clear which projects move most quickly into the market and achieve success. These observations have evolved into my “something for everybody” theory of program planning. If representatives of the key disciplines in an organization see a clear advantage to the new package as it relates to their corporate responsibilities, the product will get “pulled” into the market as opposed to being “pushed” by a single stakeholder.
If the marketing team sees an improvement that will lead to greater sales, the sales team sees it creating “news” in their category, the R&D team sees reduced component costs and the operations team sees improved line efficiencies using existing assets, we can’t help but be successful.
This is not as difficult as it may seem. The key is a collaborative effort among each of these disciplines, where the needs and incentives of each stakeholder are understood independently. Sprinkle a little creative thinking into the mix, and we have everything we need to create “something for everybody” and a sure path to greater profitability.
The hardest part of achieving these goals is reducing packaging costs and improving line efficiencies while producing something that consumers perceive as an improvement. It has been my experience that, if one starts with a solid understanding of their consumers and what is really important to them, there is almost always a way to deliver something that better meets their needs at a lower cost. The additional benefit of this strategy is that there is usually a tremendous sustainability improvement as well. Using less packaging material is one of the most dependable ways to minimize a product’s environmental footprint.
When Unilever’s Suave team sought to reduce cost and improve brand perception, a cross-discipline collaborative team was the key to success. In addition to lowering package costs and producing higher line efficiencies, the product has also seen a boost in retail sales.
Lipton’s new ready-to-drink tea bottle has been designed with 20 percent less plastic, while, at the same time, it better communicates the natural, quality product inside through softer, more organic shapes and textures. The structural brand is working closely with the graphic branding here to achieve this.
Sell it for more money!
Why didn’t we think of that before? Of course, this is not as simple as it sounds. In today’s retail environment, it’s difficult to increase the prices of products, even as the costs to produce them increase.
So how do we do it? We reinvent the product in the consumer’s eyes. If we really understand our consumer, what they need and what excites them, we can deliver a newly packaged product that they want-at almost any price.
Take orange juice packaging. As it evolves out of the paper carton into clear easy-to-pour carafe shapes for brands like Tropicana Pure and Simply Orange, the consumer tends to look less at the “price per ounce” and more at how much better the quality of the orange juice seems!
When Wrigley launched its new “5” branded stick gum package, consumers (and retailers) let the brand escape from its “99 cent plen-t-pak” into a new form that was more meaningful, easier to use and, yes, more expensive. A great collaboration of solid product development, marketing and branding resulted in a redefinition of “stick gum” into a much more consumer-relevant product.
In the two cases described above, the actual package costs increased slightly, but the improvement in value to the consumer far surpassed this, allowing for greater profits for the brands. However, this strategy is impossible without a profound understanding of your consumer. Raising the price on a product without first creating a strong perceived benefit is a surefire way to lower profitability in a hurry.
So, as you begin to put these strategies into practice, be sure to analyze your own organization’s ROI on structurally branded product launches. This information will have to be collected internally, as it is not likely to be shared across organizations and certainly not found in print!