Private-Label Packaging: When Goals Change, Designs Change
The expanding role of private-label packaging has altered how it’s designed. It’s becoming more sophisticated––and more valued by retailers.by William Makely
The marketing of private-label beauty products has undergone a subtle revolution in recent years. These products were originally introduced many years ago as less-expensive alternatives to costly national brands, designed specifically to capture what would have otherwise been lost revenue when consumers turned away from pricey branded products.
In this early stage of the evolution of private-label products, retailers began to use what became known as store brands to build shopper loyalty analogous to the loyalty that many consumers felt for successful national brands. Many of these store brands continue to be very popular with price-conscious shoppers today, and given the current economic situation, that popularity is unlikely to slacken. In recent research commissioned by NCR Corp., for example, 63% of respondents indicated that one result of the economic downturn was that they were “trading down” to store brands rather than buying branded products.
The “New” Private-Label
But other factors have also brought changes to the beauty aisles.
“In an effort to drive their products past the 20% unit share of sales that private label used to enjoy, retailers have moved their brands toward more distinctive, premium labels,” points out Gail Ritacco, vice president of market insights at design firm Product Ventures Ltd. “At the same time, savvy shoppers are no longer buying private-label products for price alone. They perceive these newer products to be of similar quality to national brand products, and they are willing to pay for that quality.”
As a result, today there are three distinct categories of beauty products in most retail outlets rather than two: national branded products, the less-expensive store-brand products, and a new category variously identified as “dedicated” or “exclusive” brands––distinctive, higher-quality products that can only be purchased from one retailer.
There has been a growth of a new breed of store brand. Take the case of the THERE brand of skin care and bath products in Cost Plus World Market, in packaging designed by Philippe Becker of San Francisco. There has been a virtual explosion of these new brands in chain drug stores such as CVS and Walgreens.
One of the earliest exclusive brands introduced by CVS, in 2003, was Lumene, a line of skin care products developed in Finland. Today, the Lumene line has been greatly expanded, and other CVS exclusive brands have been launched, including such personal care products as Skin Effects by Dr. Jeffrey Dover, 24.7 Skin Care products, and one of its newest offerings, Blade shower gel for men.
Walgreens is another retailer with a significant commitment to private-label brands––both store brand and exclusive.
The Designers’ Perspectives
A traditional private-label store-brand product is sold in packaging that reflects what it is: an alternative to national brands that offers adequate quality at a lower cost to benefit the consumer. What drives the design of these packages is primarily cost and the goal of strong identification with the store.
The exclusive brand is another matter entirely. Its purpose is to compete directly with the leading national brands in its category. The cost of producing the package is important––as it is with every package––but not paramount. Controlling costs will enable the retailer to maintain a favorable price differential, and to reap a higher margin than in sales of the national brand.
This has significantly changed how these exclusive brand products are marketed, and how their packaging is designed. Their design is intended to reflect product quality rather than store ownership, and the cost differential compared with national brands is left to speak for itself. The designs of these packages are also intended to play a significant role in the sale, as do the designs of national brand packaging.
“Two things attract consumers to packages on shelves,” says Product Ventures’ Ritacco. “One is shelf presence: bright color, eye-catching graphics, and a distinctive structure. The other is an obvious convenience feature that will benefit them––like a spray dispenser on a package in a product segment where screw caps are the norm, for instance. Either one can move a consumer to buy a product for the first time. The quality of the product and the benefit provided by the package will determine the repeat purchase––and the hoped-for long-term brand loyalty.”
“All of our private-label products, both exclusive brands and our W brand products, are comparable in quality to national brands,” states Tiffani Washington, manager of media relations and marketing. Walgreens personal care product lines include both its W store brand line and such successful exclusive brands as its Men’s Zone hair and skin products for men and its popular Bioinfusion line of hair care products.
Walgreens’ Washington describes the process followed by the retailer in designing its exclusive brand packaging. “The package design is a collaborative effort between Walgreens in-house designers and those of the various suppliers. Walgreens develops guidelines that ensure consistency among new product designs and the designs for product line extensions. The retailer also conducts extensive research of the brands that each new package will compete with for customer attention, in order to come up with the most effective design.”
TricorBraun designs, manufactures, and distributes rigid packaging for a wide variety of brand owners, including some private-label brands. The TricorBraun Design Center has designed many packages for national brand beauty products. How different is it to design for a private-label product?
“When designing a package for a national brand, the designer focuses on how to make that one package stand out above all others,” says David Snyder, Tricor-Braun’s design director. “We research competing brands worldwide to ensure our design is unique.
“When designing a private-label package that is being developed to compete against the leading national brand, I have that specific brand package to compete with. It will always be in my mind as a guideline, either to mirror it or to distinguish from it. It focuses my design choices.”
Stephen Kocis, manager of the creative services group of Silgan Plastics, a leading maker of plastic bottles and closures, who also designs packages for private-label customers, agrees.
“With a private-label project, there is much more direction up front. Rather than an open-ended goal of creating an outstanding design, we can concentrate on creating a competitive package, which makes the process much more efficient.”
Ritacco has seen a change recently in retailer attitudes toward design. Retailers had never in the past contacted Product Ventures regarding designs for private-label packaging, but that has changed in the past year. Without naming names, she cited continually increasing interest––perhaps influenced by the worsening economic climate.
“The heightened sales of their private-label brands may give retailers both the interest and the opportunity to dedicate more money toward innovation and design,” she says. “Improving the brand image of their exclusive brand products through their packaging would be a strong tool in the effort to ensure continued consumer loyalty when the economy bounces back.”
Want more information on the private-label industry? Visit the Private-Label Manufacturers Association’s annual Private-Label trade show, happening November 15–17 in Chicago. Visit www.plma.com for more information.