Digital Packaging A Recession-Proof Market Opportunity

Transcription

1 May 6, 2009 Analysis Digital Packaging A Recession-Proof Market Opportunity Authors Barb Pellow Published by Business Development Strategies Consulting Service Jetting Technology Opportunities Consulting Service Abstract Many of today s businesses are rethinking how they allocate their budgets, particularly where advertising is concerned. At the same time, however, advertising comes in many forms. Savvy marketers are exploring ways to leverage product packaging so they can enhance their communication with consumers. This document provides a brief overview of the benefits that effective packaging can provide and the role of digital printing. It cites specific examples from companies like Kiss My Face, Info Label Inc., and McDonald s InfoTrends, Inc. For More Information If you would like to order extra copies of this report, receive permission to use any part of the report, or be informed of upcoming market updates, reports, and related projects, please us at info@infotrends.com. Headquarters: Europe: Asia: 97 Libbey Industrial Parkway 3 rd Floor, Sceptre House Hiroo Office Building Suite Castle Street Hiroo, Shibuya-ku Weymouth, MA Luton, Bedfordshire Tokyo United States United Kingdom, LU1 3AJ Japan info@infotrends.com euro.info@infotrends.com info@infotrends.co.jp

2 Table of Contents Introduction... 2 The Benefits of Effective Packaging... 2 A Win/Win Situation for Marketers and Label Converters... 3 It s Time to Re-Examine the Digital Packaging Opportunity!... 4 Packages Can Blend with Mobile Technology... 5 The Package The Ultimate Recession-Proof Digital Document... 5 Introduction Many of today s businesses are rethinking how they allocate their budgets, particularly where advertising is concerned. In fact, people typically tighten their wallets during an economic downturn, which means spending less on advertising. At the same time, however, advertising comes in many forms and media methods. More than ever, marketers are exploring ways to leverage the physical package to enhance their communication with consumers. Even in today s economic climate, shopping remains a favorite pastime for many. With today s youth plugged in and online, though, the advertising world that we have known is coming to an end. Nevertheless, consumerism and, with it, the need to attract and engage buyers at the point of purchase continues to flourish. The Benefits of Effective Packaging Marketers may begin shifting more of their advertising budgets to packaging investments. For some companies, consumer packaging may be the only opportunity to really reach their audience. The package or label on the product s container can be just as important as, or even more so than, the contents. Since the package is the first thing that a customer will see, it offers a tremendous opportunity to engage a prospective buyer. The bottom line is that effective packaging can generate much more than a return on investment. I had the opportunity to moderate a Webinar with Lewis Goldstein (Vice President of Marketing at Kiss My Face) and Rosemary Joralemon (Director of Sales & Marketing for Info Label, Inc.) to discuss the changing dynamics in packaging that are largely being driven by digital technology. Kiss My Face is an all-natural body care company that is no newcomer to the recent explosion of green products. The brainchild of two long-time vegetarians searching for healthy body care products, Kiss My Face was founded on a 200-acre organic farm in New York's Hudson River Valley. It is still located in the Hudson Valley today, operating out of a former feed store and converted barn. Featuring moisturizers, liquid soaps, shower gels, toothpastes, shaving products, and deodorants, Kiss My Face offers a wide range of products that are designed to be effective and good for the consumer. According to Lewis Goldstein, Kiss My Face has over 200 SKUs of natural and organic body care products. We make everything from head to toe with a few stops in between InfoTrends, Inc.

3 As the brand owner, Goldstein is very focused on packaging that works and digital printing provided the answer. I need bright and vibrant colors, he stated. Our package and labeling does most of the work to attract attention to our independent, natural, and organic image due to our limited advertising budget. We also need the ability to change labels quickly, easily, and without high costs because formulations are continually changing. Some of our 200 SKUs change twice yearly. Digital short run technology enables our entrepreneurial organization to quickly and nimbly make the changes we need to make, when we need to make them, and in the quantities we require. We play in a dynamic category, and digital technology gives us the edge we need to beat the competition. Figure 1: Kiss My Face Product Selection A Win/Win Situation for Marketers and Label Converters Based on these requirements, Kiss My Face turned to Ilana Weiss, its label consultant from Label Solutions. Weiss referred Kiss My Face to New York-based Info Label, Inc. to provide label and packaging support. Info Label specializes in pressure-sensitive labels for personal care products, household chemicals, beverages, gourmet food, and premium private labels. From a technology perspective, Info Label utilizes a combination of rotary screen/uv flexo/hot stamp presses and a Hewlett- Packard ws4500 Indigo Digital Press HP digital press. The company also recently installed an HP Indigo ws6000 Digital Press. Info Label s digital finishing capabilities include rotary hot stamp, varnishing, lamination, and rotary die-cutting. According to Rosemary Joralemon, We target existing flexo customers with growing businesses. We offer digital as an outstanding, cost-effective or cost-saving option for mockups and prototypes, new product launches or pilots, seasonal SKUs or products, or everyday product decoration. As our customers businesses grow, we can transition their labels from the ws4500 to the ws6000 or to a flexo press, according to their needs. Joralemon went on to say that the value proposition for digital is clear. There is no plate cost, which is a huge plus for start-up companies or new and unproven product lines. Digital InfoTrends, Inc.

4 technology enables good quality, lower minimums for the customer, and improved cash flow. The customer can print what they want, when they want it, and in the exact quantity required. Finally, there is substantially less start-up waste. It is 50 feet versus 1,500 feet for flexo printing for our six-color work. Beyond the benefit for customers, Info Label sees tremendous opportunity for its own company. According to Joralemon, digital accounts for 50% of our business today and that share is growing. Even more importantly, packaging is proving to be recession-proof for us. In 2008, our digital business increased 100% over In 2009, we anticipate 100% growth over It s Time to Re-Examine the Digital Packaging Opportunity! Today, the cost-effective conversion of short-run packaging is giving end-user companies a chance to separate themselves from their competitors through custom designs at more affordable prices. People have begun to see the value in short-run packaging. Today s technologies enable people to create multiple versions and customize, but there is more. Today s savvy marketers are exploring ways to transform the package into the ultimate multi-channel document. For example, Nestlé wanted to reinforce its Drumstick brand name during the 2008 baseball season. The company approached Atlanta-based Digital Printing and Imaging (DPI) for help. A baseball card offer appeared on every package of vanilla Drumsticks in the U.S. from April through December Using its digital color technology, DPI produced more than 3 million personalized youth-league baseball cards in an innovative sports-themed promotion with Nestlé Drumstick brand sundae cones. Through the program, consumers could visit a DPI-developed Web site, upload an image, enter a youth's team name and player statistics, view a PDF proof, and then order a pack of 16 cards. DPI and Nestle saw the benefits of a multi-channel approach for brand reinforcement they used a printed offer on a package, an Internet site, and a baseball card to deliver lasting memories for the recipient. More importantly, in an environment where Nestlé is competing for shelf space in grocery stores, the company now has access to consumer names, addresses, and mailing addresses. This means that the firm can market directly to the consumer and forward them coupons for not just Drumsticks, but other Nestlé products, as well. Figure 2: Nestle Drumstick Promotional Packaging InfoTrends, Inc.

5 Packages Can Blend with Mobile Technology A new QR Code on McDonalds packaging allows consumers to pull up nutritional information on their camera phones. QR codes for McDonald s are currently being rolled out in Japan. Similar to bar codes, QR codes are printed codes that can be scanned by many mobile phones with embedded cameras. All sorts of information can be packed into these little codes, including the company s Web site, the amount of calories and fat in a Big Mac, or a company s contact information on a business card. Scanning the QR Code on any of 19 sandwiches, 8 sides, and 5 salads from McDonald s brings up a URL that takes customers to the nutritional information for the food they are eating. Customers will be able to view the amount of calories in their meal, as well as the amount of sodium, fat, protein, and carbohydrates. Information is available for individual items as well as meals. Customers can also obtain allergy information (although this may come a little too late since you will only have access to it after you have purchased your meal!). The possibilities are endless when marketers assess how to integrate QR codes with packaging they can provide links to coupons to expand the share of a customer s wallet or engage consumers in dialogue to learn about their buying preferences. The Package The Ultimate Recession-Proof Digital Document In a challenging economy, print service providers and marketers must re-examine digital packaging. Label and package printing grows with the human population and economic development, and it will not be replaced by electronic documents. Most importantly, though, it has marketing space that can be leveraged to expand customer relationships. Personalized URLs and QR codes can be combined on packages, making them into much more than product containers. These digital packages can become the ultimate mechanism to build a multi-channel relationship with consumers. This material is prepared specifically for clients of InfoTrends, Inc. The opinions expressed represent our interpretation and analysis of information generally available to the public or released by responsible individuals in the subject companies. We believe that the sources of information on which our material is based are reliable and we have applied our best professional judgment to the data obtained InfoTrends, Inc.