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Poor package design is costing marketers more than $2 billion in U.S. sales as consumers are accidentally reaching for copycat house brands that are meant to look like the well-known branded products.
According to a new study by strategy and design agency The Brand Union, 70% of consumers said they had purchased the wrong product in a supermarket in the past year. Some 60% said they had trouble differentiating products on a store shelf due to the packaging. The most confusing categories: canned goods; cold and allergy products and hair care items. (Of the 23% of consumers who said they were confused by the canned goods category, 42% said they ended up purchasing the wrong product.)
Copycat packaging tends to be the biggest factor when it comes to accidental purchases. According to the study, half of consumers said they accidentally purchased the wrong product because they were misled by the color or name of the imitator. "The biggest problem is happening when you have copycat brands, and weak design in the category in general," JR Little, a senior strategist at Brand Union and one of the study's authors, tells Marketing Daily.
While many consumers said they were fooled by the packaging of store brands in particular, many retailers are looking to give house brands a brand identity (Target's Up and Up, or Wal-Mart's Good Value brands), which may change the equation, says Brian Rafferty, executive director of research and strategy for Brand Union and another author of the study.
"Many store brands are moving away from the copycats to their own brand identification," Rafferty says. "Shoppers are now aware enough of store brand quality that they don't have to rely on copycat [packaging] for accidental sales."
Meanwhile, established marketers looking to change their package design may want to tread carefully. As Tropicana learned last year when it changed its packaging, only to find sales drop 20%, consumers often don't respond well to change.
In fact, more than three-quarters of consumers said they view package design changes as a "marketing tactic," while only 14% said it represented an improvement in quality. The lesson: Communicate the product and consumer benefits to a package redesign, Rafferty says. "It's important to communicate the benefits of redesign to consumers," he says. "Also, what's the overall brand impression and is [the new packaging] still managing to convey what that is."
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First and most obvious: the cost in lost sales that could come from suing a good customer. But secondly, imitation is the sincerest form of flattery, and copycat packaging signals the consumer that the product inside is just an imitator. The real thing's going to cost a bit more. Finally, similar looking packages displayed next to the original serves to increase the "apparent" shelf space and overall presence of the national brand, drawing in customers who are actively searching for it.
The author correctly points out that some forward looking retailers have moved beyond copycat packaging. But our research shows that copycat design is still the dominant strategy in supermarkets and drug chains.
To national brands, sales lost due to the accidental purchase of private label equivalent product represent lost revenue. But not enough to shift the balance of the above equation. The cost to retailers of those customers who are misled by copycat design is in goodwill, and not enough to invoke a new approach to design strategy. Therefore it's likely that copycat packaging will be with us for a good while to come.