- THE MAGAZINE
- VERTICAL MARKETS
In an executive survey of 132 consumer packaging goods’ manufacturers and retailers, 88.6% expect their company’s sales in the warehouse club channel to increase in the next three years, according to a January 2013 report from market research company Deloitte LLP. The confidence likely stems from the observations of recent history, as 84.6% of those same executives say they’ve seen an increase in the importance of the channel over the past three years.
The growth of the warehouse channel has, not surprisingly, spurred an increased interest in club ready packaging strategy. Robert Parvis, director of packaging for leading membership warehouse club Sam’s Club, a division of Wal-Mart Stores, Inc., notes a “shift where club store packaging is a focus area, rather than an afterthought.” He adds, “Club packaging has often been just a multi-pack of what’s available in other retail outlets, but more and more suppliers are designing packaging with the club store in mind.”
In a club store setting, personnel often drop a pallet into place on the store floor, merely unwrapping shrink film or taking other basic measures before product is saleable to the consumer. This streamlined operation translates into cost savings for the retailer, as well as the consumer. It also significantly impacts packaging strategies, requiring packaging to simultaneously play important functional and branding roles.
“Club stores run on a source, ship and sell approach and invest in solutions that may seem simpler than the point-of-purchase dressings one might find in a grocery store setting,” says Tracy Wolf, vice president of sales for Innovative Plastech, Inc., a custom thermoformer of plastic products. The proliferation of high volume containers and multi-packs further “require highly functional secondary packaging- packaging that must ship, store and sell product,” he adds.
Part of club store packaging function includes handling the “rigors of shipping without the benefit of other protection,” adds Mike Schliesmann, senior vice president, business unit manager for Great Northern Corp., a designer, manufacturer and distributor of packaging and point-of-sale display programs.
Packaging must also aid in warehouse operations, which is why it can include additional functional elements such as strong color coding, UPC barcodes on multiple sides, and trays designed to keep packages straight and faced out, says Dale Casto, president of packaging design firm Wright Design, Inc., which focuses on club store design.
In addition to decidedly functional roles, packaging must still drive sales. A club store setting can also impact the way items are aesthetically designed. For example, “Packaging in a club store must contend with lighting conditions that are darker than a supermarket. The poorer lighting creates the need for brighter packaging, with simpler text and graphics,” says Casto. He adds that since products are often sold on a pallet, the tray design in a club store is particularly important, noting that it is often “a more important communications vehicle than the [primary] package.”
At Sam’s Club, when it comes to packaging “there are basic, non-negotiable requirements related to safety, performance and sustainability that must be met, but too often I see packaging development work that stops once these fundamentals are met,” says Parvis. “I expect all Sam’s Club packaging to be thoughtfully designed. Each item can have different needs, but when the packaging developers have the supply chain, club store, and our members in mind, we hit a sweet spot.”
Rather than a one-size-fits-all approach, Parvis says thoughtful design can result in dramatically different packaging across product categories. For example, he says a price sensitive item should be optimized to drive value; a new and exciting item should utilize innovation and clear marketing to grab attention; while an item used primarily by small businesses will have different packaging needs than an item used by a household customer.
When done well, strategically designed and executed club packaging drives sales. It held true for the Welch’s brand, who tapped the expertise of Wright Design in its tray and pallet design for grape juice beverages. Wright Design designed the pallet so that every tray and case merged into a “single, powerful billboard design.” According to Casto, it resulted in clinching the number one fruit juice SKU ranking at Sam’s Club.
Many brands are seeing the marketing potential of club ready packaging. Schliesmann of Great Northern Corporation has noted a strong push for “increased graphics and better appearance of the packaging used,” a trend continuing from previous years. “The packaging needs to be the selling instrument, not just the device to get it to arrive in one piece,” he adds.
Brands take different approaches on how to best showcase products. While some focus on tray graphics, others choose to minimize the look of the tray in order to showboat the primary package design.
Wolf of Innovative Plastech, Inc. has increasingly observed “high investment in bottle and can designs by beverage manufacturers.” In order to maximize viewing potential, Innovative Plastech, Inc. has unveiled its Sell Stack, a clear rPET pallet tray providing “the necessary functionality of bulk beverage packaging while preserving the consumer’s line of sight to the appeal of bottles, cans and any other primary containers,” he adds.
No matter the final packaging concept, sustainable design is a major trend in club store packaging. Often the way to increase sustainability is to reduce packaging material.
“It usually relates to reducing materials needed in the package, while still maintaining the requirements for the package to arrive in one piece,” says Schliesmann. As a solution, Great Northern Corporation offers StrataGraph laminated paperboard options, which merge high-quality graphic capabilities with an in-line web process. StrataGraph is positioned as a sustainable option because “we have the ability to develop products that use only enough material to meet the stacking strength needs of the product and not over-package,” adds Schliesmann.
Sustainability and cost savings have been important to Sam’s Club for many years, says Parvis, but Parvis sees packaging projects extending beyond initial measures today and in the future. “Sustainability projects have additional benefits to our members through things like ease of recycling or improved functionality in the home. Cost savings projects also improve the way product displays in the club or reduce damages in the network.”
Tools are available to help suppliers create better club ready packaging. For example, Sam’s Club has launched ISTA 6-samsclub, an ISTA protocol that simulates the Sam’s Club network. Parvis adds, “We use this tool daily with our supplier partners to evaluate new designs and ensure safety and performance. The Sam’s Club packaging standards are available to all of our product suppliers to provide an overview of key technical requirements.”