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Digital Packaging: A Recession Proof Market Opportunity

White Paper from WhatTheyThink April 29, 2009 Webinar

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Digital Packaging: A Recession Proof Market Opportunity

  1. 1. Digital Packaging… A Recession-Proof Market Opportunity Y By Barb Pellow ou may have noticed that many businesses are rethinking how they allocate their budgets, particularly where advertising is concerned. In fact, people typically tighten their wallets during an economic downturn, which means spending less on advertising. At the same time, however, advertising comes in many forms and media methods. More than ever, marketers are exploring ways to leverage the physical package to enhance their communication with consumers. Even in today’s economic climate, shopping remains a favorite pastime for many. With today’s youth plugged in and online, though, the advertising world that we have known is coming to an end. Nevertheless, consumerism—and with it the need to attract and engage buyers at the point of purchase—continues to flourish.All this may sound wonderful, however there are some limitations in the overall RISO offerings. The key limitation is quality that is not as good as comparably priced xerographic products, nor is it as good as the only equivalent inkjet printer, the HP CM8050/8060 MFP products. However the RISO ComColor products are much faster than these competitive products. The RISO printers also cannot print on coated stocks because of the oil-based inks they use. The Benefits of Effective Packaging Marketers may begin shifting more of their advertising budgets to packaging investments. For some companies, consumer packaging may be the only opportunity to really reach their audience. The package or label on the container that holds a product can be just as important as the contents—or more so. Since the package is the first thing that a customer will see, it offers a tremendous opportunity to engage a prospective buyer. The bottom line is that effective packaging can generate much more than a return on investment. I had the opportunity to moderate a Webinar with Lewis Goldstein (Vice President of Marketing at Kiss My Face) and Rosemary Joralemon (Director of Sales & Marketing for Info Label, Inc.) to discuss the changing dynamics © May 7th, 2009, WhatTheyThink.com. All rights reserved. Reprinted with Permission. Continued on Next Page
  2. 2. Digital Packaging… A Recession-Proof Market Opportunity Page 2 in packaging that are largely being driven by digital Label specializes in pressure-sensitive labels for personal technology. care products, household chemicals, beverages, gourmet Kiss My Face is an all-natural body care company food, and premium private labels. From a technology that is no newcomer to the recent explosion of “green” perspective, Info Label utilizes a combination of rotary products. The brainchild of two long-time vegetarians screen/UV Flexo/hot stamp presses and a Hewlett- searching for healthy body care products, Kiss My Face Packard ws4500 Indigo Digital Press HP digital press. was founded on a 200-acre organic farm in New York’s The company also recently installed an HP Indigo ws6000 Hudson River Valley. It is still located in the Hudson Digital Press. Info Label’s digital finishing capabilities Valley today, operating out of a former feed store and include rotary hot stamp, varnishing, lamination and converted barn. Featuring moisturizers, liquid soaps, rotary die cutting. shower gels, toothpastes, shaving According to Rosemary Joralemon, products, and deodorants, Kiss My “We target existing flexo customers Face offers a wide range of products “Our package with growing businesses. We offer that are designed to be effective and and labeling does digital as an outstanding cost-effective good for the consumer. According or cost-saving option for mockups to Lewis Goldstein, “Kiss My Face most of the work to and prototypes, new product launches has over 200 SKUs of natural and or pilots, seasonal SKUs or products, organic body care products. We make attract attention to or everyday product decoration. As everything from head to toe with a our independent, our customers’ businesses grow, we few stops in between.” can transition their labels from the natural, and organic ws4500 to the ws6000 or to a flexo As the brand owner, Goldstein is very press, according to their needs.” focused on “packaging that works” image due to our and digital printing provided the Joralemon went on to say that the answer. “I need bright and vibrant limited advertising value proposition for digital is clear. “There is no plate cost, which is a colors,” he stated. “Our package and budget.” huge plus for start-up companies or labeling does most of the work to attract attention to our independent, new and unproven product lines. natural, and organic image due to Digital technology enables good our limited advertising budget. We also need the ability quality, lower minimums for the customer, and improved to change labels quickly, easily, and without high costs cash flow. The customer can print what they want, when because formulations are continually changing. Some they want it, and in the exact quantity required. Finally, of our 200 SKUs change twice yearly. Digital short run there is substantially less start-up waste. It is 50 feet technology enables our entrepreneurial organization to versus 1,500 feet for flexo printing for our six-color quickly and nimbly make the changes we need to make, work.” when we need to make them, and in the quantities we Beyond the benefit for customers, Info Label sees require. We play in a dynamic category, and digital tremendous opportunity for its own company. According technology gives us the edge we need to beat the to Joralemon, “digital accounts for 50% of our business competition.” today and that share is growing. Even more importantly, A Win/Win Situation for Marketers and Label packaging is proving to be recession-proof for us. In Converters 2008, our digital business increased 100% over 2007. In 2009, we anticipate 100% growth over 2008.” Based on these requirements, Kiss My Face turned to Ilana Weiss, its label consultant from Label Solutions. It’s Time to Re-Examine the Digital Packaging Weiss referred Kiss My Face to New York-based Info Opportunity! Label, Inc. to provide label and packaging support. Info Today, the cost-effective conversion of short-run © May 7th, 2009, WhatTheyThink.com. All rights reserved. Reprinted with Permission.
  3. 3. Digital Packaging… A Recession-Proof Market Opportunity Page 3 packaging is giving end-user companies a chance to customers to the nutritional information for the food they separate themselves from their competitors through are eating. Customers will be able to view the amount of custom designs at more affordable prices. People have calories in their meal, as well as the amount of sodium, fat, begun to see the value in short-run packaging. Today’s protein, and carbs. Information is available for individual technologies enable people to create multiple versions items as well as meals. Customers can also obtain allergy and customize, but there’s more. Today’s savvy marketers information (although this may come a little too late are exploring ways to transform the package the ultimate since you’ll only have access to it after you’ve purchased multi-channel document. your meal!). The possibilities are endless when marketers For example, Nestlé wanted to reinforce its Drumstick assess how to integrate QR codes with packaging—they brand name during the 2008 baseball season. The can provide links to coupons to expand share of customer company approached Atlanta-based Digital Printing and wallet or engage consumers in dialogues to learn about Imaging (DPI) for help. A baseball card offer appeared their buying preferences. on every package of vanilla Drumsticks in the U.S. The Package… The Ultimate Recession-Proof Digital from April through December 2008. Using its digital Document color technology, DPI produced more than 3 million In a challenging economy, print service providers and personalized youth-league baseball cards in an innovative marketers must re-examine digital packaging. Label sports-themed promotion with Nestlé Drumstick brand and package printing grows with the human population sundae cones. Through the program, consumers could and economic development, and it won’t be replaced visit a DPI-developed Web site, upload an image, enter by electronic documents. Most importantly, though, it a youth’s team name and player statistics, view a PDF has marketing space that can be leveraged to expand proof, and then order a pack of 16 cards. DPI and Nestle customer relationships. Personalized URLs and QR codes saw the benefits of a multi-channel approach for brand can be combined on packages, making them into much reinforcement—they used a printed offer on a package, more than product containers. These digital packages can an Internet site, and a baseball card to deliver lasting become the ultimate mechanism to build a multi-channel memories for the recipient. More importantly, in an relationship with consumers. environment where Nestlé is competing for shelf space in grocery stores, the company now has access to consumer names, e-mail addresses, and mailing addresses. This means that the firm can market directly to the consumer and forward them coupons for not just Drumsticks, but other Nestlé products. Packages Can Blend with Mobile Technology A new “QR Code” on McDonalds’ packaging allows consumers to pull up nutritional information on their camera phones. QR codes for McDonald’s are currently being rolled out in Japan. Similar to bar codes, QR codes are printed codes that can be scanned by many mobile phones with embedded cameras. All sorts of information can be packed into these little codes, including the company’s Web site, the amount of calories and fat in a Big Mac, or a company’s contact information on a business card. Scanning the QR Code on any of 19 sandwiches, 8 sides, and 5 salads from McDonald’s brings up a URL that takes © May 7th, 2009, WhatTheyThink.com. All rights reserved. Reprinted with Permission.

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