Market Intelligence and Technology Essential to Effective Packaging Design

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January 25, 2011

By Maureen Azzato

Editor’s Note: This is Part Two of a two-part report from the Store Brands Decisions’ Packaging Design Roundtable. Last week’s report, “Challenges in Store Brands Packaging Design,” discussed how organizational structure, communications, brands consolidation and budget constraints affect packaging design.

Observation and listening remain two of the best tools for retailers to gather information about their customers, competitors and suppliers, and are essential to developing sound packaging design strategies and ensuring they work post-execution.

From left to right in the foreground: Todd Fryer; John Failla,  founder and president of Store Brands Decisions; and  Lindsey Hurr . In the background left, Kim Coovert.

Simple, yet seemingly obvious steps, such as walking the stores and observing customer interaction with store brands and their engagement at the shelf can yield extremely valuable insights, according to retailers and design agencies who participated in the Store Brands Decisions’ Packaging Design Roundtable in November, sponsored by Avery Dennison.

Walking the store with his private label vendors and package design team is vital to the strategic process, according to Joe McKie, vice president of corporate brands for Winn-Dixie Stores Inc., who noted that retailers must tap into all available resources for market intelligence.

“We’ll bring [vendors] in and walk the stores and it’s interesting what you learn,” he said. “[While] we walk around the store, we talk about our strategy and what are we trying to get accomplished,” he said, adding that often you don’t realize certain things about your products until you see them on the shelf competing with other products for consumer attention. And Winn-Dixie doesn’t just walk the stores with store brands vendors; they do it with national brands, too. “The national brands are a rich resource of information.”

Joe McKie

In recent years, more vendors -- both for store brands and national brands – are much more willing to help retailers differentiate themselves. “Because frankly, they’re trying to differentiate themselves from other vendors as well, [and want] to be your preferred vendor and ensure that both of you make money,” McKie said.

Winn-Dixie also exchanges ideas with non-competing retailers, and in some cases will partner with some to execute on a new idea, “which then makes it a little more cost effective for a vendor,” McKie said.

Nancy Dumais, director of branding and design for Delhaize America, said you have to get out into your own stores -- and into competitor’s stores -- to do the merchant’s job justice. “You’ve got to look at everything. You’ve got to look at the whole store and then every competitor right there next to you,” she said. “You need to go into other stores, as well."

Walking stores after a new store brands line is launched or redesigned is also critical, said Kim Coovert, brand manager of own brands food and drug for Sears Holdings/Kmart, which last year launched its Smart Sense line across multiple categories.

Kim Coovert

“If you don’t go back [in the store] and acknowledge what you did, first of all, you’ll never be better on the next line extension, and secondly, you don’t have that time to really share and rejoice, which leads to other ideas,” she said, noting that subtle things pop out in the stores that might have been missed in the design process. “We just went through [this] exercise, and for us it was very beneficial” and yielded a list of future plans and adjustments, Coovert said.

Thinking Big and Different
Design firms and other companies that support product and brand design -- such as labeling companies, structural packaging companies, brokers and vendors -- are also a wealth of knowledge since they often do work for national brands as well. Avery Dennison, for example, recently redesigned Kraft’s salad dressing labels using clear pressure sensitive labels, one of several tactics that helped rebound category performance, which has been waning against private label competition, according to Matt Rompala, business development manager for Avery Dennison.

Matt Rompala

We can drive “that same capability to private brands,” he said, noting that national brands and store brands are competing on the same level,” Rompala said. “We’re looking at how can we drive innovation and allow store brands and the retail community to drive more innovation, even beyond the national brand front.”

Kimberly Mallek, creative director and partner at Might Fudge Studios said the Kraft example also illustrates “how we all have the opportunity to make our suppliers better, because if we’re really thinking about how we own the private label industry and what we [can] make it be, the more that we’re able to challenge our vendors to not necessarily do what the [national] brand does, but to see and think bigger,” she said. “The more credibility we’re able to add through quality packaging, the easier it is for a customers to convert and then make a better decision.”

Kimberly Mallek

Store brands packaging design has come a long way over the past five years, Mallek said, but added that design agencies should be even more aggressive agents of change and quality improvement. “Design agencies can be bigger leaders than they think because there is a market for that creativity… it’s all in presenting and improving it in such a way that it is executable.”

Supporting Execution
Without questions, the packaging design process is complex and onerous, and involves many parties, including key retailer decisions makers, the design firm(s), brokers, vendors and others. Managing all the moving parts effectively and efficiently is challenging, and some retailers such as Smart & Final use workflow management software to help them execute.

Smart & Final uses a centralized tool by Marketing by Design, the retailer’s design firm, which also enables online approvals. Before converting to a centralized workflow tool, Smart & Final used to work with several different design firms and managed projects manually. After partnering with Marketing by Design and seeing their proprietary workflow tool “there was just no way we could continue to do what we were doing, especially with the consolidation of brands that we were working on,” said Todd Fryer, director of corporate brands marketing.

Todd Fryer

When senior management advised the Smart & Final store brands team that they wanted 2,500 SKUs resigned in less than a year, Fryer knew he needed a technology structure to support his execution. “The workflow tool is what drove that project and put a process in place that held everyone accountable to a schedule. Stakeholders in the project were identified up front and those were the people involved in artwork approvals, he noted. “We were able to accomplish our goal of rolling out the brands on the timeline that we promised, and we couldn’t have done it without having a process and a tool.”

In addition to saving money, Fryer said that the system dramatically reduced the time it took to release a piece of art work, down to two or two-and-a-half weeks from the seven to eight weeks it previously took, which accelerating speed to shelf.

Allan Meyerson

The other benefit of workflow management is that all the brand work “is protected 100 percent in real time,” said Allan Meyerson of Group360 Worldwide, which also has proprietary workflow tools it offers clients. “That is in fact what helps builds brands and builds business. So it’s hard for me to believe anybody would operate otherwise.”

While many retailers acknowledge the benefits of workflow solutions, budgetary constraints prevent many from making the investment. Several retail participants in the roundtable said they primarily use Microsoft Excel spreadsheets to manage projects.

Workflow management, however, is a two-way street, according to Dumais of Delhaize America, and each party--design firms and the retail organization -- have to pull their weight and establish controls. “In an ideal world, both sides would have some type of technology tool that they’re using,” she said. “In our case, neither one of us had one that was very good so we had a lot of challenges.” Workflow management technology is something that we should all aspire to do and have. We’re actually looking in the future at using some internal project management systems … even though they’re not ideal for what we’re doing, it would be far better than the way we have been handling it.”

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