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Packaging isn’t just about making things look pretty. It’s about performance that translates to actual market outcomes with a tangible impact on revenues and profits. If we take a step back and examine how grocery stores operate, it’s no secret that stores use technology to determine their “hot points” where consumers tend to travel. These “hot points” become leverage for the retailer where they can command greater margins, exclusivity, and other forms of brand cooperation. However, it does neither party any good if the increased product exposure doesn’t lead to more sales and Repeat purchases.
Related: 3 Reasons Dry Mixes Are the Future of CPG Food
Co-founders of Smashbrand, a retail performance agency for CPGs, Kevin Smith and Michael Keplinger work with some of the largest Consumer Packaged Goods (CPG) companies such as Kraft Heinz, Duracell, and Tree Top. They use a proprietary methodology that applies marketing principles and consumer psychology to multiple testing practices usually found in high-tech industries. Their results proved successful in establishing and helping grow CPG brands. “Positioning, Attracting, Communicating, and Persuading are all part of our methodology that ties in consumer testing, audits, and statistical mathematics,” Smith explains. “No other agency operates this way, but we believe most of them will in the next few years.”
Case studies in CPG success
Red Gold, a recent client of Smashbrand, is a canned tomato brand found in almost every grocery store in America. Over the last five years, they have hired four agencies, trying to increase market share past 1%. Design and copywriting itself did not drive success. However, Smith and Keplinger doubled their sales and category growth by 216%. The specific case study is outlined here.
The 25-year-old guacamole brand, Yucatan, was also starting to get stale. The guacamole brand with old packaging had a large loyal consumer base, yet millennials weren’t going near the product. Yucatan explained to Smith that they wanted to grow 5% and that this could be accomplished by attracting more millennials. In the months following the launch of their new packaging, Yucatan Guacamole, owned by Curation Foods, saw purchase intent increase by 30% in the U.S and 40% in Canada, both with new and existing customers. These results sparked momentum to launch new products in flexible packaging. The specific case study is outlined here.
What CPG companies need to know
Package design and methodology have always been integral to the sales process, but ultimately, successful brands need to land on designs that are proven to perform. As for the methodology and psychology behind grocery store strategy, we asked the co-Founders a few questions:
How do retailers highlight specific items and why?
Sometimes it will be at the grocers’ discretion, but most likely, it is through a brand initiative or retailer agreement. You really need to have strong retail partnerships. Bringing a new product into the retailer is risky, and they want new (and established) brands to go the extra mile helping to ensure their product doesn’t suffer from shelf stagnation. Depending on the category, they will use POP displays, shelf talkers, end caps, and window signage to promote a product.
Related: The 3Cs Driving Change in the CPG Industry in Recent Times
What graphic elements are most likely to lead consumers to spend more and why?
There is not a single element that is most likely to cause people to spend more, it is more about creating a balanced approach that maps consumer buying behavior to packaging communication in the right order. Understanding the jobs that a consumer product’s packaging must do, which differ from category to category, and then aligning your strategy, messaging, and design around that goal is going to create a product that just naturally feels like it is exactly what the consumer needs. So ultimately, I suppose that they spend more. The strategy work that we do uncovers how we do this, and the multiple rounds of consumer testing get us there. When you combine packaging, design, and messaging to resonate with the most important purchase drivers for the specific category, you “most likely” will have a successful product.
What can you tell us about the psychology behind these techniques?
It’s important to distinguish between what consumers say is important to them and what they actually do. We test for performance with quantitative testing and uncover the why from qualitative aspects leading to insights that drive creative exploration. Ultimately, we find believable and resonant messaging and combine that with impactful visuals that cause consumers to infer positive perceptions of the product. That is the psychology behind it, these rapid decisions that we all make based on fast judgments about products within a competitive retail environment where we have a lot of choices.
What’s your best advice for consumers to avoid spending more than they need to at the store?
There are a lot of products on the shelves these days. It’s noisy, and due to the competition, brands are stepping up their marketing and branding efforts. Exploring all the new products that seem so compelling can be exciting. The cards are kind of stacked against the average consumer. So, I would advise going to the grocery store with a list and sticking to it. And sometimes, that’s just impossible to do at Costco.
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