VALUE ADDED PACKAGING (VAP) – A BOOORING ACRONYM

Blog | by Norman Kay | 10.03.2017

At a recent conference I was asked if the time, incremental cost and effort invested in value-added packaging (VAP) is of consequential value. I answered with a question; “value to whom”; the consumer, retailer or the marketer?”
What does value mean anyway? Much of the VAP out there is as boring as this acronym.
I haven’t checked with Wiki, but essentially it refers to the nature of a package; be it spirits, fragrance, cosmetics, or any luxe brand that projects an enhanced perception or bonus beyond the everyday retail offering. The definition is as varied as the budgets and margins within consumer product categories, and the term is usually applied to premium, super-premium, or ultra-premium offerings.

 

Value-added packaging, if that’s what you wish to call it, is about injecting energy and fostering Equity in your brand; igniting momentum and supporting organic growth. It is an investment in one of the many segments of your brand strategy. It is not about building volume or case count during a particular promotional period.

 

The package becomes an exclusive bit of parking space on the shelf, creating an environment surrounding and amplifying premiumness.
Luxury brand teams have larger funding to support their image with upscale materials, molded hi-touch plastics, wood, leather and fabrics. The value-added packaging world also includes branded giftware accompanying the product.
With a few remarkable exceptions, we look upon a sea of sameness in the retail environment.
Consumers try to decipher from an array of competitive options, private labeling, and an indistinguishable number of skus, within, above and below tier in all categories.

 

WHAT’S COMPELLING HERE?
46% of the $66 billion retail revenue (data will vary) “occurs” during holiday and summer promotional periods; the prime occasions for gatherings, parties and celebrations with large groups of potential brand advocates.
The point of sale is the culminating site of all prior brand building activity on the shoppers’ path to purchase: print media > cable > streaming > social > PR > and events – The penultimate opportunity to retain and accrete brand equity.
Our lifestyle, especially during holiday, pressures the consumer to make spontaneous decisions. Our sensory filters contract; less gets through, and it takes an extraordinary image to trigger attention with online e-tail gobbling sales Pac-man style.
Therefore, gift packaging at brick & mortar is an essential, logical, fast, holiday / summer gift location for the impulsive shopper.

 

Here stands the final battle for brand loyalty: creating it, reinforcing it, retaining it and vying for cross-over share from your competition.

 

SUMMONING A SUPERIOR ACRONYM: BĒP– THE BRAND EQUITY PACKAGE:
1. Reward your loyal advocates who have been purchasing the basic product throughout the year.
2. Create incremental facings and table space at retail with innovative, exciting product offerings.
3. Amplify brand equity, generate brand awareness, and encourage cross-over from your competitors’ share.

 

THE ESSENTIALS FOR A BRAND EQUITY PACKAGE:

  • The pieces and senses must play in harmony.
  • The brand’s persona must be executed as real, believable and authentic; conveying ‘premium’.
  • Engaging the shoppers’ eye during that critical 4 seconds.
  • Conveying an emotionally engaging experience within a very crowded environment, amplifying your distinct presence.
  • Seeking distinctiveness, style and a separation from the undifferentiated “others”.

QUESTIONS TO ASK YOURSELF:

  • Will your brand and your company lose share, loyalty, equity, and momentum by not participating aggressively in the competition?
  • Does the Brand Equity Packaging convey your company’s depth of conviction and the value it places on its product?
  • What is it about your presentation that stands out and upstages the competition to the right and left?
  • How does this BĒP inspire your advocates, and to what extent is it attracting your competitor’s franchise?
  • Does it fortify your story and work in lock step with the energy your team has invested in every component of the marketing endeavor?
  • How do you successfully execute this final touch point within your product’s unique voice, with phenomenal impact, brand recognition, and instant engagement?
  • How do you close the deal? – All within a synapse.

CRITICAL ISSUES:

  • The question of cannibalizing the sale of the basic product, thereby reducing margins vs. building brand resonance, equity and market share.
  • Recognizing that the incremental spend on BĒP, factored into your Cost Of Goods Sold is primarily a brand / marketing investment that is supporting the entire ‘Go To Market’ strategic plan. The incremental spend should be viewed and analyzed akin to print, viewing media, social spend and events.
  • Has a percentage of overall volume and dollar spend for BĒP vs. the basic product package been rationally established? (Margin vs. equity building decisions.) All of which is based upon brand positioning, category activity, and tier.
  • Recognizing and factoring in brand interdependence on a global scale, and brand independence with the local sphere.
  • Making informed decisions, not solely on sell-in & sell-thru, but with available analytical data on your demographics’ habits and trends.
  • Ensuring ideation, options and design for the package are executed with serious, innovative, and creative intent; with all stakeholders driven to disrupt the category.
  • The ability, budget and adequate lead-time to offer innnovative concepts to the marketplace.

An extraordinary package design can alter the complexion of an entire category.

Precisely designed and executed, your package will profoundly impact brand identity.

 

Norman Kay

CEO, IBC Shell