How a Proper Holiday Packaging Strategy Can Keep Your Brand Off the 'Naughty List'
Packaging Digest reports that the Christmas season alone constitutes roughly 60% of all holiday sales.
That's an enormous market packed with great potential. From coffee cups to bottled drinks to bags of candy to special holiday-only products, the holiday packaging season is truly 'the most wonderful time of the year' for consumer packaged goods (CPG) companies and contract packagers.
But creating specific product packaging for the holidays carries with it certain risks, and any seasonal packaging campaign must be carefully strategized for optimal results.
The Obsolete Inventory Problem
One of the biggest drawbacks of seasonal, holiday, or otherwise time-sensitive packaging campaigns is that without proper planning, CPGs and end retailers can end up with a lot of unsold, returned, and obsolete inventory. Usually, their only option is to slash prices at the end of the season to rid themselves of excess product. While consumers love 'after-holiday sales', from a resource management standpoint, their very existence is a reflection of poor sales forecasting and improper inventory management.
CPG companies and retailers seek to mitigate this problem by relying on hard data and paying close attention to current consumer trends and the direction in which those trends are heading. It's a delicate balance - companies do not want to miss out on the greatest opportunity of the year for increasing revenues, but also do not want to end up with a bunch of unsaleable inventory after the season ends.
So what are some strategies that companies employ to ensure that the risk of obsolete inventory is minimized?
Superior management and inventory planning
Packaging Digest reports that a popular popcorn company has based their entire business model on occasion-based packaging. To them, the sales forecast is the Holy Grail. To this company, "the benefits one gains from the risks of obsolete packaging outweighs the uncertainty; an astute and well-managed sales team can mitigate this risk."
How do they successfully do this? It's all about the data. Companies that have mastered occasion-based packaging and promotions use complex algorithms to take into account past and current consumer behavior and trends in an effort to allocate resources most responsibly.
Automating Packaging Processes
Despite all the planning and strategy in the world, a campaign featuring product packaging for the holidays will not be successful without the ability to predictably execute the packaging process itself.
While hand-packaging can sustain small operations, the inherent unpredictability that comes with relying on humans can throw a wrench into the best-laid plans. Automating processes with modern packaging equipment allows a company to reliably compute how many packages can be produced per minute, hour, shift, etc. and allocate resources accordingly.
Not to mention, packaging automation results in better package seal integrity, which is always important, but becomes even more so around the holidays when consumers seek to ship gifts to friends and family.
Packaging needs to withstand shipping and handling, as well as changes in temperature as products, make their way to their intended recipient. With improper seals, gifts could arrive not only in a messy state, but their quality could be compromised as well. Utilizing packaging machinery with superior sealing jaws forged from a single piece of material is one of the major ways to combat faulty package seals.
More Generalized Package Design
A package of candy with a snowflake motif has a much longer campaign life than one that is emblazoned with Santa Claus. Many CPG companies have altogether shied away from specific Christmas packaging design. Instead, they choose more general motifs like wintery images or animals.
And often, more generalized package designs can be a greater success than more targeted campaigns. Consumers are more likely to 'stock up' when a product will be viewed as 'relevant' for many months, even after the holiday is over. Plus, consumers will not expect a markdown if the packaging is ambiguous, giving companies a greater window during which to sell their product at full markup.
It's Not Just Packaging, It's Personal
A hot holiday packaging trend is adding a bit of personalization. While this may fly right in the face of more generalized packaging mentioned above, personalized packaging is in a category all of its own.
Whether it be adding consumer names to packages or making your packaging 'collectible', consumers love when a product seems to speak directly to them. It's engaging on a personal level and makes the consumer feel as if the product was created with them in mind, and not just to be sold to the mass-market.
Companies that master personalized packaging also can experience greater social promotion of their brand, both online and offline. A product that touches an individual personally is something they want to share with friends and family, and also makes a great gift for loved ones.
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Originally published 12/13/16. Updated 10/26/18.