If one were to conduct a SWOT analysis of the packaging industry, the power of effective branding and on-pack promotions to engage consumers would be listed as a key strength. With the biggest brands in the world investing huge sums in packaging in order to boost sales, the health of the industry should be assured.
By contrast, environmental concerns would hover somewhere between a weakness and a threat. While innovative packaging solutions have gone a long way in addressing consumer concerns about environmental issues, there can't be room for complacency. A particular threat exists for those brands that send promotionally packaged stock to landfill once a promotion ends.
Meanwhile, the discount channel – which includes retailers such as Aldi, Lidl and high street pound stores – would rank as a growing opportunity, empowering packaging professionals to realise their strength for engaging consumers via on-pack promotions and redesigns, while simultaneously addressing environmental concerns around sending waste to landfill.
Brands are increasingly recognising that they can avoid using landfill sites by placing promotionally packaged or discontinued items into the discount channel and boost sales, without harming brand equity. Moreover, for those forward-thinking companies engaging with the channel in a strategic, rather than tactical, way, discount isn't just an insurance policy that allows companies to make the best of a bad situation, but a powerful way to recruit new consumers, with Procter & Gamble research showing that 15 per cent of people who try a brand at a discount retailer go on to purchase the same brand at full price in the future.
Whether it's redesigned packs to achieve on shelf cut-through or on-pack promotions linked to sporting events or seasons, packaging innovation has long been central to engaging consumers and driving sales. Developments in discount can help to ensure this creativity is properly realised.
James Russell is commercial director at discount channel specialist Rowan.