home PACKAGING Packagings As Sales Clinchers – Showing The Flag At The Point Of Sale

Packagings As Sales Clinchers – Showing The Flag At The Point Of Sale

Most consumers only decide which items end up in their shopping basket when they are actually in the shop itself. The ideal packaging therefore jumps off the shelf, speaking to the consumer, providing instant persuasive information about the quality of the product. But no matter how appealing the design of a packaging is, functionality is always a prime consideration.

Lego, the Danish toy manufacturer, is deploying a whole bag of tricks to tempt customers. At its stores, products are now being staged in three-dimensional, interactive views – to the delight of fans of all ages. The new presentation technology, which goes by the name of augmented reality, enhances the viewer’s perception by using advanced imaging techniques to combine real-world pictures with three dimensional computer-generated images.

Entry to the augmented Lego world is provided by a digital box, a terminal equipped with special software. The user takes a Lego product from the shelf and holds the package bar code up to a camera. The camera reads off the code and projects a 3D version of the product on a monitor. When the package is turned, the image of the product also rotates, allowing the product to be viewed from all sides. The animation is superimposed on real-world images, which the camera transmits simultaneously. Unlike virtual reality, augmented reality does not replace the real world but enhances it with virtual data.

Augmented reality: This is the technology that Lego is using to stage its products. It uses advanced image processing techniques to combine real-world pictures with three-dimensional virtual images. (Photo: Lego)

For Lego, this investment at the point of sale (PoS) has already paid off. “The feedback tells us that this innovative concept is going down really well with customers, who are having a lot of fun using it,” says Helena Seppelfricke, press officer at Lego Central Europe. The Danes now intend to roll out this new technology to all 50 of their brand stores around the world.

No excitement, no sale
Anyone who wants to reach the consumer must stage his merchandise perfectly at the PoS. This doesn’t just apply to toys but to all products – from food to luxury items. “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 German retail consultancy EHI Retail Institute. The pressure to be noticed at all costs is highest at the 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 now know very little about individual products. Most shoppers therefore tend to buy on instinct.  Marketing researchers have found that 70 per cent of them only decide directly at the PoS what ends up in their shopping basket. And this is where the importance of the sales package leaps out, because it acts as a decision aid at the shelf. According to the Munich-based market research firm facit, the influence of the packaging on purchasing decisions is twice as high as that of TV advertising, billboards or print media.

Industry therefore continues to allocate big money to PoS advertising. According to EHI Retail Institute, spending by product manufacturers in Germany, Austria and Switzerland is predicted to rise by 0.2 percentage points to 10.2 percent of their marketing budgets in the 2009 to 2012 period. This is impressive, especially when one considers that web marketing is swallowing an increasing amount of funds. At the interpack from 12 to 18 May 2011, the world’s most important trade fair for the packaging sector and related processing industries, “communicative” packages will be an important topic. What’s more, the  INNOVATIONPARC PACKAGING  will be turning the spotlight on themes showing how packaging relates to Quality of Life: meaning, health, aesthetics, simplicity and identity. These dimensions impact directly on the behaviour and hence 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 the  INNOVATIONPARC PACKAGING,  best-practice examples of packages will be presented during the interpack in realistic environments relating to each of the five dimensions of Quality of Life. The special show will therefore become a sort of mall with a variety of shops.

Investing in packages that show their contents interactively and in 3D has, however, exceeded 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 the good-looking salesperson who stands at locations with especially high traffic in a discount or department store – such as gondola ends – ready to offer quick and competent advice about the product inside. Articles can be even more strongly promoted in retail outlets when they come in special editions or with an extra. One internationally known example of such on-pack solutions is razors that are offered complete with blades. Also gaining importance are promotional activities where the consumer can learn more about the products, namely food and beverage tasting counters or live events such as cooking shows.

A stiff challenge for designers
That being said, the perfect packaging at the PoS is not a scintillating soloist putting everything else in the shade, 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 colours, logo and language are normally pre-defined. “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 not sturdy enough, too tall, or the base is too weak to carry a superstructure with a very high point of gravity,” explains Bergmann. Top-mounting structures like this could easily collapse under the weight of the merchandise and would have no chance of arriving at the PoS intact.

At the retail outlet 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 to spare for fiddly 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 just two weeks and put out for waste paper collection or even binned are definitely not a good proposition in terms of economy or ecology.

Clean-lined and simple: Vileda banks on compact cardboard displays at the point of sale. They save material and are easy to handle. (Photo: STI Group)

The German display and packaging manufacturer STI Group has found a solution for efficient PoS presentation. For the Vileda company it developed a corrugated board display stand for pails, scrubbing brushes and floor cloths with a modular design that reduces the number of parts by two-thirds. The various display types and merchandise selections can be put together using just a few standard elements, which also makes it easy to quickly position new products at secondary locations, reports STI Group spokeswoman Claudia Rivinius.

Good looks are not enough
Innovations like these are encouraging the German association of corrugated board manufacturers (VDW) to extol the benefits of their material. “Corrugated board is highly versatile. Great shopping experiences can be created with suspended ceilings, displays and primary packagings,” says VDW president Rolf Dieter Kögler. And indeed, cardboard is eminently suitable for displays. It can be recycled, and consumers have long since accepted it as a sustainable material. But other materials such as plastic or metal are also used at the PoS. “For upmarket merchandise, companies often opt for high-quality long-term displays,” says Rivinius. One instance 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 of course 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 aluminium platelets – a more exclusive product presentation would be hard to imagine.

Luxury presentation: 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. (Photo: STI Group)

Critics claim that such packages are too sophisticated and expensive and ultimately drive up the product price. The food processing and packaging machinery association within the German Engineering Federation (VDMA) counters this with the argument that, by reducing the material input and constantly improving production methods, manufacturing processes are becoming more and more efficient. Cost savings, it says, can be achieved simply by implementing the latest state of the art. In packaging production lines, for example, it is possible to use distributed servo technology, which is more dynamic and efficient that large central drives. Although the upfront investment for these machines is high, this expenditure can be easily recouped during the life cycle of modern machines,  if only because they consume less energy – says VDMA.

Henkel, the German developer of the UV coating that it supplies to Godiva, puts forward similar reasons, pointing out the increases in manufacturing efficiency which 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.

Packaging machinery manufacturers are also investing heavily in innovations. The Swiss plant manufacturer Ilapak, for example, is currently introducing turnkey packaging lines to the market. The advantage here is that all the machines are optimally adapted to one another, which heightens overall efficiency. “With complete single-source solutions, the industry can significantly lower its costs per packaging unit,” promises Ilapak marketing manager Christian Romualdi. At the interpack, packaging specialists and product manufacturers will be able to see the innovations from his company for themselves.

2011 Press Office interpack