1. Changes in Retail and Their Impact on Packaging
How to Win in Today’s Evolving Retail Marketplace
Ron Sasine
Hudson Windsor, LLC - Retail Packaging Strategy & Execution

2. Three Big Messages, and a Recommendation
Retail is becoming increasingly disconnected from its past and moving in new directions
Millennial Moms will make most of the important decisions affecting business today and for the next 30 years
Successful packaging development and innovation will need to support retail strategy
Put yourself inside the head of your customers— the CPG companies—and think about how they interact with their retail customers

3. Why Packaging? …a Refresher Course
Convey
Farm or factory/distribution/POS/consumer
Communicate
Product Identity
Product Needs and Safety
Destination
Convince
Present the Brand Promise
Call to Action
Drive After-Purchase Consumption

4. Driving your Biggest Future Opportunities and Threats
Convey
Corrugated has a long-held, prominent position
Increasing challenges from RPC’s and other pooled resources
Massive emerging opportunities in e-commerce
Shifts in transportation methods, distances, modes
Speed to shelf and POS

5. Driving your Biggest Future Opportunities and Threats
Communicate
Changes in Wal-Mart’s print requirements for its largest categories are designed to streamline back- room operations
$2.7 billion investment in in-store labor requires associates to move from low-value added activities to higher value-added activities
On-shelf availability is key to sales, and new consumers treat out-of-stock items differently
Knowing what you have and where you have it is key to retail, and cluttered backrooms get in the way

6. Driving your Biggest Future Opportunities and Threats
Convince
Brands need new places to communicate their Promise as TV commercials become irrelevant and consumers seek out other sources of product information
New methods and vehicles give seamless access to products with an instant call to action
Are consumers ready for and do they want simple, unprinted functional packaging?
How will new packaging formats live and express themselves in consumers’ homes?

7. “I want it cheap, with free shipping, by tomorrow”
1962 – birth of Big Box Retail
Retail Disintermediation in 2000’s
Growth of On-line Purchases
Showrooming
Mobile technology
New Retail Drivers in 2010’s
Social influencers
Social purchasing
Seamless Media shopability

8. New Ways to Solve Old Problems
Glass Packaging production hit its peak in 1979
Baby food, beverages, condiments, pickles, dairy, sauces
Paperboard Packaging production hit its peak in 1998
Breakfast cereal, cookies, crackers, frozen foods, milk
Metal Packaging production hit a cyclical peak in 2010
Beverages, shelf-stable foods, pet foods
Plastic Packaging continues to take market share from each of these traditional material classes
Source: U.S. Environmental Protection Agency, 2014

9. New Moms, New Formats, New Challenges
80 million Millennial consumers (b )
Largest generation ever, surpassing Baby Boom ( )
$2.4 trillion in combined annual purchasing power
In 2016, 51% of all children have a Millennial Mom
Delayed entry into adulthood: low home ownership, later marriage, high debt levels
Connectivity: social media, social influencers, social consumption
Abundance of choices: hyper-individualization, experimentation, anything/anywhere, quality of life vs. quantity of possessions
Marketers’ task: understand, integrate and harness these emerging consumption drivers
Source: MarketWatch, Fortune

10. Millennial Definition of Quality
Function: Expectations of technology and innovation
Freshness: Authenticity of products and alignment to personal goals
Flavors: Adventure, experience, and novelty; high propensity to share results of their experimentation
Socialization: Collaboration and shared goals; companies that figure out ways to co-create with millennials will have an edge
Values: Millennials care about what’s genuine and authentic and buy products from companies that support causes they care about
Source: Forbes, Boston Consulting Group
Source:

11. Today’s In-Store Environment
Let’s take a walk and see what’s working…

12. Function …new packaging options both accompany and displace traditional formats
Orlando
Kansas City

13. Freshness …challenging venerable standards in center store
Orlando
Kansas City

14. Socialization …requires the right kind of influencers
Bentonville
Bentonville

15. Flavors …with structural innovation being used to communicate authenticity
Jane, MO
Jane, MO

16. Packaging Innovation and Retail Reality …pay attention to price point, shelving, operational ease …does your new format help establish a new price point?
Orlando
Kansas City

17. Packaging Innovation and Retail Reality …what does your packaging format require of operations? …how complicated is it to stock, shop and face?
Jane, MO
Jane, MO

18. Packaging Innovation and Retail Reality …how does the package impact carrying capacity of the shelf?
Chicago
Chicago

19. Packaging Innovation and Retail Reality …does the new package format drive price point evolution?
Chicago
Chicago

20. Consumer Preferences …packaging will drive preference when it fulfills an untapped need or drives new usage
Chicago
Orlando

21. Replenishment Efficiency …how many actions are required to stock your product? …does your product need help to stand up and get noticed?
Chicago, IL
Jane, MO

22. Retail-Ready Packaging is here, driven by three factors
Consumers need to instantly locate and identify products during ever-shorter shopping trips
Mobile is easy, instant and helpful
On-line products are always where you expect them to be—often in an automatic, pre-set list of repeat buys
Retailers need labor savings
Walmart is spending an additional $2.7 billion on in- store labor
$15 minimum wage would raise costs $4.95 billion/year
Stores need to refocus their associates toward customer service and away from low value activities
Source: Walmart, UC Berkeley

23. Questions? Ron Sasine ron@hudsonwindsor.com www.hudsonwindsor.com
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© 2016 Hudson Windsor, LLC