The economic downturn, rising cost of goods and an uncertain future have created dramatic changes in consumer attitudes. They are more cautious with their spending. And they have become more skeptical, looking out for false promises and unrealistic claims.
Consumer packaged goods companies need to be smarter and more strategic during these difficult times, whether they are part of a consumer’s daily routine or an every-once-in-a-while experience. There is an urgent need for honesty and thoughtfulness-and packaging should reflect this as well.
For instance, if a company needs to head off rising production costs by downsizing, it should resize ethically, not deceptively! Brands need to provide an “apples-to-oranges” comparison, not just “smaller apples.”
Tropicana Pure Premium reduced the amount of product in its packaging, but within a very different looking container and with a value-added closure. Domino sugar offered a more convenient, rigid plastic container with less sugar at the same price as the conventional, though deficient, paper sack. And Similac offered less product within a redesigned container, but at the same price per ounce.
These package adjustments make it clear that the downsizing has taken place, letting the consumer decide if she is willing to pay for the redesigned container. Anything less can impact consumer trust-something that takes a long time to build up and only a short time to lose. Not to mention that, with the increase in social media use, consumers are immediately broadcasting their likes and dislikes. If they are dissatisfied or feel they’re being tricked, they’ll post their concerns on a blog or on YouTube for all the world to see.
Consumers are also scrutinizing prices and sizes and, increasingly, turning to store brands over the more expensive national brands. They are shopping more carefully, looking to determine whether there is intrinsic value in a product prior to purchase.
As such, brands need to present a perceivable and significant added value over the store brand to justify the additional cost. Packaging investments must be focused on meaningful features. Instead of downsizing to maintain margins, brands must think in terms of “right sizing” (costs can be saved by focusing on primary SKUs; consumers want less choice as part of a new need for simplicity).
To do so, brands must understand how consumers actually use products, which requires an investment in research to discover product consumption patterns. Heinz did this with its Fridge-Fit ketchup packaging and found that it could convince its high-consumption households to trade up to larger-size packaging. Proper proportioning and ergonomic detailing on the Fridge-Fit package encouraged consumers to trade up to a larger size. In essence, the packaging was “right sized” for a larger consumption household.
The brand is now selling more product and less packaging, which is good for sales, the cost of goods and the environment.
Of course, consumer attitudes and needs are always evolving. But the current economic downturn has stepped up the pace markedly. In addition to current consumer desire for health, wellness and sustainability, brands now need to address what some are calling the “uncertainty principle.”
According to Iconoculture, a Minneapolis-based consumer insights company, consumers are confused about their spending and their worth, and they aren’t certain who’s responsible for their negative circumstances or what to do about it. The “uncertainty principle” says that people feel anxious and a lack of control, and they’re now seeking understanding, surety, comfort and simplicity.
Though, just because consumers are uncertain doesn’t mean manufacturers should be. There is a tendency for companies to withdraw when times get tough; for some, this downturn has shifted the focus from the long-term to an immediate need to head off costs by downsizing and halting innovation.
Such tactics are hardly strategic, though; and they’re being deployed to the detriment of the long-term health of brands. Instead, the focus should be on packaging strategies that uphold consumer loyalties, calm their anxieties and provide them with meaningful value.
Of course, packaging systems require long-term investment and forward thinking. But, by staying on course, focusing on the long term and avoiding short-term distractions, consumer packaged goods companies will be able to not only weather the recession but focus on retaining (and even building!) consumer confidence and trust in their brands. BP