Innovation, education to move US labels forward
The TLMI’s Annual and Technical Meetings focused on integrating social media and sustainability into label converters’ business models to help brands communicate with a new generation of consumers. Danielle Jerschefske reports on new routes to profitability
TLMI’s 2011 Technical Conference held in Chicago, Illinois, and its Annual Meeting held in Phoenix, Arizona, both this fall, were refreshing, well-attended events for the near 80 year old trade association. Both meetings sold-out and enjoyed a heartening balance of converter and supplier participants.
The Technical Meeting offered a business track for the first time which included in-depth discussion around Lean manufacturing and a strong panel session with leading industry players on aligning sales and operations through strategic planning.
Followed shortly by the Annual Meeting, TLMI organizers did a fantastic job of stringing through the important relationship between innovation, social media, sustainability and labels and packaging. For the first time in Phoenix, attendees listened to a designer and brand owner panel discussion on Future Product Technology and Design: Opportunities for Converting Solutions.
After participating in both conferences, it is evident that long-term success in the converting world will require a comprehensive understanding of social media channels, their use and value to consumers and brands, and the ability to link labels with the modern marketing tactics required to reach the new generation of shoppers.
Gerayln Curtis of The Chesapeake Group, a package design firm that ‘Builds Brands By Design’, talked about the ‘tsunami of consumer change’ with the onslaught of new wave young adult buyers and the rapid adoption of smart phones globally.
Apple launched its newest iPhone 4S on the Saturday of the Annual Meeting, selling four million in four days to the US market by the Tuesday morning of this new panel session. According to CTIA, the Wireless Association, there are 96 million smart phones in use in the United States as of mid-October 2011. Note too that 90 percent of the globe lives in places where they now have access to a mobile network.
Brands and their suppliers must ensure it’s their products that get put into the Millennials’ shopping cart, virtual or literal, Curtis explained: ‘The purchasing power of these young people is expected to surpass baby boomers.
‘It’s all about customization and choice, being interactive with these people and communicating with them through their channels. They’re not interested in ‘me too’ products. They’re interested in connectivity and sharing, exploration, so they’re willing to try new tastes and flavors. Design has a heavy influence on their purchasing decisions nine out of ten times. ‘Any brand that can truly reach the Millennials establishes an even playing field for the big and small brands.’
Kenneth Hirst of Hirst Pacific, a strategic design and global branding firm, echoed Hirst’s message on the importance for brands to be able to effectively communicate with modern consumers, saying, ‘Packaging is the primary vehicle for communicating a brand and a brand’s value. Holistic design of the package, including the label, influences consumer perception and must meet their expectations, hopefully by creating a meaningful experience.’
Modern converters must harmonize a brand’s various elements, which is why the US market has seen many label converters adopting new technologies in an effort to become a one-stop solution for clients. This includes the evolving digital world and the embrace of new channels of communication.
The message is clear: labels and packaging are the ideal ticket for brands to link the physical and virtual world together for today’s consumers.
Hirst encouraged the audience to take ideas to clients, showing them new materials, processes and technologies that will help brands tackle this new-age phenomenon. The packaging that brings new functionality and interactivity to the retail space will win the business.
Greg Sandusky, senior graphic and packaging developer for new products at Bacardi, talked about a number of trends that he sees in the beverage market, including customized and ‘collaborative’ graphics, up-dated bottle shapes and a new emphasis on sustainability. He said the company fully understands the potential for digital print technology to produce small lots of customized labels to bring new value propositions to the market via co-marketing and partnerships.
When talking about closures and innovation, Sandusky rhetorically asked, ‘How can we target the consumer at home? Closures are all about the handling, opening and pouring experience.’ He showed a few clips of bottle cap neck decorations and noted the aesthetic they can bring to the appearance of the packaging as a whole.
Encouraging listeners to take ideas to their customers, Sandusky said, ‘There’s a lot of creativity on the printer and converter end. And you’re the experts. We want to hear from you.’
He touched on shrink sleeves with their ability to decorate the entire container. He also talked about the value less commonly used label innovations can bring to a brand, such as thermochromatic inks, which have positively helped adopting brands increase market share. ‘Labels of the future’ were listed as programmable LEDs, electroluminescent conductive inks with a small power source, and the rising use of QR codes in its wide variety of forms.
The panelists acknowledged that innovation has a cost, but felt brands are willing to pay the premium in order to differentiate.
It was wonderful for TLMI to invite John Foley Jr. of InterlinkOne and Grow Socially to host a networking luncheon immediately following the design and brand owner panel. Foley is an avid Twitter user with over 8,500 followers whose two companies specialize in building new social-network-based marketing solutions. This enabled TLMI members to continue putting the pieces together. Foley took the mystery out of new communication channels like Twitter and YouTube, explaining how each can be integrated into modern business marketing and a company’s website. Foley said, ‘How do you humanize the brand? You expose the personal side of business.’
One critical point raised by Foley is that an audience is not going to be accessible on every channel. ‘You need to communicate back in the same channel that they use,’ said Foley. ‘The keys to managing a social media campaign within a modern printing business are the same for any other type of business. Build. Engage. Be relevant. Be consistent. Track/analyze.’
At TLMI’s Technical Conference, Steve Simske, an HP fellow and director of the company’s security printing and imaging division, gave his perspective on the functional future of labels in his presentation What is Electronic Paper – and why Should I be worried?
Since a lot of valuable details cannot be printed directly onto a label or packaging, ‘extended packaging’ allows brands to leverage the online world to deliver this information. GS1 defines extended packaging as ‘giving consumers access to additional information or services about products through their mobile phone’.
Modern mobile commerce solutions such as QR codes and 2D barcodes make linking between physical and virtual much simpler. In its Extended Packaging Pilot Handbook, GS1 says that as well as providing consumers access to additional information, extended packaging also has applications in track and trace.
Whitlam Label’s VP of sales and marketing, Alex Elezaj, agreed that labels are no longer merely for decoration. He explained that the 2D barcode is able to carry information in both directions, consumer to brand and brand to consumer, and can hold several hundred times more information than a typical barcode. Elezaj said, ‘These codes turn faceless visitors into identifiable profiles and allows brands to speak to respondents on a personal level.’
This is the way forward
Smart codes are already widely used in the Japanese market alongside NFC (Near-Field Communication) chips and adoption is spreading from Asia, through Europe into the US. Tesco launched its first ‘virtual store’ in South Korea subways where consumers can scan the 2D code on a wide variety of backlit virtual products such as instant noodles and bottled water. Once the order is placed, the goods are delivered direct to the buyer’s home within hours. Not only did the project help connect to the nation’s workforce – which is said to work more hours than any other country in the world; it helped the retailer break into a new market.
Yihaodian, an online supermarket in China, embraced the notion quickly after Tesco’s success and installed 15 virtual markets in Shanghai subway stations. Users need only download the store’s application to scan items and place them into their shopping cart for purchase. Procter & Gamble has jumped on the bandwagon, opening virtual markets with MALL.cz, the biggest online store in the Czech Republic.
Thomas Dahbura of Hub Labels encouraged the session’s audience to step into the shoes of a brand manager, asking, ‘What does the brand manager want the label to do? Be pretty? Play a game. Inform and educate the consumer. Protect the consumer?’ His examples of innovative labels included luggage tags, Oreo’s re-sealable package and label, and the growing interest and adoption of linerless labels for sustainability improvement.
Dahbura probed at questions converters must ask themselves before moving into the production of more innovative labels. Most notably: does this fit into my business? Are my quality systems in place to support this initiative? Will it (the code, the RFID tag, etc) work consistently?
Sustainability and Sara Lee
At the TLMI Technical Meeting, Steve Carter of Sara Lee talked about what the large packaged foods company is doing to be more sustainable. Carter said, ‘We are partnering with our suppliers to find continual improvement, long-term success and stability when it comes to the environment and packaging.’
The company has made the shift from bleached white stock pressure sensitive release liner in its label constructions to brown kraft stock, which offers a number of benefits by reducing total energy used during manufacturing, wastewater output, greenhouse gasses released and wood used, to name a few. Additionally, the kraft liner can be seamlessly integrated into corrugated box recycling streams. Carter explained that the company is closely evaluating packaging options that are scientifically proven to have less harmful impacts on the environment. One example is a move to mineral-based rigid packaging for a product, away from flexible packaging, to reduce the overall weight by 30 percent. The cost savings realized from this shift and others, like re-packaging pallets to fit more products, was 1.6 million dollars.
‘We are leveraging tools for improved decision making around Green,’ Carter explained. ‘If you want to be one of our suppliers and you don’t have a sustainability program, then, moving forward, you will not be considered.’
Sara Lee is in the process of creating its own packaging specification system and is looking to link-up with the Sustainable Packaging Coalition’s Compass software, developed in conjunction with EskoArtwork, that allows designers to rapidly prototype materials for a package and calculate impacts based on real product life-cycle data. The brand’s sustainable packaging specification system will break down each material by type and weight and software will be able to offer carbon footprint data.
Todd Buchholz, a former advisor to the White House on economic policy and current award-winning economics professor at Harvard University, talked to attendees at the TLMI Annual Meeting about the current state of global trade. He explained that he felt the US market was not headed for a double dip recession because consumers are tired of not spending and are eager to get shopping again – even though they have started saving more.
He advised the crowd to ignore all the hype that China is taking over the world, ‘because they’re not. The main reason is their demographics. They have too many young, single males and a large aging population. This is the Great Brick Wall of China that the nation will hit soon.’
However, he described education as the Achilles tendon of the US. A shame really, considering the thousands of outstanding universities we have in the country. ‘Education is the most important long term challenge for our country. We’re like the Jamaican bobsled team of education. The countries that harbor intelligence will prosper.’ There are a number of highly regarded universities with strong packaging and graphic communications programs, but most of these graduates move outside the industry. The North American label market needs to do a better job of reaching out to these young people, encouraging them to enter the narrower side of the packaging world. TLMI has its Young Leaders Organization, but it’s not doing enough to interact with universities, professors and the students, said Buchholz.
This article was published in L&L issue 6, 2011