Brands push into personalised packaging
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A 400g bag of Oreo biscuits retails for $1.99 in the US, but put the same cookies in fancy wrapping with a customised message and hey presto — customers will pay $10 for a “personalised” product.
“That’s value creation, and that’s all unlocked with digital,” said Dion Weisler, chief executive of HP Inc, the personal computer and printing company.
Mr Weisler was touting the virtues of digital printers on the sidelines of Drupa, “the Olympics of printing” conference that took place in Düsseldorf this month.
Digital printing was developed in the 1990s, but only in recent years has the technology improved for it compete with analogue presses in price and quality.
This means consumer goods companies are experimenting with personalised labelling for their products courtesy of digital printers. Think jars of Nutella, with your name on it.
At Drupa, digital printing could be found on everything from personalised children’s shampoo bottles to high-end perfumes.
Each brand is hoping to replicate the success of Coca-Cola’s “Share A Coke” campaign, which began in 2011 and involved HP digital printers putting people’s first names on billions of bottles and cans. Among other things, this campaign helped revive Coca-Cola’s stagnant sales in Europe.
For Mondelez, the maker of Oreos, the personalised packages were its first direct-to-consumer initiative in the US. “We had a great response, including two marriage proposals — they both said yes,” said Valerie Moens at Mondelez.
“Once people arrived at the Oreo [web] site, purchase conversion was three times higher than the industry average.” The project is now running in China in collaboration with ecommerce group Alibaba.
Mondelez declined to comment on how it must pay for the customised packaging generated through digital printers, but an industry expert said it would be “well over double the price” compared with analogue equivalents.
However, labels generated by digital printers are generally less expensive than those produced by analogue methods for jobs of less than 3,000 metres, said Bob Leahey, associate director at InfoTrends, a market research firm. For mass runs, analogue is cheaper.
Short-runs are rising in popularity as brands engage in a war for shelf space by tailoring products by region, ethnic group, gender, family size and language.
Digital printing remains in its infancy in packaging, but is more mature in commercial printing — producing books and magazines, for example.
Last year it accounted for under 3 per cent of global printing and packaging by volume. But by value it was worth $111bn — amounting to a 15 per cent market share, according to Smithers Pira, a consultancy.
Smithers forecasts growth this year of 8 per cent in commercial printing involving digital printers, but more than 20 per cent in packaging.
In the most successful cases involving brands and digital printing, customers have queued to pay higher prices for special packaging.
When Melbourne department store Myer offered customised jars of Nutella for A$12.95 each last December, they sold more than 400,000 across the state of Victoria and it became the top-selling item for Christmas.
Ben Perkins, director of consumer research at Deloitte, said the practice of turning everyday humdrum items into personalised gifts is “quickly drifting into the mainstream”.
For the moment, customers are willing to pay more for these products, but at some point they may question whether the higher costs are justified, he added.
Jake Grant, analyst at BMI Research, warned that brands’ pursuits of personalised marketing campaigns were mainly short-term moves, and not a panacea to boost growth. The more the campaigns were used the less effective they might be, he added.
This may explain why some brands are now using digital printing to move away from personalisation to randomisation. In Israel, 2m Diet Coke one-of-a-kind bottles were produced using an algorithm in the printing process.
Among the most effective users has been Kraft Heinz. Its cream of tomato soup costs 50p in a UK shop, but customers are happy to pay £2 or £3 to send a customised “Get Well Soon” can — still cheap enough for the company to claim it costs less than a card.
“The only problem is that it takes three to five days and by that time you are either well or dead,” said Sean Smyth of Smithers Pira. “But it’s the thought that counts.”
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