Driving Competitive Advantage Through Packaging Innovation: Part 2

Part 2: Making the Case for Packaging Innovation

Functional innovations can add value and help differentiate a product, while branding elements can help a product break through on the shelf and communicate the brand’s equity. Packaging is, after all, an important mode of advertising at the point of purchase.

In this post, we’ll dive in a little deeper on the innovation process and how to identify packaging innovation opportunities.

It’s a Team Effort

Packaging innovation cannot be dictated by the marketing department alone. Whether the innovation is being driven through some internal edict or through identification of a consumer need, ideation should include cross-functional teams including marketing, engineering / design, R&D and supply chain.

These cross functional teams do the math on feasibility, cost, product quality and supply chain impacts. Those ideas which meet hurdles across functions can be moved into concept development. Not having cross-functional involvement risks moving down an expensive path toward development only to realize later that the idea is not feasible or would create more additional cost than worth the benefits.

With the cross-functional team approach in mind, the typical innovation process starts with identifying an opportunity, ideating on solutions, concept development, concept testing and optimization. In this post we’ll talk about the process through concept development.

Identifying Opportunities

Sometimes packaging innovation work is driven by internal forces. For instance, increasing materials costs may spur a company to find a cheaper alternative. Product degradation issues over its shelf life may force a company to rethink its current packaging to maintain freshness longer. Opportunities to optimize the supply chain could also suggest cost-savings benefits for making packaging changes.

But most packaging innovation initiatives are driven by consumer insights. Marketers may identify a consumer need or an opportunity to strengthen a product’s / brand’s equity. This discovery is often exploratory in nature and, as such, several qualitative methods are very popular. Here are a few of the most effective:

Social Media Listening:

Monitoring conversations around your product and category is becoming a common way to understand consumer satisfaction with your product and uncover any areas that cause frustration. Similarly, by monitoring the category in general you can gain insight into features the competition has that are perceived as advantages over your product.

Obviously, there is no guarantee that consumers are discussing your packaging on social media – but it is worthwhile to monitor these conversations as part of keeping a pulse of overall brand health, and to look for clues on potential innovation opportunities.

Ethnography: Ethnographies are a great method to use for discovery. It involves observing the consumer interacting with the package in its natural environment, without the bias of a researcher leading the interaction. This often helps uncover any issues the consumer has as well as any remedies or solutions they naturally come up with in order to overcome those issues. The observer can interject to ask questions to clarify the reasoning behind the respondent’s actions, but otherwise allow the interaction to evolve organically.

Packaging World recently published an interesting article detailing how Medtronic used ethnographic research to develop new packaging for one of their medical device products. It does a great job detailing how observing surgeons in the operating room helped their packaging team discover ways to improve their packaging by reducing some of its components, making it easier to use and reducing materials costs.

Mystery Shopping / Intercept: Mystery shopping is a type of observational research, but limited to in-store interaction. The researcher observes the consumer as they shop the category, interact with various options and chooses a product to purchase (or decide not to purchase a product). As the consumer leaves the aisle, the researcher can stop the shopper and ask questions about why the specific product was chosen, what other products they noticed, whether any were considered and why they were not chosen.

Ideation and Concept Development

Ideation can take many forms. It can be an internal process or moderated and facilitated by an external vendor, who is skilled at using a variety of techniques to stimulate ideation. In addition to the core cross-functional team, non-stakeholder creative thinkers are sometimes added to the team to help stimulate outside-the-box thinking. It is generally helpful at this stage to come up with many ideas and to think broadly.

Once you’ve ideated on solutions, it is time to conceptualize how these ideas could be executed. At this stage some ideas will likely fall out as infeasible, others may merge together.

Agile principles and iterative design are increasingly being used in innovation, and focus groups help facilitate this approach to designing new products and packaging. Respondents can physically interact with newly developed prototypes to identify strengths and weaknesses and build on ways to improve or adjust designs. This is also a great way to understand whether innovations being driven by internal forces (as opposed to a consumer need) have the potential to have a negative impact on consumers’ experience.

Obviously, some packaging innovations are more radical than others. Changing a few branding elements in order to stand out on the shelf more poses little risk to the supply chain, for instance, while changing from steel cans to tera-packs has implications across all functions. As such, the process may require varying levels of scrutiny and rigor during the ideation and development stage.

However, any change in packaging is done with some ultimate goal in mind, whether it be to save costs, increase sales or improve equity. Therefore, it is important to quantify the potential impact of your packaging change with consumers prior to making the change. Depending on the innovation goal, this might include concept testing, shelf tests or product testing. Our final post in the series will describe why and how to execute each of these methods.

Miss Part 1? Read it here!