Labels - A Crucial Sales Promotional Tool

Once thought of as the last item to consider in product marketing, now product labeling is a key factor in promoting sales growth. Research shows that the product’s label is highly influential in determining the consumer’s level of interest in a product at the Point of Sale and in integrated marketing communications programs. This is true for nationally recognized brands, and it is even more important in private label brand programs. Private brands typically rely heavily on the product’s packaging and label to market products at the Point of Sale.
In a fiercely competitive industry, retailers are incorporating more technology to track products, increase sales, and reduce cost. The most successful corporations are adopting customer-centric policies to boost business. Customer-centricity allows retail chains to customize their store layouts based on the consumer demographics of each individual location. RFID labeling supports customer-centricity by allowing retailers to keep real-time data of product and sales status. With this technology, retailers may move products that are not selling to less desirable locations in the store or discontinue the item completely. As a result, to keep their product in sight of the consumer, suppliers are challenged to package and label their products to meet the needs of their customers as well as their retailers. Successful retailers implementing costumer-centric ideals include Wal-Mart, Home Depot, and Best Buy as well as many others. With the right merchandising strategy, suppliers can successfully package and label their products to meet the needs of their customers and retailers to maximize sales.
To develop a successful product marketing sales strategy, it is important to analyze several points of market research:
Successful tactics of the top retailers of the supplier’s sales channel.
Labeling and packaging requirements for specific retailers and their customers.
Creating a package and label design that is customer-centric.
Using technology to maximize consumer data and minimize cost.
Follow the example of successful labeling campaigns requirements.
Success in Retail and Wholesale Channels
Among the first to require their suppliers to use RFID tags on pallets, Wal-Mart has an IT strategy and costumer-centric policy that has kept the chain as one of the most successful in the nation. Their IT strategy creates an efficient system throughout their network. By incorporating a consistent system, error is minimized, and more time is allowed to focus on product turnover and customer satisfaction. This satisfaction is taken into account first and foremost when Wal-Mart decides to work with a supplier.
Label Requirements and Customer-Centricity
Wal-Mart’s motto to their suppliers is, “If it works for our customers, it works for us”. When it comes to the product package and label, their rule is that the customer must “get it” within 3 seconds from 15 feet away from the shelf. Once the product fills these requirements, the item must grab the attention of the consumer. The average consumer wants to be dazzled, and it is therefore imperative that packages and labels are created with the consumer’s needs in mind.
Packaging and labeling must not only appeal to a target market, but must also address the specific demographics of the retail store selling that package. When a consumer has a need for a product, their first buying decision is quite likely which store to shop at rather than which product to buy. Therefore, a supplier must maintain a solid relationship with their retailers who act as the gatekeepers to their consumers. Retailers strive to provide a convenient, comfortable shopping experience for their customers. In order to keep their product alive and in sight of the consumers, suppliers must adhere to what is important to each retailer as much as to what is important to their end customers.
Success in Private Label Brands
Private label brands are a success story among big retailers as well as national buying groups and wholesalers for independent local dealers. Private brands which were once considered low-price alternatives to national brand names are now matching or surpassing the sales of national brands. This trend is largely attributed to the packaging and labeling of private brands. With minimal advertising budgets, private label brands must use the packaging and labeling itself to market the item. The packages and labels have so successfully captured the consumer’s attention that the quality of private label brands is now considered to be equal to or greater than national brands. Retailers, such as Wal-Mart, who have been selling private brands since 1991, are well aware of the power of private label brands and how to position such items to consumers.
Another advantage of private label brand packaging is the ability to service a wider demographic target market. To appeal to the growing number of consumers open to buying private brands, suppliers and retailers have come up with new ways to gain customer loyalty. Rather than just emphasizing their price-point, private labels are being designed to target specific consumer groups’ buying requirements. Private brand suppliers are marketing “new and improved” items that offer more features that appeal to old and new customers alike. By staying in tune with consumer interests and needs, private label brands are a trend that is sought after by the best-in-class retailers.
Making Labels Work
For suppliers focused on driving sales revenue growth, there are several ways to approach packaging and labeling in a customer-centric environment:
Appeal to specific demographics of each retail channel
Design custom labels that differentiate their products as well as being easy to understand
Gather customer data and adapt to changing consumer’s needs
Treat packaging and labeling as a prime marketing communication strategy
Customer Demographics
Since the retailers are making customer-centric modifications to bring consumers through the door, product labels and packages must address the retailer’s and the customer’s specific demographics. For instance, food and beverage suppliers selling through Target or Whole Foods Markets may want to create a gourmet line that appeals to thrifty shoppers. Some consumers demand environmental-friendly suppliers that use recycled materials and minimize the amount of excess packaging materials. Shoppers seeking a low-cost, equal alternative to national brands may want products that explicitly compare contents and quality with their national brand competitors. With each retailer comes a unique consumer expectation. Using this knowledge to respond to customer expectations is highly advantageous.
Brand Differentiation
Each package and label should immediately capture the attention of the consumer. If the label causes the shopper to do a “double take” upon seeing it, the chances of selling that product increase dramatically. Having caught the attention of the consumer through an innovative design, the label must also be clear, easy to read, and make sense. If the consumer can’t immediately determine what the product is or what it does, he or she will move on. Suppliers can extend the reach of their marketing communications programs by utilizing a common brand identity across product lines and promotional plan elements. Not only does this make it easier for the consumer to recognize the product, but it is also an efficient strategy for creating brand awareness and brand credible.
Adapt to Changing Customer Behavior
When it comes to creating the design and layout of a product label, adaptability to customer demographics is essential. Many companies gain information on consumer preference through focus groups, retailers, and other customer buying behavior data. Using this information, a supplier can determine what makes a label more appealing and easier to understand, which can have a direct effect on sales performance. In addition to knowing and delivering what your consumer wants, the packaging and labeling must work in the application conditions. For instance, labels that wrinkle or peel off of a product convey poor quality to the consumer. If label graphics bled, it may make the product information difficult to read over the life of the product. There are many resources available on how to pair the package and label materials to a wide range of application conditions to provide innovative graphics as well as robust technical performance.