Package Design Is Key Driver In Capturing Market Share

Private brands are here to stay. They continue to attract new and returning consumers, with quality as the common denominator. According to a recent study by Consumer Reports magazine, private brands either meet or exceed the quality of their national brand counterparts. Perhaps even more relevant is that private brands not only share same-level shelf space with their national brand counterparts, they actually hold the deed to the entire shelf.

According to SymphonyIRI Group, in 2010, 99 percent of U.S. households bought private brands; 74 percent of private label shoppers rated the quality of private brands as good or better than name brands; and two out of three private brand shoppers decided which private brands to buy while they were shopping.

In fact, consumers in general, regardless of what they are seeking in the food, beverage and personal care aisles, make 75 to 80 percent of their purchase decisions at the shelf. So with store brands and national brands going head-to-head on the shelf, a lot is riding on the level of visual impact they can leverage within the 2.6 seconds consumers, on average, spend deciding what to grab off the shelf.

The growth of the private label sector has been fueled in part by the recent recession, as cost-conscious consumers actively looked for ways to save money. According to the Private Label Manufacturers Association, annual sales of private label products have increased 40 percent in supermarkets during the past decade. Astute retailers have capitalized on recessionary market conditions by extending their private label brands.

However, as the economy begins to improve, retailers have to think more about their store brands in the context of a brand growth strategy versus mere product line expansion. This isn't merchandising. In fact, brand building is far from it. Creating a brand requires a long-term perspective and an equally long-term commitment.

From the product itself to the packaging, store brands have to be cultivated as a brand. They should receive the same attention a CPG extends toward its national brands. As such, private brands must elevate their packaging strategies. Simply having multiple SKUs on the same shelf as a competing national brand will no longer be enough to get your product into the shopping cart.

CPGs back their national brands with well-funded resources that make the packaging do everything it can to deliver shelf appeal. They also support their brand images with marketing and advertising campaigns to further drive at-shelf performance. From regional to national availability, the packaging for private label brands must be, at a minimum, on par with the national brands. It's really the price of admission.

An established brand holds a set of expectations that are consistently met or exceeded over time. And when those expectations are regularly met through product quality and positioning, as expressed via labeling and packaging, the brand remains healthy and strong. However, if those expectations are not met, the marketing strength of the brand is reduced. Therefore, the overriding goal has to be to protect, as well as grow, the store brand.

The most diverse range of packaging and labeling formats can be found among food, beverage, household and personal care products. From glass to plastic, bottle to tube, refrigerator to freezer, brand managers, packaging designers and packaging engineers continually face the ongoing challenge of trying to influence consumers by differentiating private label products.

Taking a page from the national brands playbook, consumers respond to new packaging designs when they reflect lifestyle changes and unmet needs. These factors are made even more compelling when the brand positioning is an integral part of the mix. Coupled with this is the fact that brand recognition, generated by innovative labeling and packaging, is the primary differentiator for in-store purchasing decisions.

Understanding the relationship between consumers, their needs and the products they buy is vital to developing relevant private label branding solutions that generate a profitable revenue stream. Packaging design plays a critical role in communicating product features and benefits with a brand identity that is memorable and influential to the point of capturing consumers' attention.

National brands are increasingly turning to the visual impact afforded by pressure-sensitive labels. Unique design attributes are due in large measure to the virtually unlimited choice of available substrates and adhesive combinations. There is also a wide range of associated decorating techniques, including inks, bronzing, embossing, hot and cold foiling, sub-surface printing, and re-sealable designs, among others.

Such a broad palette of capabilities allows a retailer to differentiate in novel and memorable ways, and helps the brand manager fulfill a multi-tiered strategy encompassing good, better and premium store brands.

The author, Dan Galovic, is Market Manager Private Brands, for the Label and Packaging Materials division of Avery Dennison Corporation.

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