Pack up the gloom

Wednesday, March 18th, 2009

Consumers in Sainsbury’s, who may already be overloading on the orange of the supermarket’s core branding, are now finding themselves swamped in the bright three-tone stripes of its Basics range. It’s a clamorous visual reminder, as if one were needed, of the hard times facing the economy.

As the gloom seeps from high finance down to the high street, purse strings are contracting, leaving retailers and brands jostling for a slice of dwindling consumer expenditure. Moreover, with the battle-ground for these customers very much in the aisles, the final decision over which product goes in the basket, and which is ditched or switched, is driven in no small measure by their pack design and branding.

It is, therefore, a crucial form of advertising that plays out before shoppers, right at the point of product selection. Dave Brown, chairman of design agency The Brand Union, cites its work for Andrex promotional packs as a case in point. ‘When you’re looking at this stacked on-shelf, what you’re really seeing is a 48-sheet poster campaign,’ he says.

This ability to double as visual advertising has always been one of packaging’s primary strengths, but even more so now, as shoppers consciously and carefully adjust their baskets to save a few pennies here and there. While marketing specialists have argued for years that the real battle is taking place on the supermarket shelves, some agencies complain that brands are not doing enough to promote themselves in store.

‘Consumers are starting to take more notice of product presentation in-store,’ says Sarah Hamburger, account director at market research company Spring Research. ‘We know that they read the copy on labels, and this seems to be an increasingly good way to stand out.’

However, consumers are not alone in feeling the financial squeeze. Retailers and manufacturers, too, face budget cuts in their marketing activity. Packaging design is just one element in a gamut of marketing communications channels that need to be considered.

B&Q packaging and point-of-sale manager Jonathan Couper explains how costs have to be controlled in this market. ‘We have reduced the amount we will invest in design for 2009, which I expect is the case for most companies,’ he says. ‘The reduction is not dramatic, as the business still recognises the importance of good design, but we have made a conscious decision to seek out smaller agencies as they deliver greater value and have significantly built on the use of brand guidelines.’

‘Budgets are being cut,’ agrees Jon Davies, managing director of packaging design agency Holmes & Marchant. ‘But it’s not necessarily fees that are reducing; there are just fewer projects around. And clients are asking for more. We have to demonstrate value in real terms: return on investment, awareness, sales, whatever it may be.’

According to Davies, brand owners should not be considering a complete structural redesign because it will not deliver within the first year of investment in the current climate. The trick, he says, is to look at tactical branding work which takes in the whole marketing communications mix, unifying it with a consistent aesthetic and single strategy. This is an approach that Holmes & Marchant has taken for its clients, including Guinness and Cava producer Freixenet.

Kate Waddell, managing director of consumer brands at design agency Dragon, argues that the smart route to keeping a portfolio alive on-shelf is to dovetail some design ‘refresh’ work with a product innovation or addition to a range. ‘If you bring in a new line and tweak the design, you can achieve a halo effect,’ she says. Tweaks and refreshes are less expensive and risky than range-wide overhauls, but not everyone agrees that a conservative approach to design investment is what is required.

‘Packaging on shelves in the multi-brand retail environment is mostly disappointing, dull and predictable, with the majority of ‘new’ design being shy tweaks and almost imperceptible updates of how it has always been,’ claims Nina Jenkins, creative director at Added Value UK, a brand development consultancy. ‘Despite their alleged frugality, consumers still want to be seduced by new options and feel that their choices are fresh and relevant.’

While many FMCG purchases are fairly functional in nature, there is always a potential aspirational element. Jenkins’ assertion that consumers ’still want to be seduced’ chimes with another observation from Waddell, that shoppers do not want marketing to remind them that they have less money to spend.

As supermarkets’ budget ranges are pushed to the forefront against the back-drop of a struggling economy, it could be argued that product packaging that talks of pleasure and high quality, not just value, will be most successful.

Waddell believes there to be an opportunity for so-called challenger brands, which sit below the well-known brands, to ramp up their premium design cues so that consumers do not feel negative about trading down from the leading brand to save money.

Certainly, many shoppers switch to a ‘checks and balances’ approach to shop-ping, trading down in some categories, but permitting themselves to indulge in others.

In either case, it is clear that the role of packaging design is hugely important in influencing brand perceptions and purchasing decisions. However, the dynamic is far from simple. Many factors remain at play, and a straightforward shift to cheaper, basic ranges is unlikely to be the sole outcome of constrained spending.

Designers agree that it is crucial for clients to keep an eye on the long-term strategy of a product range and that packaging should be seen neither as a ‘cheap’ way to spend marketing budgets (compared with advertising), nor as a relatively unimportant element that can be cut from the branding schedule.

‘Packaging redesign in circumstances like these is often a kneejerk reaction to make marketers feel better - leading to results that are often counter-productive,’ says David Haseler, strategy director at design agency Smith & Milton.

‘The same thing happened in the last recession. The pack is an easy place to do things, and there is plenty of relatively cheap pack design for marketers to find by shopping around.’

As in all areas of marketing, design and innovation, the debate rages over whether it is more expedient to cut budgets or to keep spending through the hard times to renew growth when the economy recovers. Realistically, some brands will benefit from an affordable and modest refresh, while some may need the shot in the arm provided by a more substantial design investment. Perhaps the crux here is the time frame over which brand owners expect to see a return on this investment.

Either way, as Jenkins points out, packaging has a lot to live up to. ‘After the strategy, positioning, advertising and marketing is said and done, the moment of truth is when the shopper is face to face with the choice of packaged products. It is essential that the pack is irresistible, with clear, simple standout from all the others on offer. Cautious tweaks will not engage, but intelligent, compelling and relevant redesigns based on good ideas - that’s another story.’

This article was written for Marketing, 3 March 2009.

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