Investing in success

Editor’s note: Scott Young is president of Perception Research Services International, Fort Lee, N.J..

How can we get better at packaging? This is an increasingly common question, as senior marketers have come to recognize the power of the containers that envelop their products. It’s also a question with many valid answers, as there are several potential paths to improvement (finding the right design partners, investing in innovation, elevating design within the organization, etc.).

However, it is clear that effective packaging research is a critical part of the equation. The right information and insights not only prevent major mistakes, they can (and should) also focus resources and improve return-on-investment (ROI) from packaging innovation and redesign. With that thought in mind, this article shares several best practices for using research to improve packaging at an organizational level, across brands, categories and countries. It also cites examples of how leading companies are creating competitive advantage through packaging research.

Best practice #1: Validating

The road to better packaging actually starts at the end, with the research that it is done just before formal go-ahead decisions. This final step, often termed validation or qualification, is realistically when the most research takes place - and it’s the point in the process where companies are most likely to drive consistency (in methodology, in sampling, in decision criteria, etc.).

And consistency is indeed a primary consideration. If a company applies the same core methodologies and metrics across studies, the benefits go well beyond the ability to build robust databases and norms. Even more importantly, marketers, designers and researchers can begin to build a common language around packaging. When they speak of shelf impact, for example, they all know what it means, how it is measured - and what success looks like. Conversely, when a company uses varying methods for different studies or countries, it loses this understanding - and the ability to systematically measure and improve on an organizational level.

So which validation process should be used? This topic merits an article unto itself - and the intent here is not to compare or recommend specific methodologies. However, we can suggest three underlying principles to look for in a global validation system:

  • It should center upon quantitative multi-cell monadic studies, which simulate the introduction of new packaging vs. competition (rather than side-by-side comparisons of alternative designs for the same brand).
  • It should start at the shelf, with accurate measures of shelf visibility, shopability and purchase (as these on-shelf measures have been validated to be most predictive of in-market performance).
  • It should ensure high-quality stimuli that accurately reflect both the shelf and individual packages (as any packaging study is only as valid as the quality of what shoppers see and react to).

While these points may seem intuitive, they have major implications in terms of methodology. For example, our experience suggests that shelf sets need to be at least 75 to 80 percent of actual size to gather valid measures - and that physical packs are needed to accurately assess changes in packaging structure. Thus, to get accurate findings, companies do need to invest in both stimuli and more robust methodologies (typically, in-person interviewing).

Finally, in terms of packaging validation, there are two important factors that often separate the great companies from the good:

The first is implementation and follow-through! Many companies have best practices in place but lack a protocol for determining which packaging changes or decisions require full on-shelf validation. Thus, some brands, projects or even countries cut corners and “avoid the system” to save time or money. The best organizations couple a consistent validation process with a project classification system (and enforcement process) so the best practices are followed.

In addition, the best companies apply the same rigor and discipline (of on-shelf testing) to new products, to ensure that they break through shelf clutter, convey point-of-difference and drive trial. Other companies apply best practices only to re-stages, despite the fact that effective packaging (and shelf visibility, in particular) is absolutely critical to new product success.

Best practice #2: Screening

Once companies have a consistent validation process in place, their focus often turns to success rates. For example, what percentage of new designs tested meet action standards? What percent win vs. current packaging? Typically, this figure hovers close to 50 percent, which reflects that it is indeed difficult to drive wins on-shelf. However, it’s definitely possible to improve this success rate by changing the screening process used to determine which designs go into validation studies.

While screening approaches vary widely, the commonality is that they generally rely upon side-by-side comparisons of designs (“beauty contests”), which lead shoppers to overemphasize aesthetics - and to overstate differences among options. As a result, marketing and design teams regularly emerge thinking that they have hit home runs, only to find out too late that their new packaging is not really making a difference at the shelf.

To make screening research more predictive of success, the key is to ensure that it emphasizes the same key metrics as validation studies. Most importantly, this involves incorporating the shelf at the earlier stage, to gauge if a new packaging system is likely to significantly impact visibility or shopability - or if a new product is even noticed within shelf clutter. Often, even 20-30 in-depth interviews (using physical or large two-dimensional or virtual shelves) can provide greater insights than hundreds of interviews lacking this context. It’s also valuable to get a better sense of the first few seconds of packaging communication, through behavioral approaches such as pack viewing patterns and neuroscience measures. These tools can help make the screening process less aesthetically-driven - and more successful in identifying approaches that will break through, connect emotionally and ultimately succeed in the store.

To drive this transformation, several companies have developed global networks of retail learning centers. We’ve found that “mini-stores” provide an excellent context for qualitative screening studies, as they bring shoppers (and new packaging concepts) into the aisle. Already, we have seen their impact in helping companies recognize when they are “talking to themselves” (through very incremental design changes) and to test a wider range of design options.

Best practice #3: Benchmarking

In addition to rethinking screening, another path to success is to invest in the right packaging initiatives - and to set appropriate objectives and action standards. Yet while nearly all companies invest significantly in developing and validating new systems, remarkably few have processes in place for deciding when to make packaging changes - or for determining specific redesign objectives. Instead, restages typically come in response to competitive changes and/or declining sales - or perhaps they are driven by new advertising and/or a new brand manager. Nearly always, they are rooted in opinion/intuition about what needs to be “fixed,” which may be misguided. The problem is that the research (and insight) often comes at the end of the process, after a great deal of time and energy has been spent solving the wrong problem - or perhaps even redesigning the wrong brand.

An effective solution lies in consistently assessing (or benchmarking) current packaging at the outset of redesign efforts, relative to competition and historical norms. This process, which we call package baseline, is primarily a matter of moving the control cell (from an eventual validation study) up in the project timeline, so that the learning can be used to refine design objectives and inform action standards. Often, we also include an additional name-only cell to uncover visual equities (via drawing exercises) and emotional triggers (via neuroscience) - and to gauge the contribution of current packaging to brand imagery. (Are we selling because of - or in spite of - our packaging?)

A few forward-thinking organizations have actually taken the baseline process a step further, by instituting annual or biannual audits of current packaging vs. competition. These audits help to allocate resources and investments across the company, by uncovering which brands are most in need of packaging changes. They also serve as a starting point for these redesign efforts by identifying areas of competitive disadvantage or weakness, which often translate to specific and focused redesign objectives.

Best practice #4: Innovating

Along with preventing mistakes and increasing the likelihood of successful changes, packaging research should also help drive breakthrough innovations.
And the reality is that revolutionary, game-changing new concepts rarely come from studying current or competitive packaging. Instead, they are typically rooted in addressing major barriers and/or uncovering unmet (and often unarticulated) consumer needs.

To identify these issues and opportunities, it’s best to start at the store. Walking the aisles quickly reveals that packaging often doesn’t appear as intended, due to the effects of shelving, signage or merchandising (compromising legibility, obstructing branding, etc.) - or the packaging structure itself (bags knocked over, packages not facing forward, stock-outs, etc.). These retail realities serve as barriers to purchase which directly impact the bottom line. And while these challenges can’t be fully eliminated, they can be mitigated through effective graphic design and investment in better packaging structures and merchandising systems. For this to happen, however, there needs to be a consistent process for visiting stores, classifying these issues and feeding this information to marketing, design and R&D teams. Several leading companies have recently begun doing these “retail reality-checks” in a disciplined way, as an input to design and innovation briefs. This process helps ensure that packaging investments solve major problems on the shelf.

The home is clearly another valuable source of big ideas. Specifically, by documenting the packaging life cycle (from purchase, through transport, storage, usage and disposal), companies can often identify opportunities and uncover unmet needs. Often, we find that the biggest wins come from driving increased consumption by making packaging more visible in the home - and/or by tailoring packaging more directly to specific usage occasions. Indeed, some of the most dramatic and profitable breakthroughs have come from simple ideas (such as fridge packs and 100-calorie packs) rooted in in-home ethnography. Thus, a fourth best practice is to develop a consistent process for reaching out to the store and the home as the most likely sources of breakthrough innovation.

Best practice #5: Integrating

Finally, the best companies recognize that packaging is one part of a larger effort to win at retail. To put it another way, they know that it is difficult to create great packaging without an underlying understanding of the shopper - and of how packaging interacts with shelving, merchandising and other in-store variables.

To this end, more companies are breaking down the silos within their organizations that separate packaging research and shopper insights. On one level, they are conducting in-store observational research at the outset of redesigns to ensure that the shopper and the retail insights are incorporated within design briefs. At our firm, this has involved taking eye-tracking technology to the store, to document aisle navigation, interaction between packaging and signage and the purchase decision process.

In addition, marketers are increasingly evaluating packaging in a broader context - and/or using packaging studies to assess alternative planograms or point-of-sale merchandising strategies. We have used virtual shopping tools to assess packaging in the aisle and in the context of end caps, shelf talkers and alternative shelving adjacencies. In some cases, this has allowed us to isolate the added-value and potential ROI from in-store signage. In others, we’ve found that alternative shelf placements have had an enormous impact on visibility and purchase/trial of new products.

Thus, on an organizational level, a fifth best practice is to build bridges between packaging and point-of-sale/shopper research, in order to improve packaging, to benefit from cost efficiencies - and to gain a more holistic understanding of how to win at retail.

Can make a difference

As companies recognize the power and importance of packaging, they will also come to realize that it is not easy to systematically get better across brands, business and regions. However, market research leaders can make a difference by instilling the right processes and ensuring that their organizations consistently:

  • Identify primary issues and opportunities - through store-based research and in-home ethnography.
  • Know the strengths and limitations of their current packaging - via benchmarking or baseline research.
  • Allocate resources toward the right brands and projects - through auditing and cross-study analysis.
  • Properly screen and validate new concepts - by focusing upon on-shelf performance.

Companies that incorporate these best practices are likely to dramatically improve their odds of packaging success. They are less likely to divert energy on the wrong efforts - and/or to end up “talking to themselves” with modest packaging changes that don’t make a difference on shelf. Ultimately, the investment in consistent (and proactive) packaging research processes will pay off in a stronger ROI.