POP and packaging impact: The view from Germany
Anyone who wants to reach the consumer must stage his merchandise perfectly at the point of purchase (POP), which applies to all packaged products.“Shops are a hotly contested arena, where the prize is the customer’s attention,” explains Hilka Bergmann, head of the packaging research section at the EHI Retail Institute .The pressure to be noticed at all costs is highest for discounters.
According to the Institute’s data, the average supermarket in Germany carried some 6,000 articles in the mid 1990s. Today, that figure has risen to more than 15,000. This vast array is confusing to consumers who know very little about individual products.
Most shoppers therefore tend to buy on instinct. Marketing researchers have found that 70% of them only decide directly at the point of sale what ends up in their shopping cart. And this is where the importance of the sales package is most crucial, because it acts as an influencer.
According to the Munich-based market research firm facit, the influence of packaging on purchasing decisions is twice as high as that of TV advertising, billboards or print media.
Industry continues to allocate budgets to POP advertising. According to the EHI Retail Institute, spending by product manufacturers in Germany, Austria and Switzerland is predicted to rise by 0.2% points to 10.2% of their marketing budgets in the 2009 to 2012 period. This is impressive, especially considering that web marketing is claiming an increasing amount of funds.
At interpack 2011, Processes and Packaging, to be held from May 12 - 18, 2011 in Düsseldorf, Germany, “communicative” packages will be an important topic. The world’s leading international trade fair for the packaging sector and related processing industries will feature Innovationparc Packaging, with topics showing how packaging relates to quality of life through such aspects as health, aesthetics, simplicity and identity. These dimensions directly impact the behavior and therefore the consumption patterns of potential customers – and using packaging as a vehicle to persuade these potential customers to buy a product calls for deep insights into target groups and their expectations.
In Innovationparc Packaging, best-practice examples of packages will be presented during interpack 2011 in realistic environments relating to each of the dimensions of quality of life dimensions. The special show will therefore become a sort of mall with a variety of shops.
Investing in packages that display contents interactively exceeds the budgets of all but a few companies so far. Although the more common sales packages and displays don’t provide such deep insights, in the ideal case they assume the role of an attractive salesperson standing at locations with especially high traffic in a discount or department store – ready to offer quick and competent “advice” about the product inside. Articles can be even more strongly promoted in when they come in special editions or with a bonus offer. Gaining importance are promotional activities where the consumer can learn more about the products, such as food and beverage tasting counters or live events like cooking shows.
A tough challenge for designers
The perfect POP packaging is not a brilliant “individualist” making everything else pale in comparison, but primarily a team player. It is just one component in branding, and as such it has to fit seamlessly into the overall concept. The design has to stay within strict limits, since the colors, logo and language are normally predefined. “In the mail order business, packages are the only piece of corporate design that consumers can actually hold in their hands,” comments packaging designer Uli Mayer-Johanssen of the Berlin-based MetaDesign agency.
Other factors that are just as important for successful presentation of a product at the point of sale are the stability and ease of handling of the packages. “In terms of logistics, displays can be a particular problem if they are not sturdy enough, too tall, or the base is too weak to carry a superstructure with a very high point of gravity,” adds Bergmann. Top-mounting structures like this could easily collapse under the weight of the merchandise and would have no chance of arriving at the POP intact.At the store itself, easy assembly and disposal are key. “Displays that are difficult to assemble and take up too much time simply don’t get set up,” says Bergmann.
Another important aspect for retailers is ease of restocking at the point of sale. Displays are normally set up for two to four weeks, and have to be continually replenished during this period. When they are taken down, the remaining merchandise has to be transferred to the shelves. Since retailers have no time for complex rearrangements, modular displays that can be set up on top of the transport packaging and are quick to install are gaining ground rapidly.
This puts manufacturers in somewhat of a dilemma: the packages themselves have to present a perfect appearance, but they must also be multifunctional in order to keep costs down and ultimately to protect the environment. Displays that are taken down after two weeks and recycled or even disposed of are not a good proposition in terms of economy or ecology.
Chocolate-maker Lindt presents its merchandise in high-quality, long-term displays made from plastic and metal designed to emphasize the high quality of its pralines and chocolates.
Innovations like these are encouraging the German association of corrugated board manufacturers (VDW) to praise the benefits of their material. “Corrugated board is highly versatile. Great shopping experiences can be created with suspended ceilings, displays and primary packaging,” says VDW president Rolf Dieter Kögler.
And indeed, corrugated is eminently suitable for displays. It can be recycled, and consumers have long accepted it as a sustainable material. But other materials such as plastic or metal are also used at POP displays, especially for premium merchandise for high-quality, long-term displays.
One example of this is the shop-in-shop solution that the STI Group has created for the Swiss chocolate manufacturer Lindt – a structure made of plastic and metal designed for long-term use and a high impact on consumers. And though ecology is a prime consideration, glamour and glitz play an important role in sales packages as well.
The Belgian chocolate maker Godiva, for example, offers its praline chocolates in a box finished with a novel, gold-shimmering UV coating made of tiny aluminum platelets – a more exclusive product presentation would be hard to imagine.
Critics claim that such packages are too sophisticated and expensive and ultimately drive up the product price. Yet by reducing the material input and constantly improving production methods, manufacturing processes are becoming more and more efficient. Henkel Corp., the German developer of the UV coating that Godiva uses, points out that increases in manufacturing efficiency has made the finishing of the packages economically worthwhile. According to its producer, the UV silver coating has high storage stability, is ready to use, and can be processed at the same speed as conventional UV coatings in standard printing machines.
