Summary

Shopper Centric and easy to process instore.

Easier said than done when stakeholders in the supply chain respond to very different requirements, each with a limited span of control. Conflicting interests between trading partners do not help. A manufacturer may find instore execution is a retailer's problem. Trade marketeers often get told ‘too expensive', 'cannot run on the line' or ‘does not fit the 'SKU reduction strategy'. So either leave it or fix something out of the marketing budget, which often involves a costly and time consuming repack operation.

Retail packaging is a virtual reality.  Except for the occasional floor display, it does not exist as a physical solution dedicated to the instore process. Retail packaging refers to number of specific and unique functions that are only relevant at the point of sale. A significant transition in units, communication and functionality takes place. The combined set of distribution and product packaging must facilitate an efficient transition, and provide the retail related functions in between.

And increasing focus on shopper marketing and instore efficiency underlines the relevance of packaging for a profitable grocery business. Ever more complex for a number of reasons, but even more important to get it right:

• Inflation: a highly competitive and crowded landscape
• Innovation: packs and products get smaller less stable to merchandise or stack
• Channels: retailers operate different channels each with their own packaging needs

Key to success: the Transition Toolbox

Designing a new pack for every occasion is too costly and time consuming. There are better ways. Most retail solutions make use of the same materials and technology, only in varying combinations. The Toolbox approach put the emphasis on application management: a good set of basic designs and technologies must cover a wide range of possible solutions making use of the same infrastructure. 

Next to filling the toolbox with the right set of options is just one side of the medal. The other side is craftsmanship: the ability to put it to use and serve the market with aadequate solutions. This will not happen overnight but requires commercial and supply chain disciplines to develop the skills and integrate packaging management in their routines. Getting to that stage will not happen overnight.

Business implications are best reflected by a balanced scorecard. The mix of financial, customer related and business process elements are linked to continuous improvement, learning and growth. The wider strategic and organisational impact exceeds, but does not replace, the design or manufacturing challenge. On the contrary, it provides a valuable framework that adds to profitable packaging strategies.

At least 3 critical areas must be resolved in order to succeed:

• Organise ownership: who is responsible for the overall busines impact? Being cross-functional packaing is a driver of collaboration.
• Redefine packaging efficiency: costs & benefits associated with packaging; distribution in the value chain.
• Devise a business process: detach design, development and investments. Dynamic application management must become daily business.

A leadership challenge

 Implementing retail packaging as a commercial strategy and a business process will not succeed without proper management support. Companies must devise a manufacturing and distribution infrastructure to efficiently process a variety of executions for similar products. 

Successful retail packaging does not stem from a single creative design, but starts with vision and the strategic decision to make a sustainable and lasting difference.

In short: leadership.