March 25, 2014

The battle for consumers’ attention rages on across the globe and the Dutch retail sector is no exception. The Dutch supermarket division, in particular, is filled with cutthroat competition, says Bart de Jong, Managing Director at our office in the Netherlands. While the economy is slowly heading in the right direction, consumers tend to observe very little of the impact when it comes to their own wallets. Thus, purchase decisions are still largely driven price.

The Dilemma

Brand managers are faced with a dilemma: How, under these challenging circumstances, can they increase brand awareness and motivate consumers to buy? Shelf Ready Packaging (SRP), which seeks to get products in and out of the shelf as quickly and efficiently as possible, is the latest innovation that creates a ‘stand-out’ presence in the supermarket.

The Solution

SRP is a relatively new initiative that gives both the brand manager and the retailer infinite possibilities to present products in way that increases sales. In the literal sense, the SRP is the outer case – the packaging that contains a certain amount of individual products, such as a dozen margarine tubs – that can be placed on the shelf in its entirety. One of the advantages for the store manager is that the staff can place the package directly on shelf, with only one action needed: Open it up.

The Brand Advantage

For both A- and own-brands, SRP is an extension of the brand. And when properly executed, it improves brand experience and increases recognition among shoppers. Though currently only a progressive minority takes advantage of SRP, the days of boring brown boxes and messy shelves are numbered. In the Netherlands, Unilever is one of the leaders, together with Ahold, which drives SRP innovation from the supermarket sector, says de Jong.

The Design

Obviously a well-designed SRP provides stand out presence and retrievability for the brand, the sub range or variant. But it’s much more interesting when SRP is used for activation on the shelf. Because SRP is like the packaging itself, it can be seen as an “owned medium,” used to enhance desirability, break a purchase barrier and activate triggers to purchase.

SRP is slower to gain momentum in the Netherlands, but is much more common abroad. The brand or store promotion is contained within the SRP-design, which seamlessly connects to signage, navigation and other POS materials in front of, above, on and around the shelf.

The Case Study

Brands such as Unox are smartly taking advantage of SRP, since it generally allows retailers to stock more products on the shelf. With SRP Unilever has 40% more sausage on the shelf compared to their presence without SRP. In addition, the demand for smoked sausages in The Netherlands is directly linked to colder temperatures. So in the winter, placing the smoked sausages into a SRP considerably reduces out-of-stock situations. In combination with a promotional positioning in a gondola end or in the refrigerated section, an even higher turnover can be achieved.

The Opportunities

After the price war that began in 2004, the supermarket industry remains in a complex situation and choosing the price instrument is a short- term solution with little impact in the long term. To create better sales opportunities brands and retailers will have to continue to innovate. Shelf Ready Packaging is the ideal vehicle for both promotional and non-promotional products and can provide positive shopping and brand experiences. A win-win for all parties involved – who wants to miss out on that?

For more insight on Shelf Ready Packaging, read the full article, ‘Is your brand ready for Shelf Ready Packaging?’ in Marketing Tribune.