KNOWLEDGE PACKAGING INNOVATION maximising ROI when sales are down Presented at Innovation Village, June 09, 2011 Hey there, We had the privilege of speaking at the wonderful Innova&on Village workshop last Thursday, put on by Atoz Publishing and Atoz Events. For those that were not able to a@end (or even for those of you that did) here is an annotated version of my talk which should give you a sense of the content and hopefully a bit of inspiraEon. If you have any quesEons or comments, don’t hesitate to contact me at [email protected] Best regards, Douglas Kaufman, Cocoon Group
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KNOWLEDGE
PACKAGING INNOVATION maximising ROI when sales are down
Presented at Innovation Village, June 09, 2011 Hey there, We had the privilege of speaking at the wonderful Innova&on Village workshop last Thursday, put on by Atoz Publishing and Atoz Events. For those that were not able to a@end (or even for those of you that did) here is an annotated version of my talk which should give you a sense of the content and hopefully a bit of inspiraEon. If you have any quesEons or comments, don’t hesitate to contact me at d.kaufman@cg-‐eu.com Best regards, Douglas Kaufman, Cocoon Group
“A guy walks into the Colgate boardroom…”
When originally given the theme for this event, I immediately thought of the legend of the guy that went to the Colgate boardroom with an envelope in which he says he has a formula to instantly increase sales of all toothpastes 10%, and that he will give them the envelope for 1 million dollars. In this parEcular legend, the board of Colgate is a sporEng bunch, and they take the guy up on his offer. So he hands over the envelope. Any idea what was wri@en on the paper inside?
+4.5%
Simply increase the diameter of the package opening 4.5% and sales will go up 10% as people will use that much more toothpaste per usage. So, even if you forget everything else I’m about to say, remember that you just got 1 million dollars worth of packaging innovaEon advice right there.
The brief… Give a 30 minute presentation on “packaging innovation when sales are down”
So, originally I was given this brief by Jeff to give a 30 minute talk on ‘packaging innovaEon when sales are down’ which seemed straigh\orward enough –unEl I actually got home and began wriEng this presentaEon. At which point several quesEons came up which would profoundly affect what the content of the presentaEon would be. For instance…
Why are sales down?
Are we in a recession?
Why are sales down?
Because if so, there are several pack innovaEon strategies we might follow to help us weather the bad economy. Firstly…
Can we lower our bottom line?
If lowering costs is the objecEve then the best way to innovate your packaging might be to get rid of it. Over-‐packaging is on people’s minds these days so a move to less material could mean not only an easing of your budget, but could also make you more popular with consumers. It could also make you more compliant with gov’t regulaEons. Sainsburys is currently the first retailer being sued by the government for over-‐packaging.
Do you really need all of those flashy colors? A minimalist look, using less ink will save you money and give you a more sophisEcated look and feel. And before you go saying “it’s all well and good for these niche products to go minimalist, but I’m in a mainstream product like juices and fruit drinks. We need lots of colors, shiny eye catching materials, shrink sleeves. It’s just the way the category works.”…
Well, here is your category leader –a simple 2-‐3 color design on recycled paper on a standard bo@le. Something innocent ‘gets’ that we all tend to forget -‐Simplicity catches and holds our a@enEon through the clu@er of flashy. Now innocent is the ‘thought leader’ as well as the market leader in smoothies. And if this isn’t convincing enough….
75,380,201,500 Cans printed yearly
The biggest, boldest brand in the world just simplified. Not only does this return the brand to it’s iconic roots, it also saves them a ton of money as fewer colors are used. I don’t know the exact number of colors, but somewhere, there’s a guy that makes yellow ink who cries himself to sleep every night.
Can we innovate the way we create packaging?
In a recession situaEon, maybe we should innovate how we do packaging rather than the packaging itself -‐ finding a more efficient way to produce your packaging. Of course there is.
Almost without excepEon, print supply networks are grossly inefficient. You have brand managers, marketers, trying to manage an essenEally technical process. Oien data and knowledge are in the hands of the suppliers themselves, making it either too risky, too much hassle, or too Eme consuming to change suppliers to someone be@er suited to the project or the brand. We oien get a brief which expresses a desperate need for revitalizaEon when basic tools such as the bo@le type or label size have already been decided…by the printer!!!
Oien it's enough to centralize the data. centralize the knowledge and communicaEon, freeing you up to find the best, most efficient soluEons for each brand and product. That, for instance, is we created our division CG Artworx* to do.
*for more about CG Artworx, check out our Knowledge Center (www.cg-‐artworx.com) or our website (www.cg-‐eu.com)
Can we help our customers save some money?
Bulk packs, economy sizes, and value packs save your customers money and also save YOU producEon money!
Clever little bag -65% paper -60% energy reduction -60% water reduction -60% diesel reduction -10,000 tons CO2 reusable
The clever li@le bag, aside from being sustainable and taking less to produce is also reuseable..further adding value and punng an innovaEve spin on the typical shoebox.
Are sales down because we’re in a dull or commoditized category?
Why are sales down?
Maybe we’re not in a recession at all. Maybe we’re just in a dull or commodiEzed category. What pack innovaEon strategies can we follow in this case?
Can we use packaging to ‘bust out’ of our category and enter new ones?
Salt: the ultimate commodity
Design is a tried and true way to bring value to a commodiEzed category. Especially 3D design. It’s not enough to try to put a pre@y picture on the same old plasEc bag and think we’re going to bust out of commodity-‐hood. Think material. Think shape. Think outside the bag!
Another innovaEon strategy in a highly commodiEzed category is….no innovaEon. SEck to your roots even as your compeEtors try gimmick aier gimmick to reinvigorate the category. You will stand as an icon that stands for stability and security. This is obviously a long term strategy.
Are sales down against our competition?
Why are sales down?
Another reason sales might be down is against our direct compeEtors who are either more acEve, undercunng us with price or promoEon, or seen as a be@er value for whatever reason. Packaging innovaEon can help us recapture a leadership posiEon in consumers minds.
Novelty
Accessibility
Functionality
Brand relevance
*note to self…word-‐play jokes do not translate well.
For pack innovaEons to do this most effecEvely –to bring real long-‐term value, they will provide a sense of novelty, accessibility, funcEonality, and/or brand relevance. Heinz tomato ketchup is a great example of a leader under pressure from compeEtors, private labels, and newer condiment choices who re-‐captured a sense of category leadership through real packaging innovaEon. The result was a product that was be@er, more a@uned to consumer needs, and Heinz seemed like the most up to date, modern brand out there. Suddenly everyone was rushing to …catch-‐up!*
Sometimes it’s simply about creatively applying
technology to fit your brand and your product
What role does packaging play as part of the innovation pipeline?
What if we’re not talking about packaging innovaEon at all, but packaging’s role in product innovaEon? Well, I’ve got some advice for you here as well…
Communicating the new value proposition
Unless everyone coming into the store has seen your million dollar TV advert and is rushing out specifically to buy your new product, then packaging plays the most crucial role of all in product innovaEon…
Shape
Color
Nomenclature
materials
Tools are all right here... USE THEM! (again, it’s not just slapping on new pictures)
Gums are a great example. Originally for kids and full of sugar. When sugarless gum came out, gum manufacturers needed to convey that this was not a children’s product anymore.
Every tool was used –color, nomenclature, materials, shapes, etc. to build on the idea that gums are an almost medical product for adults.
A recession situation innovate to lower costs innovate for greater process efficiency innovate to find savings for customers
A commodity situation
innovate to change categories value through design (especially 3d) don’t innovate –celebrate your heritage
A competitive situation
innovate to regain relevance innovate to capitalize on new techs
Why Sales are Down…
Packaging is often the first, best, and only chance at the point of sale to convey the new value proposition!
As part of new product development
Conclusion: What do all of these strategies and tactics have in common?
An investment in brain power. When sales are down for whatever reason, It’s not about spending less. it’s about spending smart. And smart means invesEng in brains. If you get the right creaEve partners, they can help you save money on materials. Save money on prinEng. Save money on distribuEon or even producEon if that is part of the objecEve of the brief. If you try to save money by holding a pitch or lowballing your agency, you will absolutely not get the best soluEon. And If sales are down, you cannot afford not to get the best soluEon! Remember, it’s about return on investment–Making money! Not saving money!
For more information, please contact: Cocoon Group Douglas Kaufman [email protected] 00420 603 840 287 U Pruhonu 13, Prague, Czech Republic 170 00 www.cg-eu.com
Thank you for your attention.
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