Tempting customers to pick a product off the shelf has never been more challenging – or more exciting. In a digitally dominated world, the right brand image is fundamental to attracting and retaining customers. Brands are increasingly embracing limited editions, personalisation and – in the food market – innovative flavour combinations that build on the core product and brand image to attract the next generation of consumers.
However, there is a huge barrier to innovation: the mismatch between brand marketing lead times and retailer demands. Retailers are working on a two- to three-day lead time, especially in fresh and chilled food – with the on-shelf product mix dictated by intelligent analytics that factors in weather and sporting events as well as trends in customer demand. In contrast, when it comes to creating the right packaging for big sporting events, FMCG companies are working six to nine months ahead. Brands are faced with the prospect of missing opportunities or risking both product and packaging wastage by predicting print quantities based on unknown variables, such as sports game results.
How can brands manage this unprecedented demand volatility at a time when experimentation and product testing has become essential? Lee Metters, Group Business Development Director, at Domino Printing Sciences (Domino) explains how the convergence of digital printing and coding and marking is enabling brand marketing teams to deliver just-in-time innovation that captures consumer attention.
The consumer demands of millennials, seeking a range of options such as ethically sourced products and plastic-free alternatives, as well as access to far more granular product information, has left retailers fundamentally reconsidering how their range engages their customers. In many ways, the onus of delivering change and responding to increased consumer demand has fallen on the brands. From flexible pack sizing to sustainable packaging and innovative design, consumers have pushed the demand right back up the supply chain requiring brands to make vital production line changes.
Today, brands are stepping up by overhauling production processes, and utilising innovative printing technology to support incredibly short production lead times, to respond to retailers’ small-order, just-in-time demands. The number of pack sizes has multiplied to meet the consumer demand for more choice and smaller options – and packaging is being revamped to optimise environmental footprint. For brands, such flexibility is now essential to retain retailer contracts and shelf space, but this speed of change creates new challenges.
Speed of product iteration is key, yet while production lines are increasingly flexible, the packaging creation process and supply chain often remains a significant barrier to innovation and a constraint for marketing teams. In other words, while many brands are now beginning to optimise their manufacturing processes to enable fast, cost-effective responses to consumer and retailer requirements, they are yet to bring this agility to the product packaging process.
As an example, brands may want to respond to consumer demand for variety in products with limited editions, new flavour combinations, and vegan and organic product variants – all requiring their own unique product packaging. Anecdotal evidence suggests that utilising traditional product packaging lines for new product launches can lead to up to 50% wastage of packaging stock due to the uncertainty of demand. Besides the inherent financial waste, this is in direct conflict with most brands’ commitments to improve their environmental credentials.
In general, digital printing technology is used at packaging rather than production sites. Due to the changes in consumer demands, the market is evolving with an opportunity to bring coding and marking and digital printing technology under one roof at the manufacturing site. This digital convergence paves the way for late-stage customisation of product packaging, providing manufacturers and brands more control and agility within the factory walls.
One key enabler is the increasing availability and cost-effectiveness of digital printing technology for packaging. Manufacturers’ ability to access short lead-time packaging production (down to 12–24 hours from an historic 5–7 day lead time) at affordable costs means just-in-time delivery is becoming possible.
Now manufacturers can print best before dates, ingredient information, and customised packaging designs all within one site. This same digital printing technology can also be applied in-plant to allow packs to be customised and personalised online. Extending production innovation in this way to include packaging is essential if companies are to make short lead-time design changes and still have great looking packaging without incurring untenable costs and waste.
Not only can the convergence of digital printing and coding and marking start to transform the speed of iteration, it alsopresents additional opportunities beyond the production line. Brands are starting to explore how new coded information can be added to enhance the interaction, increasing the options for consumer engagement.mmm
This helps to address legislative demands globally for improved food safety, but also meet the expectations of an environmentally aware consumer who wants clear information into ethical sourcing and food provenance. The ability to share information about an item, including the origin of ingredients, provides a chance to appeal directly to those individuals actively looking to make more informed purchasing decisions.
Looking to the future, there is a significant opportunity for brand owners to connect directly with the consumer, using codes to provide a lifetime marketing opportunity. When and where consumers scan a barcode or QR code could provide new insight into customer behaviour and a chance to engage individuals in ongoing communication. Furthermore, analysis of the locations of customers scanning codes will provide a brand with invaluable insight into consumer purchasing behaviour – information that can be used to enhance conversations with retailers and inform future marketing campaigns.
Retailers are pushing hard to provide a richer experience to attract a demanding consumer base. Physical products need to offer something different to engage the customer – and they need to appeal to an increasingly diverse consumer base. For brands, the pressure to innovate not only on the product but also in design and messaging is hugely challenging, but it also creates compelling opportunities. Brands in 2020 are so much more than the product; consumer desire for engagement and interaction is creating an amazing chance for marketers to work with production teams to bring a new depth to the product experience.
By remodelling production processes, and introducing digital printing solutions for use alongside coding and marking technology, brands can achieve an extraordinary pace of iteration. New products can be designed, produced, packed, and trialled on a near-daily basis. With ease of customisation, short-run efficiency, and short lead times, test marketing can be achieved incredibly quickly, enabling better targeting as well as short runs of limited editions.
In effect, by embracing this digitised model, brands can move from one or two product launches a year to continuous product launch mode and feed ever-increasing consumer demands.
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