It has been acknowledged for some time that consumers make as many as 70% of their buying decisions in the store. What is becoming increasingly clear is that they are faced with a seemingly endless number of choices within each product category.
A recent article in the Wall Street Journal titled “Consumer-Goods Firms Duel for Shelf Space” indicates that, in many superstores, consumers face up to 100,000 different items to choose from. And, as is often the case in the big box stores, they are often navigating the aisles alone with little offer of assistance or guidance from in-store sales personnel.
So what does this mean to the brand owner, who is not only fighting for the hearts and minds of the consumer but also for the increasingly limited amount of space on the retailer’s shelf?
According to the WSJ article, one approach has been increased spending on in-store promotions, which accounted for 17.4% of sales last year, up from 14% in 1999. In fact, 56% of salty snacks and 75% of carbonated beverages were sold on promotion last year in the US, according to Bain & Co.
These promotions have included the tried and true: buy-one-get-one-free offers, coupons and free samples. But many have attempted the more elaborate, such as Unilever, which launched its Axe body spray by placing armies of female perfume models in Wal-Mart and Costco stores to tempt male shoppers. Customers responded and bumped the product’s global sales growth rate to 22% in the first half of this year compared to the same period in 2003.
A look at this trend begs the question, what is the role of packaging in this increasingly competitive marketplace? As retailers demand more for valuable shelf real estate, and as private label and specialty products widen the field and raise the level of competition, what will be the impact on packaging?
These are questions that must be answered and issues that must be addressed, and that is why we’ve chosen to dedicate our third annual Packaging That Sells Conference to this very topic. “Capturing Consumers’ Hearts and Minds Through Packaging: Packaging That Sells III” will be held at The Drake Hotel in Chicago June 22-23, 2005. I invite and encourage all of our readers to attend.
Jennifer Acevedo, Editor-in Chief
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