March 7, 2019
CPG Innovation: Why Your Packaging Probably Needs A Tune-Up
This article is the first in a 3-part series on how CPG brands can work with their suppliers and retail partners to continually innovate to renew their relationships with their customers. In this first installment, I’m going to talk about the importance of packaging, and why it’s critical to keep innovating on packaging solutions so that customers keep choosing you.
Once upon a time, Consumer Packaged Goods (CPG) companies had much more control over the customer experience. They still had to compete with rival brands, but their customer’s buying experience was fairly predictable. Print advertising, in-store displays, and just a few major brands to choose from in any one category.
But now, all that has changed.
Consumers have more choice than ever, from the options at their disposal to the way they buy them.
With the advent of the internet and social media, there are many more channels for people to gather information on products and weigh their options. And with the explosion of e-commerce, they don’t even have to set foot in a store to get what they’re after.
Consumer Behaviour Is Changing
As research from global consultancy PwC shows, changes in the CPG industry are forcing companies to re-evaluate the way they’ve done business in the past and the assumptions they’ve made about their target market.
Demographic shifts, falling birth rates, and economic instability have all had a significant impact on the number of available consumers and how they spend their money.
Another significant change is the way people are shopping for and buying those products. The rise of e-commerce — along with the growth of the internet itself — has transformed how people research their options and even the way they purchase products.
The other game-changing development in retail? Direct-to-Consumer (DTC) brands. Online healthcare product providers like care/of and Pill Pack are interacting directly with their customers and constantly evolving their offerings to serve them better.
The increasing focus on customer experience poses unique challenges for CPG brands who typically rely on retailers to manage the point-of-sale experience with their customers. They don’t have the same access to their customers as their digital competitors.
But the news isn’t all bad. Brick-and-mortar retail stores are far from dead: despite the growth in digital commerce, research from Big Commerce shows that consumers spend 64% of their shopping budget in-store, and just 36% online.
So how can CPG brands differentiate themselves at the point-of-purchase, when consumers are weighing their options between similar products?
It may seem obvious, but it’s often overlooked: product packaging.
Compelling Packaging Can Make or Break a Sale
As the first point of tangible contact between a customer and your product, packaging can have a huge impact on consumer purchasing decisions.
According to a 2018 Brand Owner Packaging Survey, 80% of CPG brand managers agreed that packaging plays an important role in a product’s success, and said that they would be investing in new packaging initiatives in the next five years.
As a CPG manufacturer, you may not have control over the end-to-end buyer experience, but you do have control of the product packaging. By staying on top of market trends and consumer demands, and innovating to meet them, you can use your packaging to enhance the customer experience and build brand loyalty.
Let’s take a look at some of the advantages to re-evaluating — and updating — your product packaging on a regular basis.
1. You Can Offer Consumers Better Options
Compelling product packaging goes beyond pretty colours and pleasing aesthetics. Truly innovative packaging takes into account how consumers actually use the product.
The food industry has been on top of this for a while. From single-serving coffee packets to Heinz’s Dip & Squeeze ketchup dispenser, the pre-packaged food sector has been innovating their packaging to make it more and more convenient to consume their products.
Pharma and Healthcare companies might take a lesson from this in their own packaging. Consumers want packaging that is easy-to-open, easy-to-use, and easy-to-dispose of. At the same time, they want packaging that is safe.
One great example of this kind of innovation is Keystone’s Ecoslide-RX blister package — including a child-resistant locking mechanism that an adult can easily open with the press of a thumb.
You can work with us to design customer-centric solutions, and stay ahead of your competitors by differentiation and innovative packaging designs.
2. You Can Take Advantage of Current Trends
In recent years, consumers have become more health-conscious and more ecologically-minded than ever before — and you can bet that those values drive their purchasing decisions. You only need to look at the demand for gluten-free and organic ingredients in the food retail industry to see how consumer values have a very real impact on packaging, and labelling in particular.
Sustainability in packaging processes is an excellent area for differentiation. Church & Dwight Co., the makers of vitafusion™ health supplements, recently announced that the company has converted to recycle-friendly shrink film labeled packaging on their supplement bottles.
Their packaging also includes the Green-e logo, indicating that the product is manufactured with 100% certified renewable energy. They’re actually marketing their packaging practices as a way of setting themselves apart, and letting their customers know that they share their values.
By staying on top of what’s current in the minds of consumers, you can incorporate elements of those trends into your product packaging. Your packaging can reflect your customers’ values and make them feel good about choosing your product over a competitor’s.
3. You Can Stay on the Right Side of Regulations
It’s no secret that the requirements for healthcare packaging are far more rigorous than for other products. And with good reason: Health and safety concerns are of primary importance in the pharma/ healthcare industry, and if you’re not compliant, you don’t get on retail shelves.
So when regulations change or are updated, chances are, your packaging will need an update too.
Take Health Canada’s recently updated Plain Language Labelling requirements. The regulations have been in place for prescription drugs since 2015, but have now been extended to non-prescription health products as well. There’s still runway for full compliance, but implementing the changes sooner is better than later. It’s important to work with a packaging design company who’s on top of the industry and who knows the geographical market you’re selling into.
Change Is Natural — and Often Necessary
As markets evolve, businesses must evolve with them to stay competitive and relevant. With customer experience taking centre stage, and the new digital landscape disrupting traditional buyer journeys, CPG manufacturers are facing unique challenges in the way they market and sell their products.
But that doesn’t mean they have to be left behind.
Product packaging is an ideal vehicle for continuous innovation. Consumer insights often lead to new and compelling packaging solutions, and leveraging category trends can keep you top-of-mind with your customers.
When you work with a packaging engineers and designers who knows the industry, understands the regulatory environment, are immersed in the latest packaging innovations (and has the capabilities to support them), you can develop new packaging and display solutions to keep consumers choosing you.
The key is to never stop re-inventing!
When you’re ready to discuss your next move in innovating your CPG packaging, I’d love to chat — get in touch with Ravenshoe Group today.