One of the worst fates a package can suffer is to be rushed. Early discussions with your packaging manufacturer can positively affect the package design and increase the chances of product success. When packages do not meet performance expectations or have structural deficiencies that could have been avoided, disappointment will occur. With proper planning, all package performance, merchandising, and brand objectives can be met.

What is the Best Package Design?

The best package design not only complements and protects the product it contains, but also performs the necessary transportation and retail objectives for a product. Great package design can influence a shopper’s purchase at the point of sale. Shape, size, color, and material use all factor into a good package design.

Secondary considerations to the package design are the merchandising systems and any retail requirements a package may have. Too often, the package design is missing one or more of the functional requirements and that omission leads to a lackluster experience for the consumer or a disappointing performance for the retailer.

Having a packaging professional who has a clear understanding of the category and competitive landscape will increase your potential for a successful package. When all packaging functions and the environment are considered with package development, packaging has the potential to influence the buying decisions of the consumer.

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Bob Kollet is the Director of Merchandising and In-Store Services for The International Trade Group, a full service, end-to-end sales and marketing firm that provides global manufacturers with a step by step process designed to bring their products to the North America Retail Markets. itg offers global manufacturers logistical, tactical, and sales marketing expertise in retail consumer package goods and commercial professional classes of trade. itg guides manufacturers the total selling process to ensure your products reach the shelves of all types of North America retailers and the shopping carts of their customers. Bob can be reached at 410-741-1644 or at rjkollet@itgsourcing.com.

Since the financial debacle (or “correction” depending on who you ask), retailers and suppliers have been scrambling to identify new consumer trends to stay in front of the competition, retain customers, and most importantly, capture market share. Capturing market share has recently taken a back seat to most retailers, as they are concerned with promoting the “value” image to consumers. To that end, they are striving to provide lower retail prices across the board, in all product categories. In doing so, they are giving up significant margins and profit dollars on key merchandise (and have been since 2008).

How does this impact a Global Manufacturer in a North America Retail Market?

Price pressure from the consumer is passed along to the retailers, which the retailers pass along to the suppliers. This has sparked a line review frenzy unlike any I have ever seen. Retailers are putting pressure on the best and the worst of suppliers to lower costs and share in the margin losses game. The problem for global manufacturers is that the manufacturing community is being hit, at the same time, with raw material and labor cost increases, currency fluctuations, and a declining US dollar. Given those factors, it is difficult for even the most valuable long term suppliers to avoid being seriously squeezed.

Retailers are firm about lowering costs and their cost out initiatives will prevail. So if you’re a newcomer to the supply side of retailing and are invited to a line review with a big box retailer, be prepared to sell your goods at minimal margins. As much as you may be able to provide “value added products” to the retailer, this economic market is making them consumed with one thing… Price. Retailers will give suppliers the standard story line for suppliers among which is that suppliers must look at volume as something that just keeps your machines running and cover your overhead so you must look elsewhere to find more profitable customers.

Chinese-made products continue to dominate North American Retail Shelves… for now…

China continues to dominate the supply side of goods sold in most retailer stores in North America. That said, countries like India and Vietnam are threatening China’s position and quickly developing infrastructure to compete with China as alternative low-labor-cost manufacturers of goods. North American retail global sourcing offices are reaching out to these underdeveloped nations, making contact with potential suppliers and putting in the framework for future supply opportunities. Currency valuations are still paying a major role in the global flow of goods from continent to continent and the US has taken the lead to level the playing field with counties like China (who are deliberately devaluing and suppressing their currency (RNB) to capture world trade) by passing recent legislation to apply tariffs to goods coming in from those counties practicing unfair trade through currency manipulation. Although many believe this will create a trade war, many also are of the opinion that we are already in a trade war and that this is just one of many battles yet to come. Many counties are feeling the pain as their economies have been devastated by these trade policies and they are looking to the US to bring back some balance in world trade.

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Andrew Gaeta is the president and founder of The International Trade Group, a full service, end-to-end sales and marketing firm that provides global manufacturers with a step by step process designed to bring their products to the North America Retail Markets. itg offers global manufacturers logistical, tactical, and sales marketing expertise in retail consumer package goods and commercial professional classes of trade. itg guides manufacturers the total selling process to ensure your products reach the shelves of all types of North America retailers and the shopping carts of their customers. Andy can be reached at 410-741-1644 or at andygaeta@itgsourcing.com.

On-boarding Can Be Overwhleming for New Suppliers

If you are unfamiliar with the onboarding systems, the process can be overwhelming. There are several departments that need to be contacted simultaneously and forms that must be filled out with complete accuracy. Recently, I heard a story that unfortunately occurs all too often. After having a product accepted by a major big box retailer, the manufacturer began the onboarding process. This being their first time, they were immediately overwhelmed by the sheer volume of forms and detail of questions. Many of the questions they couldn’t answer because they didn’t understand the question! What could take as little as a week, dragged into a two month process and at the end the manufacturer found out that they had not contacted the transportation department and therefore could not ship directly to distribution centers. Purchase orders had to be cancelled and the product was put onto the back burner.

Product On-boarding Best Practices

To avoid being part of a disheartening experience like the previous one, take a few pre-emptive steps:

• Information Gathering - Gather all insurance and bank account information in advance. When signing the initial agreement, most retailers want this type of information. Make sure your insurance meets the minimum requirements for your industry.
• Team Assignments - Decide who will be part of the contact team for vendor portals. It is important that you have a team leader, this person should be aware of what each team (EDI, Transportation, Marketing, etc.) is doing during the on-boarding time so that nothing gets missed. They will also be the person to alter the portal in the future, attend training for the retailer, etc. Assign someone that is flexible, yet pays attention to detail.
• Test the Retailer’s System - Get your Electronic Data Information (EDI) team to undergo tests of their system while you work on uploading images and writing copy for the product. Most retailers now use electronic systems to place and track orders, your company’s systems will be tested to ensure that they can communicate with the retailer. By doing this step simultaneously, you will save time in the long run, especially if there are errors.
• Review Requirements and Communicate with the Retailer’s Transportation Team - Contact your transportation department and send them over all relevant information for transport. Although retailers have similar transportation guidelines, each one has some specific requirements that the transportation team should know about. Most retailers provide material that can be read in advance. Make sure that you communicate what your shipping abilities are, eg. direct to store, to distribution centers only, to warehouses only, all of the previous, etc.

Don’t be afraid to ask questions! Although retailers are similar, each one has their own unique system and you must not be afraid to say I need some help. Letting your buyer know from the beginning that you are new to their system will give them a heads up to make sure you follow every step of the process.

It takes a lot of patience to maneuver these systems. To put the process in perspective, you can think of a maze. Everyone eventually finds their way out of the maze, but the person who has gone through before finds their way out much more quickly. As your sales team has more and more successes, you will become more familiar working with on-boarding systems. The biggest key to making it through the onboarding process is to know that you will make some mistakes. The good thing is that you will also correct them!

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Priti Mathur is the Director of Global Business Development for The International Trade Group, a full service, end-to-end sales and marketing firm that provides global manufacturers with a step by step process designed to bring their products to the North America Retail Markets. itg offers global manufacturers logistical, tactical, and sales marketing expertise in retail consumer package goods and commercial professional classes of trade. itg guides manufacturers the total selling process to ensure your products reach the shelves of all types of North America retailers and the shopping carts of their customers. Priti can be reached at 410-741-1644 or at pmathur@itgsourcing.com.

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