Facts And Figures That Hurt

January 1, 2007
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Facts and Figures That Hurt
By Peter Clarke

Editor’s Note: In our October 2006 issue, we featured a cover story on consumers’ increasing frustration with packaging functionality—better known as “wrap rage”. This month, we offer a follow-up to the original piece—a call to action and a vision of how things could be in the not-so-distant future.
Facts and figures that hurt
We all know the routine—you’ve just bought that great new gadget everyone’s talking about, and you’re thrilled to get it home. Now, how to get it out of the packaging without hurting yourself, damaging the item or blowing a fuse?
“I’m more scared of the plastic than the knife I use to open it” is the kind of comment we often hear from consumers when we’re conducting competitive design research. Everyone’s familiar with the problem, but what’s being done about it? The short answer is: not a lot.
But that’s about to change. Every day, across the world, millions of consumers face the physical and emotional challenge of so-called wrap rage. Each month in 2004, more than 5,500 British consumers visited hospital emergency rooms to be treated for injuries inflicted by stubborn packaging.
We don’t track such data yet in this country, but we do record a related, equally astonishing, statistic: in 2005, on average, every person in the United States between the ages of 18 and 64 stole more than $160 worth of products from retailers. The figure is staggering: in just 12 months, $29.9 billion was lost as a direct result of what’s oh-so-delicately referred to as “shrinkage”—shoplifting by consumers and retail employees.
What’s the relationship between packaging that’s impossible to open and retail theft? It’s a story of opposing interests.
A tug-of-war between three teams
Retailers, brand owners and consumers each have widely differing goals and conflicting motives.
For retailers it’s about self-merchandising, maximized real estate and velocity. They want packaging that offers high product visibility, that is easy to handle by staff and that works with existing display systems and technologies. Of course, retailers also want packaging that’s pilfer-resistant—and they often flex their muscle and demand it from their manufacturing suppliers.
Brand owners, however, are more concerned with communicating the values and delight associated with their brands—think of all those ad dollars they don’t want to see wasted. Brands want consumers to enjoy the whole experience, from initial impact through to the rewarding experience of unveiling their new purchase. Yet this huge investment can be destroyed in just a moment if the product is inaccessible to consumers through retailer-imposed difficult-to-open packaging.
Ironically, while the focus of both retailers and brand owners is on consumers, it is consumers who are often ignored. They want a simple, safe and easy packaging experience, with minimum effort and negligible waste. At the same time, consumers want their item to be packaged securely so as to be untouched by other shoppers before they get it home.
In an industry driven so hard by competition, retailers and brand owners can’t go on ignoring the obvious: the situation is worsening. Now, too, the voice of the consumer can be heard loudly complaining across a multitude of media and online channels. So where to start tackling the crisis?
Whose team can pull the strongest?
We believe the evidence points toward retailers taking the lead to drive much-needed change. While brand owners must always control the consumer’s experience of handling and opening the box, the retailer ultimately controls consumers—manipulating their behavior in-store and defining their physical space. Until a radical new business model arrives, the seller has the upper hand.
This doesn’t mean brands should passively surrender to strategies forced on them by shortsighted retail companies. Instead, they need to be realistic about the opportunity to solve the theft problem while simultaneously building consumer support for their brand.
Changing the game…
The smartest brand owners will accompany retailers on this journey of change. New harmonious partnerships will enable those that take the lead on this issue to set themselves apart and generate strong competitive advantage.
The silver lining of wrap rage is that it can spark an opportunity to reinforce the expanding role that packaging plays in building brand success.
At the grassroots level, the nature of the challenge means addressing issues of material choice, packaging types and manufacturing processes. Some simple, first-step tools for tackling the problem already exist but are frequently overlooked.
An easy-to-access toolbox
An appropriate starting point is the concept of universal design. For packaging this is a no-frills idea with strong advocacy in Europe, and it’s gathering speed in the United States. Simply put, it’s the business of ensuring packaging is easy to access for everyone—both young and old, regardless of ability. The approach advocates clear diagrams and easy-to-read instructions, visually intuitive points of entry and ergonomic handling characteristics. A universal design strategy also avoids the need for consumers to exhibit excessive strength or to require secondary tools to open the packaging, and it culminates with easy disposal or recycling.
Some categories find such goals easier to achieve than others. In pharmaceuticals, for instance, there are contradictory design criteria for packaging—the goal is to keep children out, but to provide the elderly with easy access. Here, too, universal design can help resolve these seemingly opposing requirements.
Rather than putting what many believe to be too strong of a focus on packaging, retailers can take a stronger stand with better theft-prevention technologies. Used in isolation, most technologies, however innovative, can be ineffective and they can sometimes even exacerbate the problem. How many times have you—together with equally confused store staff—ignored the ear-splitting false alarm at the store’s exit gate?
But appropriate technologies can work when they are integrated into a comprehensive system that is built on strong operational procedures. For the retailer, the first step is staffing and training, followed perhaps by versions of Electronic Article Surveillance or miniaturized wireless visual recording systems. Developments in point-of-sale interface technologies such as fingerprint recognition and electronic wallets are also advancing quickly; when integrated with packaging and retail display systems, these technologies can progress from the war on fraud to the battle against theft. In Asia, municipal business partnerships are already using unique verification and transaction technologies that could be relevant to the problem of theft faced by U.S. retailers.
There’s also RFID. Analysts forecast that RFID item-level tagging will come down to a fraction of one cent per item by 2012, making it cost effective for use on a single can of soda, bag of chips and other low-cost consumer goods. RFID at the case and pallet level has already provided the big retailers with logistical efficiencies, but, so far, it provides little direct benefit to the brand owners supplying those stores—or to consumers, for that matter. And, still to be solved is the problem of how to integrate the tracking capability of RFID as a deterrent against theft in the retail space.
And to wrap up, our vision…
We envision a landscape of self-merchandising systems where you can see, touch, compare and even try that great new thing you’ve read about before you decide to buy it; and of places where packaged products have great visual impact and truly communicate the brand’s values—and, oh yes, where you can have the item you’re actually handling. You pay for it right there with a swipe of your cell phone. The product you’ve bought is economically packaged and, when you open it, it offers a rewarding experience. To top it off you have the satisfaction of discarding the biodegradable packaging, knowing you’re not adding more trash to the overburdened planet. We envision a landscape where brands will be able to seize every opportunity to create consumer delight and build loyalty. But…the time to act is now.
The author, Peter Clarke is president and founder of Product Ventures, a packaging and product design and development agency. Contact Peter at 203.319.1119 or pclarke@pvldesign.com

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