Shelf-ready packaging

Wednesday, 12 March, 2008

For retailers, the shelf remains the key interface with customers. It's here that consumers decide which products to put in their trolleys. 70% of purchasing decisions are made at the point of sale (POS).

For this reason, merchandise presentation has in the past few years become a vital aspect of retail logistics. Taking their cue from shelf stacking, numerous solutions in the fields of shelf-ready packaging (SRP) or retail-ready packaging have been developed, all with the aim of dealing more efficiently with the small amount of space on shelves.

The topic of shelf-ready packaging is of international significance. In many countries, serious consideration is currently being given to how retailers' internal logistical tasks can be executed effectively and thus cost-efficiently.

As a rule, retail-ready packaging can be handled easily and above all without any equipment. It also has a high impact on shelves - in other words, it functions excellently as an effective display - and it is no trouble to dispose of after use. The packaging is optimised in terms of unit dimensions, logistics and sales quantities. Information provided on the packaging allows retail staff to quickly capture and categorise the product. Aside from ease of handling, a basic robustness is required so that a product unit is able to withstand stresses and strains it may be subjected to in logistical processes and reach the shelf intact.

Once in the store, retailers expect packing and replenishing product stocks to be a cinch. One movement should suffice. The sparing consumption of materials and consideration of reusable transport packaging solutions are environmental aspects that should not be underestimated. The highest priority, however, remains the customer: getting them to reach for the shelves calls for a design that can be taken in at a glance, highlights the product and is in line with the intended use.

Improvements to the flow of information along the entire length of the logistics chain right up to the consumer is fundamental to efficiency. Enhanced shelf-life identification, for example, makes it easier for retail staff to minimise stock losses. Reductions in instances where stock runs out help to keep customers loyal to brands, especially as being forced to choose an alternative carries the risk of customer churn for the manufacturer. According to GS1 Germany, 70% of shoppers who buy another product as a substitute are satisfied with the alternative. When an article is out of stock, 37% of customers respond by purchasing a different brand, 21% go as far as moving on to a different store. 9% simply don't make the purchase. Only 17% return again at a later date. In other words, lost opportunities mean that two-thirds of shoppers won't return for the item.

Consequently, the Dortmund-based Fraunhofer-Institute for Material Flow and Logistics (IML) has pared down the list of requirements to five key points:

  • Easy identification, ie, the easy recognition and capture of key logistical data sets via barcode or, increasingly in future, RFID. Key information includes product description, number of units, quantity per pack, variant and expiry date. All of this must be displayed on two sides of the transport packaging. Also essential for staff are visual product identification and the product packaging's ability to stand out strikingly on the shelf as this triggers the decisive impulse in consumers. Solutions developed to date are exemplary in that these criteria are implemented 100%.
  • Easy opening means first and foremost easily understood instructions on how to handle the display packaging. Here, the use of pictograms has proved the tried-and-trusted method. One staff member should suffice for handling the merchandise and should not require any assistive equipment for stacking the shelves. No sharp corners or edges should pose any risk of injury during or after opening the transport packaging. There should also be no potential for damage to the SRP or product packaging. Within these requirements, there should still be sufficient freedom for design engineering innovations. To date, only every second solution succeeds in meeting these criteria to the full.
  • Easy shelving refers to ease of handling as a result of dimensions, handling aids such as holes for gripping as well as a maximum weight of 15 kilograms per loading unit. Naturally, the items' stability and rigidity after opening the transport packaging must be beyond question. Transport units should correspond to the quantities required by retailers and likely to be sold by them within a sales period. Last but not least, the packaging must fit the size of the shelf. Industry has done an exemplary job of meeting these needs - fulfilling them 100%.
  • Easy disposability encompasses the disposal phase and is not limited solely to mono-materials in packaging and packaging components, for example, the label which should consist of only one material. Flattening the packaging should also be an economical process. Here, it helps if specific instructions are provided. In this context, compound materials are generally regarded with disapproval. In contrast, reusable solutions are a feasible option. Reusable transport packaging is stackable and should ideally also provide greater efficiency on return through a reduction in volume. It goes without saying that domestic regulations must still be complied with even when goods are traded internationally. With an 80% implementation rate in SRP, achievements in this regard are impressive.
  • Easy shopping targets consumers. For them, it's important that key information on the product packaging is not hidden by the transport solution. Easy removal and replacement allow 'king customer' to evaluate the offer closely. In the past, transport packaging also served additional sales functions. While multi-colour versions are not yet the norm, already every third transport package in Germany is printed with more than one colour and this trend is really taking off, as will be highlighted at interpack 2008. Company and product logos are the minimum in presentation. Special attention is given to SRPs that are partially empty because, even when the first packs have been removed, an appealing impression should still be created. Visual gaps in the overall appearance created by missing products should be avoided if possible. Here retailers expect more, as only 75% of these criteria are being met so far.
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