3 reasons why packaging is becoming increasingly important as a brand

Packaging as an extension of the brand

Packaging as a brand ambassador plays a central role in market entry and acceptance in new product categories. According to a study by the market research company Mintel, up to 94 percent of US consumers are influenced by their trust in a brand when it comes to product innovations. In addition, 35 percent of Brazilian consumers only buy hair care products from brands they have used before and 53 percent of Chinese consumers are loyal to brands they like.

Trust in the brand can be actively used by manufacturers to create brand loyalty and expand their traditional product portfolio. Unique packaging with a clear brand message is therefore a decisive factor in the purchase decision.

A very nice example of this strategy are the Carlsberg body care products. Originally conceived as a limited edition, the "Beer'd Beauty" product line now includes a hair care range, shaving gel, aftershave balm and moustache cream. The brewery group uses packaging that is based on the famous beer bottles and guarantees a high brand recognition value.

The power of packaging design in brand communication 

The packaging design reflects the brand identity and brings the brand to life - from the visual appearance and feel of the packaging to its function and sustainability. In discussions about advertising media for brand communication, however, competition between classical media and social media is currently the focus. Less attention is often paid to the packaging design, which is decisive exactly where the purchase decision is actually made: at the point of sale.

Market opportunity for creative packaging

However, almost 60 percent of product decisions are made at the POS. 56 percent of European consumers discover new products directly in the store, while only 45 percent cite TV commercials as the best source of information. There is also a trend towards brands that are entertaining and committed to the consumer.

For the packaging design this means: Away from similar looking and information overloaded packaging to a packaging design that is in the foreground as part of the brand and supports the brand in making the packaging an experience. This applies above all to young consumers and the aging hipsters of Generation X. 

Pizza Hut, for example, has developed a pizza box that also functions as a small stereo system. Using Bluetooth and printed electronics, it enables pizza lovers to connect their pizza box to their phone or laptop and play music.

There is therefore currently a market opportunity for those brands that not only connect with the consumer, but also offer him an experience and entertainment. Brand messages such as fun, community or authenticity can be communicated in the store or at home via the packaging to influence the purchase decision and strengthen brand loyalty.

Packaging design plays an important role in product innovations 

From this point of view, packaging as an element of branding has numerous potentials to make products distinguishable from the competition and to strengthen their attractiveness. The Nielsen Breakthrough Innovation Report also shows the importance of packaging and product design. The analysis of 9,900 product launches across Europe confirms packaging design as one of the most important factors for product marketing. The eleven most successful product launches - including Colgate, Air Wick, Gold Mine Beers Zhivoe and Whiskas - achieved sales of at least €7.5 million (€5 million in Eastern Europe) in the first year after the market launch and held at least 90 percent of them in the second year. 

One of the most striking examples of the role of product design in the successful market launch is the Gold Mine Beers Zhivoe, Russia's first non-pasteurized beer. The brand's agency created a bottle that resembles a freshly drawn glass of beer. In this way a connection to the refreshing taste of draught beer and a bar-like situation was created. Moreover, the design was so different from traditional beer bottles that the bottles were sold out within a very short time.

© Gold Mine Beers Zhivoe, Design: Svoe Mnenie, Russia

Packaging as an indicator of product quality

According to the Mintel study, high-quality food packaging is an indicator of product quality for a third of US consumers. Therefore, the time is ripe for unique packaging structures that not only focus on differentiation on the shelf, but also contribute to the creation of the brand identity and thus give consumers an incentive to purchase the product. In a nutshell, this means: good packaging protects the product. Great packaging protects the brand. 

Packaging and product as a unit

Packaging is always also a promise of the content, i.e. the product. Packaging and product should therefore form a unit, i.e. the packaging should make the quality of the product visible on the outside. Confectionery or cosmetics, for example, often have a gift character that should be reflected in the packaging.

© Miu Miu perfume in high-quality packaging for young consumers

However, some companies that offer a wide range of products in several market segments define themselves by packaging from the bottom up. Instead of presenting products in an inexpensive segment in high-quality packaging, the products in the high-priced segment are presented in a rather inferior packaging. This means that the packaging cannot fulfil its function as a trademark agent. So there is still a lot to do to implement the importance of packaging design as a brand ambassador in all branches of industry. 

New opportunities through digitization

Digitalization also opens up new opportunities for designers and brand owners to communicate with consumers. Active and intelligent packaging creates added value that is particularly appealing to digital natives. Compared to older people, they are very affinity to the brand and evaluate the packaging as a quality feature. Depending on the attractiveness of the packaging, a decision is made as to whether the product is recommended or not.

© Insignia Smart-Label, The colour of the dot changes according to the freshness of the product

In the case of e-commerce packaging, product packaging is used to present the product. In this respect it has become apparent: The higher the Internet usage, the more emphasis is placed on high-quality product presentation. You can find out more about the importance of packaging in online retailing in our blog "Why online retailing puts packaging in the spotlight". 

Touchpoints through packaging can therefore be found not only in the physical world, but also in the virtual world. The combination of both worlds through QR codes or augmented reality applications opens up the possibility of addressing consumers via the packaging and directing them to the brand in both the physical and virtual world.

The Touchpoint study by FFI and Pro Carton provides for the first time a media equivalent value for packaging that makes the contribution of packaging to marketing success measurable. Steffen Schnizer, spokesman of the board, Fachverband Faltschachtel-Industrie e.V.:

"Packaging has so far been underestimated as an advertising and communication medium. The Touchpoint Study 2015 provides us with insights into the millions of contacts and the value of the folding carton. Now we should talk about the quality of communication with consumers via this channel. Design, printing and finishing are decisive for this. The aim is to improve the packaging design, generate attention at the point of sale and sustain customer loyalty. No other advertising medium has consumers had such long and intensive contact with. This strength must be used." 

Conclusion: Packaging as a brand

The packaging expresses the brand in competition through its content and design. It not only contributes to the protection of the product, but is also an essential part of the overall performance of a brand. Branded packaging is an effective and important marketing tool that promotes and should be used as an important medium for brand loyalty.