CEO at Getbrand
return on investment rate
According to research, the customer decides to purchase your product in less than 6 seconds.
There are from 30,000 to 100,000 items on the shelves in present supermarkets. How can people distinguish your product from this diversity, and most importantly, how can they choose your product from many of competitive offers? In this case, when there up to dozen of your direct competitors and you are located on the same shelve, and some of them have more loyalty and trust of the audience; own brands, and also indirect competitors – products of different category with similar consumer properties, when customer may choose for breakfast between your yogurt and oatmeal porridge of another manufacturer – packaging design is the only contact point with your customer in store.
Someone says, “What’s about advertising?” Alas, nowadays advertising already plays a less role than ten years ago. Only if you are ready to spend tens of billions of rubles on broadcasting your commercials on federal channels in prime time. Modern man is constantly attacked by advertising messages throughout the day. And each of us has developed its own block on these persistent actions. When people view ads, they are not ready to buy anything at this moment. We are distracted, trying to press the “skip” button if it’s possible, scrolling through — we do everything so that it does not irritate us at the moment.
Another thing is when a customer comes to the store for shopping. At this moment, he is ready to buy. Walking with a trolley among rows of goods, the buyer looks at the packaging design. At this point, you have a chance to sell more of your products than your competitors will sell that day. However, does your packaging design ready for it?
So far, packaging design has always been a blind spot for almost all manufacturers. First, they solved the problems associated with production, and then — with sales. But the sales problem was carried out by selling the product to distributors or by delivering a batch of goods to distribution networks. Done, at this stage the problem has been solved for the majority. But this is only halfway. It didn’t matter how it was sold. Everything was sold. However, the times of overproduction has come, competition has increased, distributors has been closing down the business, retail chains have become more powerful and much more exacting in what they have on the shelves. They have long been counting such a parameter as profit per square meter of retail space. This parameter directly depends on the profit from each product category standing on the shelf, and this parameter, in turn, is decomposed into the frequency of purchase of each SKU in the category. Therefore, according to this parameter retail chains form their assortment. They put on the shelves what has a high “leaving”, increasing their turnover, and hence profit.
Purchase frequency is a key parameter of effectiveness evaluation.
How should an ordinary manufacturer behave in this situation? How to increase your performance? And why do we need packaging design?
Now even the lazy one doesn’t talk about how successful this or that design is. Anyway, this is just a point of view. These talks like “i like it — i don’t like it”. To this day packaging design remains a “blind spot” for many manufacturers. Because it is a completely different discipline and competence. Many entrepreneurs don’t understand what to look for when they have to decide which option to choose for a new packaging design. Most often, decisions are based on “I like it — I do not like it”. But you don’t run your business like that…
Effective business has long been measured in terms of numbers and indicators. It is vital for business that the point of contact with its customer, like packaging design, is measurable. What indicators should it be measured?
When the purchase frequency is obviously key indicator of effectiveness evaluation, then if the frequency is high, it will directly lead to an increase in gross revenue, market share and accelerate your turnover and the rate of return on investment ROI. And this is the main indicator in business. It reveals what earnings your business have in relation to the rate of investment in it.
So what may influence on purchase frequency increase? To increase this indicator your sales team is already powerless. They have already done their job — delivered your goods to retail. Frequency purchase will depends on marketing activities: BTL-actions, promotion, tasting and commercial packaging design. When first three activities stimulate purchase frequency with reducing your return, then commercial packaging design increase this indicator at comfortable for you rate of return. It is important that this cannot be achieved by a usual design, but only by a commercial packaging design. What do I mean by “commercial”?
Commercial packaging design is a design that has a high conversion to the purchase of your product.
In other words, people are more likely to buy products with a commercial packaging design.
If the commercial packaging design directly affects the purchase frequency, which, in turn, affects sales, we need to admit that the commercial packaging design directly affects the gross revenue of the company.
However, how to distinguish commercial design from just design or something else? For our many years in this field, we have come to the conclusion that if you want your product to be bought and bought more often, then your product should be:
1. Eye-catching at supermarket shelves.
2. Memorable by some feature so people with a positive consumption experience can remember this making a purchase again and again. For example, everyone can imagine Heineken bottle — your brain easily visualizes a green bottle with a red star. Or a box of Nike sneakers — a red box with a white swift “squash”. Of course, ads have done it, but producer has used simple symbols easy to remember for an average customer so that these brands easily penetrate the life of the consumer, and this is especially relevant when budget for promotion is limited or doesn’t exist.
3. Obvious. Any buyer should understand what you are selling him. The packaging design must be at least 30% consistent with the characteristics of the category.
4. Able to convey product benefits to customers or why customer should buy exactly your product.
Commercial packaging design is responsible for these all.
As you can see, commercial packaging design it is not just a design. This is a set of measures for neuromarketing, psychology, design, copywriting, which, working together give the producer opportunity to sell more often, and therefore sell more, with comfortable for him rate of return.
This principle was set by me in the basis of the general methods at Getbrand. We call it “Three layers of efficiency” ™. We develop the packaging design based on this tool.
I said above that commercial design has the only function — to sell your product to consumers. Three parameters demonstrate how effectively this function works in your packaging design. We call them layers. Visual, Contextual and Conversional.
It is responsible for remarkable design on the shelf among the competitors or in the other environment, where a lot of other “visual noise”. In addition, this layer is responsible for ease of perception and recognition. It is the first thing the customer notices. The object should stand out in comparison with the environment, be contrasting, attracting even lateral vision, even an abstracted look.
It is answering the question — what is your business about? What do you offer to your customer? What is your value proposition? And as you can see, this layer develop the idea, exposing the use of your product.
It is answering the question: “Why customer have to buy your product or service?”. This layer shows the benefits of the purchase. “What does finally get the buyer?” It is desirable that this would be a significant benefit. The benefits are both rational — facts, figures (not about you, but about what the buyer may get), and emotional — what the buyer may feel from contact with your product or after your service.
This is how it looks like in practice
What is the result of the method?
In the first year after the launch, EPICA entered the TOP-10 rating at Forbes brands created “from scratch” in Russia, bringing the company 1 billion 350 million gross revenue in the first year after launch.
In two and a half years, EPICA has become:
For money at spoon yoghurts
For drinking yogurt at all Russia
For money at large cities with over one million people
In 2018, EPICA was noticed by Nielsen as the most innovative launch among all European companies.
Thanks to the EPICA brand, the Ehrmann plant operates 7 days a week double shifts, and five new production lines operate at EPICA.
EPICA is 30% less involved in promotion than the products of direct competitors in retail chains.