For established brands, many shoppers come to the shelf looking for the product-and the primary role of the packaging is to ensure recognition that it is indeed the brand and product people know and trust. But new product packaging, faces a different (and far more demanding) set of challenges.

New products are the lifeblood of nearly every company’s growth strategy-and the source of enormous investments in development, research and advertising. Yet despite these efforts, it’s undeniable that the overwhelming majority of new products fail. In fact, most sources put new product failure rates at more than 80 percent-and fewer than five percent are considered clear successes, with $50 million or more in first year sales.

New product success is largely dependent on effective packaging. For established brands, many shoppers come to the shelf looking for the product-and the primary role of the packaging is to ensure recognition that it is indeed the brand and product people know and trust. New product packaging, however, faces a different (and far more demanding) set of challenges.

 Without question, the most decisive driver of new product success is shelf visibility (i.e., the likelihood that a product will be actively considered by shoppers). Indeed, across our studies, we’ve seen a consistent and direct relationship between shelf visibility and purchase levels.

This linkage should not be surprising: Despite advertising support, the reality is that very few shoppers come to the shelf looking for a new product. Thus, new product packaging must “break through clutter” and force consideration.

This can be daunting, because new products often have limited shelf space, perhaps two to three package facings within a “sea” of hundreds of products. In fact, our studies typically find that new product visibility is at 33 percent or lower.

This reality helps to explain why studies that are based on forced exposure greatly overstate sales projections for new products. They don’t take into account the fact that nearly two-thirds of shoppers will never even see and become aware of the new product! Overall, most new product failures are not a result of shoppers actively considering (and rejecting) a new product proposition. Instead, they are a function of new brands getting “lost on shelf” and never being considered by most shoppers.

So what is the best way to maximize shelf visibility? The one word answer is contrast. Visual contrast (relative to other brands on shelf) can come from several sources, which typically include color blocking, the use of unique packaging structure-and/or a very bold visual icon.

As a rule of thumb, color is the strongest tool-and the smaller the brand, the more important it is to “own a color” on shelf. While there is no “magic color” for creating contrast, we can say that the best solutions often involve “breaking the rules” of the category.

Wrigley’s 5 gum is an excellent example, as it broke from category norms of colorful packaging that suggest flavor to “own” the color black within the gum display.

While it may be intuitive that a new product must be unique, we’ve found that differentiating (versus the competition) in an extremely clear, visible-and ideally visceral or emotional-manner is critical to success. 

New products face a very difficult task in trying to change shoppers’ ingrained behaviors and thought processes, often in low-involvement categories. Given these barriers, a new product’s distinction has to be immediately apparent. At a minimum, new CPG products/packages must pass the “five-second test.” They must convey a clear point-of-difference in this limited time frame, which is how long shoppers typically take to actively consider a package, before deciding whether it should go in the shopping cart.

This fact points to another reason why many studies overstate new product success. They are based on extended exposure to new products, often in the absence of competitive options, which is simply not reflective of the shopping experience.

Of course, there are many strategies for differentiation, but the most effective start with truly innovative product propositions that “slice” categories in new ways and speak to shoppers’ underlying concerns.

For example, the success of the 100 Calorie Packs brand was driven by its unique delivery of an underlying consumer benefit (portion/calorie control) through innovative packaging.
When we observe shoppers in the aisle, we often see a “disconnect” between shoppers’ priorities and what these people encounter at the shelf (a plethora of features/benefits, flavors and sub-branding). That’s why we find many successful innovations “break through the clutter” by linking more closely to the shopper’s mindset-and by speaking directly to specific usage occasions (e.g. on-the-go packs, packs designed for school lunches, etc.)

On a packaging level, it is vital for new products to “embody a dimension” visually, by looking more premium (or more fun, or more appetizing, etc.) than competitive brands. We’ve found that structural innovation is the strongest strategy across categories in this regard; it is difficult to do this using just graphic changes when you are trying to differentiate on an emotional level.

However, a new structural delivery system (such as that for the consumer health product Alli) strongly signals innovation upon an initial glance.

 A third challenge for new product packaging is what we call “versioning,” which refers to working effectively within a larger brand family.

Most new products are sub-brands or line extensions, which means that they are typically “speaking” to brand users who are considering the new product in the context of what they normally buy. As noted earlier, we’ve found that new products tied to users and usage occasions are typically more intuitive to shoppers-and thus more successful at driving incremental purchases. Conversely, shoppers often have a more difficult time accepting premium line extensions, and understanding “good, better, best” strategies. 

With regard to packaging, new products involve a more delicate “balancing act” than entirely new brands. On the one hand, there is a need to leverage the equity of the established brand, which typically involves some visual continuity (i.e., the same logo, color scheme, etc.). On the other, there is the need to visually distinguish from the “base,” in order to drive visibility, awareness and consideration.

We’ve seen many companies err on the side of visual differentiation, by making new product packaging differ from the “base” across multiple dimensions (new colors, new brand identity, new labeling architecture, etc.). The result has often been confusion-and a default to the familiar-as shoppers have not known how to define the new product (How is it different from what I use today? Is it still right for me?).

This is particularly common when the labeling architecture, or placement of information, on the new product packaging differs from that on the base brand. Shoppers can’t quickly compare the two packages-the new product versus the current product.
Often, we’ve found that the “right answer” is typically at least 50 percent visual continuity from current (to leverage brand equity), varying one primary design element (such as color or structure) combined with a very clear emphasis on the new product’s point of difference.

In fact, it’s particularly effective when the new product name itself conveys or embodies the product’s reason for being-and is visually accompanied by a brief “definition” that speaks to its use or importance.

The packaging of Tide Coldwater illustrates this point, and does a very good job of managing this balancing act between visual continuity (via the familiar Tide logo) and differentiation (via the unique color).

 A fourth challenge for new product packaging is providing shoppers the key reassurances they need to make a new purchase. Here, it’s important to remember that many shoppers are buying for others and a driving factor/consideration is the desire to avoid making a mistake.

Of course, this dynamic works against new product trial-and it means that new product packaging has to work much harder to convey added value and provide needed information.

For marketers, this creates the strong temptation to fully explain new product benefits and include every possible claim on pack. However, when marketers try to “do too much” on packaging, the result is nearly always self-defeating clutter.

In fact, our studies consistently illustrate the fact that “less is more” in terms of packaging claims.  Specifically, we find that adding claims or messages does not drive higher package viewing times. Instead, more messages simply compete for the same four to five seconds of attention and reduce the likelihood that any single message will come through. It’s also dangerous to rely on the back panel for important information, because in-store observational research reveals that only 10 to 15 percent of shoppers consistently check back panels.

Of course, there’s no easy answer to this reassurance challenge, other than to approach packaging development with a clear understanding of the “hot button” issues within a given category.

In other words, it’s a matter of sorting and prioritizing the “need to know” information (potential deal-breakers) from the “nice to know” information (additional claims). In our experience, we’ve found that most critical reassurances relate to compatibility (i.e., Will it work with what I have today?) in technology categories and to users/usage (i.e., Is it appropriate for my child?) in other categories, particularly OTC pharmaceutical products.  
Perhaps most importantly, it’s critical to test new products without the benefit of extended concept statements or commercials. For the shopper, the package is the concept statement-it is all that he or she is likely to encounter at retail. If the package leaves key questions unanswered, this must be corrected in advance, before it’s too late.

 A final (and often overlooked) challenge is for packaging to create realistic expectations about the product inside. It’s a mistake to ignore this issue or to dismiss it as a product quality/delivery issue that falls outside the purview of the packaging development or design team. 

The reality is that when shoppers buy a new product, they are bringing with them a set of expectations created largely by the packaging (visuals, claims, etc.). Their satisfaction (or lack thereof)-and their likelihood of re-purchase-is a direct function of any “gap” between these expectations and the product delivery. Thus, as the old adage goes, the best way to kill a bad product is through a good package. 

Of course, this is not an argument in favor of making less compelling, and perhaps more realistic, packaging. However, it does speak to the importance of being as descriptive and informative as possible. In our experience, more direct, literal approaches are less likely to confuse or mislead than more abstract approaches in the treatment of primary visuals, naming/sub-branding, etc.

Perhaps more importantly, this issue illustrates the need to test new products holistically and from the “outside-in,” in a manner that mirrors the shoppers’ experience of seeing/buying the packaging and then using the product.

Too often-and most notoriously with New Coke-we’ve seen situations in which product testing is done on a “blind” basis, with terribly misleading results. Similarly, we’ve seen cases in which new product packaging was compelling, but not consistent with the product proposition-and thus likely to sell only once.

The odds against new product success are undoubtedly high. Moreover, it’s clear that effective packaging (which meets the challenges of visibility, differentiation, versioning, reassurance and product delivery) is absolutely essential, while weak packaging can “break” even the most compelling concept.

Thus, if success rates are to improve, the single most important first step will be for marketers to recognize that “the package is the product”-and change the role of packaging within the new product development cycle.

Today, packaging is often the last step of an extended process, but after years of new product development and concept testing it is likely to be rushed into several months to meet an introductory deadline. In the future, these elements must be better integrated, with a greater emphasis on shelf presence and packaging communication. 

Secondly, significant improvements are needed with regard to how new products are tested. The research process needs to better replicate the manner in which shoppers actually encounter new products: as packages; on shelves; within competitive context; and without the benefit of explanations, commercials or concept statements.

Taken collectively, these changes reflect a fundamental shift away from an “inside-out” approach to new product development that is centered on the product and concept towards an “outside-in” process that is focused on the packaging as the driver of expectations and satisfaction.

The result will be a far more accurate sense of performance-and, I believe, ultimately a much higher rate of new product success.  BP

The author, Scott Young, is the president of Perception Research Services, a company that conducts more than 600 studies annually to help marketers develop, assess and improve packaging systems. Contact Scott at syoung@prsresearch.com or 201.346.1600.