In today’s merchandising era where competitive brands sit side by side in Target and are listed next to one another on Amazon, it is more important (and more difficult) than ever for brands to find ways to stand out from their competition. Incorporating value-added services in a brand’s contract packaging process can give a brand an edge over its competitors.
Contract Packaging
Contract packaging, also known as co-packing, is the process of assembling a product into its finished packaging. This process involves adding one or multiple layers of secondary packaging (as opposed to primary packaging) to the product as well as any additional value-added services.
What is Primary Packaging?
Primary packaging, also referred to as consumer or retail packaging, is the packaging that is in direct contact with a product. Brands use primary packaging to protect and preserve a product. They are also used to contain products and inform consumers of health, safety, or instructional concerns.
There are many variations of primary packaging, and oftentimes, one product can have multiple components to its primary packaging. For example, a vitamin bottle has four parts for its primary packaging: the cap, the bottle, the label, and the foil seal.
What is Secondary Packaging?
Secondary packaging, also called grouped or display packaging, is packaging that holds together multiple units of a good. The primary use for this type of packaging is both for visually displaying products in-store as well as for logistical purposes. Since it combines several products into one purchasable bundle, stores are able to restock these items onto their shelves faster than its single-item counterparts. These products are also easier to ship. Typically secondary packaging includes retail-ready packaging or shelf-ready packaging that lets a brand stock more on a shelf, improve product promotion communication, and increase product visibility for a shopper.
Secondary packaging consists of cardboard packaging with a high standard of finished print on the outside. A box that holds 24 Band-Aids or the wrapping that groups DayQuil and NyQuil bottles together would be considered secondary packaging.
What are Value Added Services?
Value-added services (VAS), also called specialty packaging services, are any activity that improves the value of a product before it leaves the warehouse to the end customer. Retail cartoning, kitting services, shrink wrapping, and gift wrapping are all examples of value-added services. However, there are many more VAS services brands use beyond these four.
Value-Added Services: Building Brand Loyalty
With 65% of people as visual learners, creating brand loyalty is largely a visual process. Using value-added services like retail cartoning and display building are ways to not only visually attract new customers to your brand, but also to make your brand as recognizable as Cheerio’s yellow cereal box.
Retail Cartoning
Retail cartoning is the activity of putting a printed, laminated paperboard box around the primary packaging of a product. How this differentiates from secondary packaging is that this process only packages single products rather than bundles multiple products together. Brands use retail cartons to build better brand loyalty with recognizable and unique packaging.
If a brand manufactures their product in one location and commission a separate company to create retail cartons, they will often use a Third Party Logistics Provider (3PL) to package them together before an order is shipped to the end user.
Note: Whether you have retail cartons already created, or just have an idea of what they should look like, Jay Group is able to dive in at any project stage and make your vision come to life.
Display Building
Whether it’s point-of-sale displays, counter-top displays, or full pallet displays, having merchandising displays in retail stores attracts shoppers to your brand and helps you stand out from the competition. Best practices for designing retail displays are:
- Show, Don’t Tell – Set up product displays so that shoppers can visualize the items in their homes or on themselves.
- Group Like Products Together – Have complementary merchandise together whether that’s shaving cream with razors or paired pants and shirts. Also group similar products together whether that’s similar color, price, size, or type.
- Include Asymmetry in the Design – When our brains see something symmetrical, it’s easy to interpret, and the eye keeps moving onward. When it sees something asymmetrical, the brain spends more time processing, and attention stays on your product longer.
Value-Added Services: Sales Strategies
When new competitors enter the market with low prices, value-added services are a great way to offer customers more value, quality and actually increase product price.
Kitting & Bundling
Kitting and bundling is a process where several SKUs or products are combined together to create a new SKU. A DNA testing kit, a teeth whitening kit, and any subscription box are all examples of products that are kitted together. Bundles can be gift packs during the holiday season, birthday spa baskets in the health and beauty industry, and seasonal promotion kits like a back-to-school pack to help parents buy all the items they need for their kids. With bundling, the products are often also sold separately whereas kitted products are typically only sold as kits.
Many brands find that bundling allows them to extend their product collection without adding extra inventory. Combining existing products together gives retailers cross-selling opportunities, more products to market, and more web pages to optimize for search traffic.
A product bundle is good for your customers because they pay less for each item than what it would cost if they bought each item individually. For the retailer, the benefits are a higher average sale price and generally higher margins as the bundle is considered a new SKU.
Scott Chamberlain
Director of Business Development
Jay Group
Gift Wrapping
Gift wrapping is a simple way to boost average order value during the holiday season. This could look as simple as putting a product in a holiday-themed box with tissue paper to as intricate as including a handwritten letter and sprinkling in Hershey’s kisses.
When thinking about offering this option to customers, be aware that different items take wildly different times to wrap. A book or a box of chocolates may only take a few minutes to wrap, but a stuffed animal is more complicated and requires more time.
Deconsolidation
Product deconsolidation, unlike bundling and kitting, is the process of creating a new SKU by un-combining a product from a larger multi-pack or variety pack. For example, a supplement company sells 30-, 60-, and 90-day supplies of their product, but keeps getting requests for single bottles. Rather than ordering new inventory from their manufacturer, the brand can transform some of their existing 90-day supply bundles into a new SKU that is a single bottle. The newly transformed SKU answers the voice of the customer and satisfies the existing need in their marketplace.
Value-Added Services: Unboxing an Experience
The consumer’s experience with your product is largely influenced by their unboxing experience.
- Is the packaging designed with the brand’s identity in mind?
- How is your product being presented?
Packaging Design
The unboxing experience starts well before a package is opened. From the moment a customer picks up the package from their front doorstep, they are already forming an opinion on your brand. Everything from the type of box you choose, to the designs on the box, even to the packing dunnage used inside the box all influence a customer’s opinion of your brand.
| HiSmile, a teeth whitening company, ships its kits in die-cut boxes. Rather than RSC boxes, which are the traditional shipping box with four flaps, die-cut boxes are highly customizable corrugated cardboard boxes that can be designed to fit any shape or size. This makes unboxing their product similar to opening a chest full of treasure. |  |
| The Grommet, an online marketplace and product discovery platform, ships its products with specially corrugated graphics. They use their logo and tagline on the brown outside of the box to blend into the background when waiting on a doorstep. A customer is surprised by the pop of blue coating the inside of the box with empowering, bold words like “Creator” and “Innovator” along the flaps. |  |
| Who Gives a Crap, an environmentally conscious toilet paper merchant, rarely needs to use box dunnage in their shipping boxes. When they do, this brand uses paper dunnage rather than plastic peanuts or plastic air pillows. Customers are reminded of Who Gives a Crap’s eco-friendly stance, even in these small unconscious ways. |  |
Product Presentation
The second part of a quality unboxing experience, after product packaging, is product presentation. Just like with indoor merchandising displays, products should be displayed in ways that attract and engage the customer. This solidifies that the purchase was a good decision, reduces returns, and can even entice shoppers to post user-generated content on their social media of their newly unboxed purchase. Two key things to get right are making sure the product is visible and showcasing the product’s best features.
- Visible – The product(s) shouldn’t be hard to find. The last thing a brand wants is a piece of the product getting thrown out only to be needed later on. If your box includes small trinkets, put these items in the center, surrounded by other products. Wrap everything together with large tissue paper so there aren’t any small spaces for items to hide.
- Showcase the Best Features – Make sure the most exciting feature or product is the first thing a customer sees after unboxing. For apparel companies, make sure the shirt, pants, or jacket is folded so that any visuals, text, or images are facing up. For electronic companies, make sure the smartphone, camera or main electronic is viewed first after opening the box. Any accessories, documentation, and extras can go underneath or in a different section of the same box.
Note: don’t see the value-added service you need? Check out Jay Group’s Contract Packaging page for a comprehensive list of capabilities, or contact us directly with a specific request.
Learn More: Want to stand out from the competition? Let Jay Group’s design and production experts guide you on best practices for value-added packaging services or read more about Jay Group’s contract packaging services.
