Imagine the following true story: John decided to stop at Walgreens on his way back from an appointment to pick up a prescription, some cold medicine and a few chocolate bags for office treats. He immediately went to the cold medicine section after receiving his prescription and checked for NyQuil, a drug he has used and trusted for a long time. Instead he continued to the candy aisle, where he spent a few minutes perusing hundreds of various candy packets. He was in search of liquorice and had found some options. Many were wrapped in a clear plastic container, adhering to the rim with a paper header.
Then he saw something different; a package of sweets not in translucent plastic, but in a strong package with decorative colour. The logo was appealing and the rest of the products clearly stood out. Purchased three bags. His decision was solely based on the packaging of the product; he did not know or even recall the brand name. John’s experience demonstrates how important packaging is for retail sales.Do you want to learn more? Visit Bonuses
Let’s look at the choices John has made. There are several decisions which need to be made when someone goes shopping: 1. The store; the place where I go shopping. 2. Your needs; what I need, or would like to buy. 3. Product differentiators; what criteria (brand, price, etc.) will be used to choose the product. In the case of John, the decision to shop was predetermined, his prescription was at Walgreens. He had brand loyalty to NyQuil Cold Medicine from Vick; he hadn’t even looked at alternatives. Yet nothing had been decided on his buying of candy. He had a preference for licorice, but had no preference for the brand. His option of buying candy was based on what he saw in the shelves. In the end he made his decision based on being drawn to a kind of product packaging.
Savvy private brand sellers acknowledge packaging plays a vital role in retail success. They know how to leverage their advantages over brands that are nationally recognized. Brand loyalty aren’t always a buying factor. In fact, according to a study by Retail Minded, between the ages of 19 and 30 100 female consumers voted 71 per cent in favor of store loyalty versus brand. Understanding this trend in retail store loyalty gives the private labeler an opportunity to adjust its marketing strategy.
Wal-Mart is a prime example of a predominantly customer loyalty shop. Private label products have made gigantic inroads into Wal-Mart over the last two decades. Retail shelving space competition at Wal-Mart is tremendous and Wal-Mart ‘s shelf location decision is based on sales in the main. When the product sells, Wal-Mart will give you favorable shelf space, otherwise you will be given less favorable areas. The effect may be catastrophic for the success of your company.
With the recent economic downturn, retail market share for private label goods has been increasing. For cost reasons customers are more likely to deviate from their preferred brands. Consumer perception is that mark products are more expensive than private label products. With retailers keen to improve their lagging profits, the possibility of better shelf space being offered to private brand labels is growing. Profiting from this phenomenon will require manufacturers to revamp their packaging.