3M's Nexcare brand set its sights on distribution at Costco, and innovative new channel-specific packaging helped make it happen.

With powerful brands and a global presence, 3M’s $3 billion consumer and office business prides itself on leading through innovation.

A key component of the company’s portfolio, the Nexcare bandage brand enjoyed distribution at retail powerhouses like Wal-Mart and Walgreens, but found one channel that proved elusive. The brand lacked significant club channel distribution.

“In 2004, the person in charge of Nexcare came to us for help,” recalls Gary Grossman, president of IDI (Innovation and Development, Inc.). “Their products were doing well in retail stores and pharmacies, but 3M had not been able to open a presence in club stores.”

3M had worked with IDI on previous package design projects, and the company was familiar with the firm’s approach to design.

In situations like this, brand owners need to understand the battlefields where they compete—not all retail outlets offer the same challenges. Club stores, for instance, play by a different set of rules than mass retailers, one of which is: in narrower categories, they carry only one supplier per category. For the bandage category at Costco, it was Johnson & Johnson’s Band-Aid® brand.

In this case, brand competition was taking place not on the store shelves, but in the office where the decisions on which brands to carry are made. The challenge for 3M was not to outsell the Band-Aid brand, but to replace it. And the primary audience was not consumers, but Costco executives.

Another unique aspect of a retailer like Costco is that its primary source of income is not from product sales, says Grossman, but from membership fees. So it was important to ensure that Nexcare could help the retailer satisfy member needs and retain their loyalty and continued membership.

IDI set to work to uncover what might be missing from consumers’ experience with the bulk bandage packages they were currently being offered.

The firm assembled eight groups of Costco shoppers. And what it first heard from the groups didn’t surprise IDI a bit. Though adults are the primary purchaser of bandages, kids are the primary consumer. And while the 200+ count boxes offered value, the experience of fishing through a box of loose bandages to find the proper size while trying to console an injured child was less than effective. Plus, parents like to store bandages in the places they are likely to need them—in the car, in the baby stroller, in the kitchen, in the bathroom—and once again, the bulk box didn’t fit the bill.

Using that information, the IDI team began to brainstorm. “[We asked ourselves] how we could create a new package of comparable cost plus give the shopper what they were looking for: more organization, easier to store, and easier to understand,” says Grossman.

During the brainstorming process, participants worked with members of the IDI team to develop new ideas; then these concepts were sketched out and modified in real-time. A group session might yield anywhere from 120 to 150 ideas, and at the end of each two-hour session participants were asked to select which products they would likely purchase.

IDI compiled the results of each session and selected the strongest three concepts, which were then presented to 3M. Grossman calls the final selection, which fell within 3M’s budget and time constraints, “a blockbuster idea.” The 260-count package, which features redesigned graphics, consists of a vinyl pouch or envelope with pockets that organize and store different bandage sizes. The pouch is embossed with the 3M and Nexcare logos to keep the brand name in front of consumers if the paperboard carton is disposed of.

The Nexcare Premium Pack was not only a hit with 3M, but the new package also won over the buyers at Costco. 3M and IDI scrambled to meet the retailer’s tight schedule and, since the new product replaced Band-Aids on Costco’s shelves last March, Grossman says, it is outselling Band-Aids by “a substantial margin.”  

• Designing for club store environments. At IDI contact Gary Grossman at 201.941.5500 or visit www.idiusa.com.