Unlike in the past, packaging is not just to wrap a product, today it holds the importance and status equal to that of the product. The entire packaging development scenario has changed from earlier being just a carrier of the product to now being more of an experience or convenience for the consumer. Today, consumers expect a lot more from the product as a whole right from the graphics & design of the pack to the information on it, to the shape & colour and the quality of the product.
In the fifth part of the six series webinar we are going to touch upon the significance of packaging and brand design, its evolution over the years, how digitalization helps the entire packaging and product development process to speed up, how consumers view packaging in today’s time and much more.
Moderating this interesting session was Dhananjay Balodi; Executive Director & CEO; Encept, Sudarshan Kullur; VP – Marketing & Innovations; Trigon, Priyanka Bhatia; Assistant Category Manager – Buying & Merchandising; Big Basket, Sukhdev Singh Saini; Packaging Lead; Colgate Palmolive and Harshavardhan Chauhaan, VP – Marketing & Omnichannel, Spencer’s Retail & Nature’s Basket.
Process of packaging & branding
In Big Basket 2-3 months is the maximum timeline for us to turnaround, informed Priyanka. The major chunk of timeline is divided and spent on – one is the product development at the core itself, which is where we start and the other half tends to be the overall branding and packaging design.
The development is the key focus area for us because at the end of the day, we are still on the same platform competing with the mass brands, said Priyanka. We should be able to stand at par and be recognizable as standalone brands. With the whole wave of ecommerce consumers coming in there is no need for us to only look at white labeling. We moved on to developing our brand identities. With the access that we have nowadays to consumer data, we are able to pinpoint out customers’ geography, buying patterns, bill values and the kind of categories they purchase from. This allows us to create a fully rounded brand. We spend a lot of time in the development of our brand; looking at what really will communicate and then creating a timeline as to what it will stand for in the future alongside the legendary mass brands in the market.
Branding differently across categories
Speaking about branding differently for different categories, Priyanka said that they look at branding very differently from staples to more indulgence or more care-giving categories. We have a host of private label brands and each stand for a unique value proposition and has its own identity on the platform. So, for staples, the majority consumption happens or at least the buying happens based on the price points and how distinguished it is in terms of quality. For us, staples largely, the private label penetration is very high. Even if I look at fruits and vegetables, private label penetration is very successful since the last couple of years. We have seen tremendous growth, majorly because earlier we used to be a distributor sort of model and now, we have come to a point where we are directly sourcing from the farmers. In that sense what we are delivering to the customer is now getting closer and closer to what they are looking for. That clearly makes a difference as to how we build a brand.
We do have access to the shelves and yet my shelf life is limited to the five-inch screen and for a customer to recognize a legendary brand would be very easy. They would just blink and buy that product but for them to recognize a private label brand in the equal capacity within that few seconds of time when they are scrolling through is a challenge.
Something that really helps overcome this challenge is the access to the direct-end-consumer. This helps me to build a persona about my customer, to really know them well and in some cases to interact with them, engage with them, asserted Priyanka.
The underlying philosophy is to be very consumer centric as you move from category to category, said Harshavardhan. Packaging for health & beauty and personal care would completely be different from staples or a hard core FMCG product. Similarly, it is very different for packaged foods. Across segments it really varies, even in the premium category when it comes to packaging. There is a huge consumer trend called ‘luxury in basics’ where people have not travelled abroad due to the pandemic, there have been no vacations, so largely with work from home culture, there have been a large part of consumer savings. A newer phenomenon is that consumers are seeking luxury in basics. For example – there is a coffee which gives you the smell of Amazon rainforest. If that is the kind of positioning of that particular product, you can imagine the kind of packaging it would undergo, because the consumers are not just keen about the product but the whole experience cycle which is during pre-purchase and post-purchase.
Digitalization also is taking this whole experience thing to the next level, informed Harshavardhan. We can see an unprecedented growth in the D2C, digital-first brands. One of the biggest growths of these brands are the differentiation in the manner they do the packaging. Packaging has got beyond just the touch & feel experience. Brands are becoming more aware about their overall sustainability footprint. For a brand it is about conveying beyond profits and beyond the product. If we can touch people in terms of their responsibility towards the planet in general, that goes much beyond in building a product. In the current day and age packaging and the product both have become equally important for consumers.
Branding & packaging differently across channels
I believe that our entire journey between the brands and consumers has certainly evolved in the past two decades – one primarily will be with the advent of modern retail and the other is the ecommerce channel that has come up in the last decade, said Harshavardhan. Food traceability and back of the pack information has become very important. People look at the back of the product before they want to pick it up. But in the last 12 months, three big pillars have really changed the way consumers look at the entire consumption cycle. Trust, hygiene and safety with a larger amount of work from home behavior is seen across the globe. There has been a large part of gender neutralization with both men and women dividing and sharing household chores. With that a new category has come up. We have often seen chopped and precut packages of fruits and vegetables which is reducing the negative labour and bringing in a better work life balance and convenience.
Food is not just about seeing consumers’ wellbeing of the body. Harshavardhan feels that consumers are seeking more, they are seeking mindfulness, a soul food. Hence, we increased consumption of organic foods. In this entire journey, when you look at it from a consumer’s lens, it has become equally important that the inside of the pack is a value addition done by the brands and organization as is the outside of the pack. While the outside of the pack has become very important for food traceability and upfront nutritional information, inside of the pack in value addition has become really important.
How do consumers view packaging?
Talking about the importance of packaging, Sukhdev said that the job is to get the consumer to the market or to the shelf or to the screen nowadays to click on your phone or laptop or on whichever system they are. The consumer not only wants to buy the product, but they want to experience the product. The experience now is no longer only limited to the products, but the entire package. Consumers want to understand the product, see how the product and the overall packaging is, how is it delivering on its value etc. Ultimately the utility and the value matter a lot.
Sukhdev also feels that self-experience comes through graphics, design, colours, shapes etc. and then the convenience too. The packaging of the product should be easy to handle while we are taking it home or while using it. Now there is an unboxing experience which has come in. When consumers order a product online and receive it, there is an eagerness or a sense of suspense about the product. You want to ensure that this is the right thing which you saw on the screen, its features, colour etc. It is true for everything that people are consuming. This is going to get a lot of traction in the future. India is still far behind in terms of the engagements, different apps, QR codes and that is again a big part of design and graphics.
How do you incorporate these graphics smartly is important, affirms Sukhdev. It should be placed appropriately on the pack as per the consumer’s convenience. It can be anything like the user’s experience review, games or even for a small feedback, where the consumer can just check out the QR code and give the feedback. This is how things have evolved.
People who are willing to experiment, they want to go ahead and learn on the go, said Sukhdev. Whatever is there, let’s go out, let’s try it out, it may fail, it may not completely meet consumers expectations, but it is fine. So, definitely we are thinking in this direction.
Has the evolution of packaging also added the costs?
Expressing his views of if the newer dimensions in packaging is also adding on to the costs, Sukhdev said that it depends on how you look at it. More than adding cost directly, its adding value. It is no longer the kind of value we were looking at earlier, it is an essential thing today. Nowadays everybody has time to write a single line review on the product online. Earlier people used to write letters and send emails to give feedback. Today you purchased the product, you go to the website and write the review. We get to know the reviews within a short span of time. Immediately we come to know whether the consumers are liking the product or not. This is more of an investment to understand and we create a connection with the consumers.
Benefits of technology in packaging
The power of digital or technology is that it helps you to bring out a product in a very short period of time, said Sudarshan. Digital can take 12 microns to 450 microns, that’s the widest range we can work upon. While going digital, you cannot have minimum orders to be manufactured. You have the liberty to change things at the 11th hour. It is a tool which can be used for test marketing, and make changes in the product even before the launch.
Usually people try to make one of the SKUs and see how it looks. But digital gives them the power to get all the SKUs ready, stated Sudarshan. Digital packaging can launch the product at the same time across geographies with different aspects. You can personalize the product before the launch. Going digital is beneficial for the track and trace as well as the design of the product.
Are private brands still a cheaper alternative?
You should not call it a private brand, you should just treat it as a brand, stated Harshavardhan. In Nature’s Basket, there are a couple of segments like Healthy Alternatives, it’s a new brand and there is something for a premium gourmet range. When you look at these products, they are being launched keeping the entire psyche of an independent brand and not that it has been launched by a big retailer. With that you open up to a very organic business stream where it has its own go to market stream strategy and you are open to expanding that product to other parts of the retail ecosystem. From that standpoint, when you say that consumers also perceive you as a cheaper alternative and that’s how we have learnt the private brands strategy from the western retail saying that you go to a shelf, put in products which are of higher gross margins where one backward integration and if something good sells buy a national brand, may be if they are not available then you will get picked. The core shift is that it is a part of a core strategy now. So, you conceptualize and introduce brands which would deliver a revolution organically and would not just add as a substitute.
Can a private brand share the same status of a mass brand?
If used smartly, packaging tends to be a big tool to educate customers about niche product categories, said Priyanka. This is something we have tried and has worked for us very recently. We are just adding a small QR code which helps customers connect as to where this product is coming from, what am I supposed to do with it now that I have brought it, it looks great, its well-priced, its well within my regular purchase budget, what do I do with this, how do I feel about this product etc. For them to really land to a place where we can explain to them that this is how the product was created, this is the idea behind bringing this to you and this is what you can and cannot do with it. For example – we recently launched Happy Chef in Big Basket which is a niche range of frozen pizzas, something that we learnt from the western retailers who have been doing it for years. One small tweak of adding a QR code in teaching the customers that this is how you can make it in your home tawas. It bridges the gap or the distance between a brand and a regular household customer.
Even if I take the example of organic brands, the communication to the customer, actually bringing the information from the back right to the front of the pack by telling them that this product is made with fair farming practices – if I am handling you a bottle of ghee then all the cows went behind this were taken care of and this is how you can see the journey, this is my farm, this is the activities that I take care of, this is the quality of milk I am using to produce the final result etc, said Priyanka. It really bridges the gap. For a customer there is no difference between a private label brand and a mass brand. When they interact on an app, all the products are placed next to each other. If my brand speaks to what they are looking for, then it tends to sway them in my direction.
Small brands v/s big brands
Pandemic has been a great silver lining in terms of the overall learning curve of the industry, affirms Harshavardhan. The major FMCG retailers are getting disrupted every single minute because of the way consumer behaviours are evolving. During the pandemic, the grocery subscription model came in. A lot of new entrants are coming in for milk deliveries, grocery deliveries and all of a large part of that business getting massively disrupted. Large retailers, big companies were really caught napping because of their large or elongated go-to market cycles and the agility largely being not there. With that, now brands and retailers have become more audacious in order to bring in newer revenue models – courtesy the access or the strength that they have seen with the rise of the D2C brands.
Experimentation is very quick on digital channels, stated Harshavardhan. You launch a product and you reach millions of consumers. Your product test market cycle is very short. The idea is to fill that piece where the market is broken and as a brand you find that there is a consumer value proposition which is the need of the hour, you try to fill that gap. The idea is to continue to build a higher competitive wall-pitch and the reliance on the larger ecosystem or the traditional retail is consistently going down, both at the brands end to be audacious to experiment and also the acceptability at consumers end and how courteous and generous the consumers have been in the last 12 months to be able to consume regional brands and local brands with equal interest as they have done for national brands.
I don’t find large brands, FMCG majors or retailers to be a part of the big change that is happening, observed Harshavardhan. Omni channel is becoming a great strategy. Irrespective of the size of the organization, people are embracing the fact that a big change is coming in. It’s the consumer demand that is driving the big change.