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The Role of Packaging and In-Store Environment

Perception Research Services International (PRS), specialists in packaging and in-store marketing, and Nielsen, experts in end-to-end innovation analytics, teamed up to investigate the crucial role that packaging and in-store environment play in new product success.

Millions of dollars are spent every year to develop, market and launch the thousands of new products that line the shelves of retailers. However, Nielsen research shows that most of these products will not sustain their sales performance past their first year. In fact, the vast majority of new products completely disappear from the shelf, within the first three years of their introduction.

Perception Research Services International (PRS), specialists in packaging and in-store marketing, and Nielsen, experts in end-to-end innovation analytics, teamed up to investigate the crucial role that packaging and in-store environment play in new product success.

The study examined the importance of shelf presence for launched products. Next, PRS and Nielsen worked together to determine the best way to incorporate shelf scores into forecasting models. In total, the organizations reviewed 30 launches tested by both companies before arriving at a series of conclusions and best practices.

 

Collaborating to Improve Forecasts and Launch Success

Clients depend on collaboration among the many parties involved in launching new products, and value cooperation that leads to the best insights. Through this joint research, Nielsen and PRS confirmed that collaboration can lead to higher levels of success. This study showed that incorporating PRS results into Nielsen BASES models could provide incremental information to achieve the most accurate assumptions for shelf presence. The analysis found that PRS inputs proved especially important in the following circumstances:

  • The package changed in the time between Nielsen and PRS testing
  • Packaging scores were either very high or very low in PRS testing
  • The shelf was particularly complicated or messy
  • The shelf varied substantially by channel or region
  • Ad support was minimal

 

Overall, the PRS and Nielsen collaboration - focused on capturing the role of the package and the shelf in the buying process - provides manufacturers stronger forecasts and higher levels of confidence.

“All elements supporting a new product’s launch are important. Collaborating with PRS represents a complementary way to provide stronger recommendations based on in-store visibility and distribution quality execution and effectiveness.”

– Steve Luebkeman, Senior Vice President, Client Consulting, Nielsen)

 

In-Store Visibility Plays a Critical Role in Driving Sales

New product success depends on getting the right combination of factors in place – from a distinct proposition with a clear message to findability in stores. Retail settings can be very challenging environments for new products. Too often, new entrants can be missed as shoppers navigate through cluttered aisles. That makes measuring and managing in-store visibility important – as important as strong advertising – to maximize the sales potential of new products.

 

Shelf Presence is Important

The joint research reaffirms that great packaging and high levels of retail visibility usually lift sales. A great package alone, however, does not guarantee strong shelf presence, which is impacted by multiple factors. The analysis confirms that compelling packaging graphics are important, but emphasizes that other distribution quality elements, including number of facings, placement on shelf, and the nature of the shelf itself, are critical as well. Overwhelming shelf clutter, limited shelf facings and/or placement at the margins of the shelf can all pose a threat to in-market success. When consumers don’t see or can’t find your product at the shelf, they don’t purchase it.

An assessment of launch validation (in which actual results are compared to pre-launch forecasts) showed that distribution quality (shelf presence) has a substantial impact on overall sales, especially in those cases where advertising levels are low and the majority of awareness for a new product is generated in the store. Moreover, the analysis identified cases where shelf dynamics are likely to harm chances for success. Often, launches were found to have strength in one area (e.g., great graphics) which were offset by weakness in another (poor shelf placement), limiting shelf presence and sales potential.

“Our collaborative research with Nielsen confirms that having the right packaging and a strong shelf presence is critical to new product success. We’re excited to be working with Nielsen’s Innovation Analytics team to quantify this connection – and help ensure that our clients’ new products ‘break through clutter’ and drive trial.”

– Scott Young, President, Perception Research Services

 

Collaboration in Action: The Kraft MiO Case Study

Kraft tested their new MiO Liquid Water Enhancer with both Nielsen and PRS prior to launch. Despite its small size, MiO’s unique packaging shape tested well and was likely to be noticed on shelf. However, the MiO graphics changed between the two studies. When Nielsen re-simulated volume based on the launch plan, the results of PRS analysis helped Nielsen capture the impact of the updated bottle, and also identified an in-store risk not apparent before. The PRS results identified major differences in shelving and retail visibility across key retailers, as shelf placement was far more favorable in Walmart than within grocery outlets. In addition, the grocery shelves were quite fragmented.

Strong shelf presence raised trial in Walmart, while limited in-store visibility reduced trial in other channels. With the help of PRS, Nielsen accounted for these differences to arrive at a more accurate all-outlet forecast.

“We’re excited that two of our trusted partners – Nielsen and PRS – are working together to ensure excellence in the packaging and shelf presence of our new products. We’ve already seen benefits, in terms of more effective packaging and even more accurate volume forecasting.”

– Barry Calpino, Vice President, Breakthrough Innovation, Kraft Foods Group

 
Planning for a Successful Launch: Packaging and Shelving Matter

The insights gained from this joint Nielsen and PRS analysis have direct implications for helping companies improve their launch decision making. Specifically, marketing teams developing a go-to-market strategy for in-store execution should:

  • Consistently pre-test prior to launch to understand packaging and on-shelf performance and identify risks early
  • Focus on packaging and shelf presence to enhance new product forecasts
  • Use results to generate mitigation plans for instore visibility issues, such as utilizing POS support for certain stores/channels
  • Test or model “what-if” volume scenarios to assess the potential impact of changes in retail presence (more facings, alternative placement, etc.)
  • Ensure that shelving assumptions in package tests and forecasting systems are realistic and consistent with one another Regardless of other marketing support, this research confirms that marketers need to emphasize strong delivery on packaging and shelf presence to ensure new product success.

 

About PRS

PRS works with marketers to develop pre-test packaging, shelving, and POS marketing systems for both new product launches and restages of existing brands. PRS’ On-Shelf Evaluation alerts marketers of potential issues in these areas and provides guidance for optimizing packaging and in-store communication. For more information, visit www.prsresearch.com.

 

About Nielsen

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, The Netherlands. For more information, visit www.nielsen.com.

 

This content was provided by Perception Research Services International. Visit their website at www.prsresearch.com.

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PRS IN VIVO

PRS IN VIVO

Teaneck, New Jersey, United States of America
Telephone:
(201) 346-1600
Email:
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About PRS IN VIVO:
The merger of PRS and IN VIVO combines two companies that are both well-known as leaders, innovators & expert advisors.
www.prs-invivo.com

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