Private Labels & the Increased Importance of Proper Packaging

Private labels are still growing fast and nonetheless have a great growth potential, after all these years. And private labels will be using the leverage to get there. Why not? Only upsides. 

Keep Calm 2PL success is obviously scattered both by geography and by category. In Europe the UK and Switzerland are often mentioned as the mature PL markets averaging around 50% in a supermarket. This can be compared to shares below 20% in markets like Italy and the US.

Private label products are said to be available in 9 out of 10 FMCG categories and average on a price point 30% below national brands. This is a serious challenge for any brand owner. The recent economic downturn has also further driven the demand for PL and retailers are building strong brands that are changing the balance in the eco system.

Brand owners are meeting the threat with all they have got. But my view is that few are to the full using the most powerful weapon available at POS – the primary packaging.

Use the packaging as the superb marketing tool it is. Invest in strategic packaging design, think through what you want to communicate.  Put in a budget for developing increased packaging functionality. Add value to the product with a pack that is easier to open, re-close, pour from, store, dispose of, etc.

Make it easier for the consumer to determine the difference between products, use the packaging! It works.

2D barcodes today?

2D barcodes are surprisingly underutilised.

The technology has been available for many years, it is low cost and has a fantastic potential. Innovators can let their creativity loose and do anything they like of it, really.

Maybe it’s in the name, 2D barcode, which might be misleading. It’s not a barcode in the traditional meaning. A barcode gives you the code for the SKU in question, no more. A 2D barcode is made up of patterns of squares, dots, hexagons and other geometric patterns rather than the stripes, or bars of 1D barcodes. A 2D barcode is a graphical image that stores information both horizontally and vertically (two dimensions) and can store up to 7,089 characters.

But that is just the beginning, with the use of a smart mobile phone they enable fast data access. You, as a consumer, simply scan or take a picture of the 2D barcode on the product label or similar and it will interpret the pattern to an encoded URL, which directs the browser to a linked web site.

With that all possibilities open up. With a 2D code on your package you can simply convey more information on the product in question. A label is normally a far too small space when you have a lot to say, as any brand manager would agree on. You can talk about the product in question, other products in your range or coming products, etc.

You can also use the opportunity to market your product in other places inside or outside the store, on billboards, TV commercials, anywhere really. You can direct customers to a web site for further information, provide a coupon, directions to a store or events. You can engage people in interactive games and really lead them to any desired place.

There is a big potential in the use of 2D at point of sales to build a closer relationship to your customers. But the marketing opportunities are endless.