Packaging: What’s Inside One of Marketing’s Top Touchpoints

Join host Greg Oberst and DCG ONE structural design director, Mike Lucas, on this episode of The Whole Idea podcast by DCG ONE for a look at the packaging and boxing industry. As a sector enjoying stunning growth, packaging is experiencing a new-found status as a lead brand touchpoint. Listen as Greg and Mike explore what’s driving sector growth and how marketers can create unboxing experiences that elevate customer delight and boost brand engagement.   

Other links you may like to check out:

About us - https://www.dcgone.com/about
Strategy - https://www.dcgone.com/strategy
Technology - https://www.dcgone.com/technology
The Agency - https://www.dcgone.com/agency
Let's connect! https://www.dcgone.com/contact

Email us: podcast@dcgone.com

Check us out on social media:
LinkedIN, Instagram, Facebook

Transcript

Stream date, November 13, 2024 

Transcript: The Whole Idea Podcast, episode 12:   

Packaging: What’s Inside One of Marketing’s Top Touchpoints  

Greg:  

It's often the first tangible contact between buyer and brand and its position as one of the top touch points in the customer journey has never been stronger.  

Hello, everyone and welcome to the Whole Idea podcast by DCG ONE. I'm Greg Oberst.  

My guest on this episode is Mike Lucas structural design director at DCG ONE, our subject matter expert on product packaging and boxing.  

Hi, Mike. Thanks for joining us today.  

Mike: 

Yeah. Thanks for having me 

Greg: 

Great to have you. Yeah, I took a peek at some of the data and statistics that you brought along to share and some of it's really quite jaw-dropping. Actually.  

Mike: 

It's interesting, isn't it?  

Greg: 

Why don't you share a couple?  

Mike: 

You know, just the US packaging market is roughly the size of $200 billion in 2024 with an expected growth rate of roughly 4% per year. But what I find interesting inside some of this data is what it doesn't say. And that is when a consumer goods product producer is looking to put their product into a package, the goal really is to keep that cost of packaging somewhat close to about 10% of the total cost of the goods.  

And I think that's kind of interesting to think about, that of roughly what $15 trillion in consumer spending that $2 trillion of that goes into some sort of secondary packaging.  

Greg: 

Let's make sure we understand what it is we're talking about when we refer to packaging.  

Mike: 

All right. So there are terms like primary packaging and secondary packaging. And then there might be logistics packaging that the primary and secondary go into so that during the shipping process, the products can arrive to the retail space in good order.  

Greg: 

I would call that shipping box.  

Mike:  

Yeah, absolutely. Right. Just brown corrugated shipping boxes. They serve a purpose. But secondary packaging is where a lot of brand identity can be formed around product packaging, product packaging, secondary product packaging.  

So I'll give you an example. A primary package is an aluminum can, right? There's an opportunity to print, you know, the brand on the aluminum can, but those cans are often sold in multiple units inside a folding carton that would be considered your secondary packaging. Another opportunity to enforce the brand and to leave your consumer with a positive experience.  

Greg:  

Let's go back to those numbers just for a few moments because I really want to understand a little bit better what's driving all of that growth.  

Mike:  

I think it comes down to five drivers, sustainability, food and beverage technology, the economy. And of course, e-commerce probably being the most recent and most familiar to any of the listeners talk about the effects that Amazon has had on our consumer economy.  

Sustainability is interesting. It's always prevalent, we're trying to get products in consumers' hands while minimizing our impact on the environment, right? So sustainability has always been a high priority for any packaging supplier to maintain a high level of sustainability. 

Food and beverage. I mean, it goes without saying it's a really great segment. And again, it the consumable of food and beverage, the package is used to deliver a food or beverage to a consumer and then it's recycled, hopefully not discarded but recycled. So the life cycle of that packaging is very short from the moment a consumer purchases it and then consumes it. So as you can see quarterly orders of food and beverage packaging, very consistent. And in fact, of all the other seg segments of packaging, probably the most consistent forecasted numbers in food and beverage, right? So it's just order after order, after order.  

In fact, the global food packaging market is projected to generate more than 394 billion in revenue in 2024.  

Technology, I kind of think ecommerce plays that part. But then, you know, I sort of think of electronics more in that space of a longer shelf life perhaps more of a unboxing experience opportunity, right? You receive your package of a piece of technology, and you begin to unbox it, and that producer creates maybe a layered journey for you to get to the product that you're so anxious to purchase.  

You know, you can't talk about that without mentioning the influence that Apple has had on that unboxing experience. I mean, they set the bar 20 years ago and lots of folks have just kind of been trying to replicate that model and boy do their products have a high perceived value in the marketplace then you know, the overall consumer economy, I think we kind of touched on that a little bit, but as long as the economy continues to grow, I think you'll see consuming increasing steadily over the years. Therefore, it's not difficult to make the connection that packaging is going to actually grow along with consuming.  

Greg: 

So what has all that growth done to boxing and packaging in terms of the role they play in the customer journey? You touched on that a little bit earlier, but I think it's worth spending a few minutes on now because yeah, this is becoming an important touch point.  

Mike: 

Yeah, you know it, well, when I think of the larger role that branding and marketing packaging play in the customer journey, I have to go back in history, right? A little bit and think about what was the consumer's journey you know, just a little over 100 years ago. I think it was quite different.  

Greg: 

I imagine.  

Mike:  

Yeah. You know, say the head of household or the oldest child of a household is handed a list of goods that they need to feed the family for the next week. They go into a, like a general store and there's maybe a clerk behind the counter, they hand them the list and the clerk goes to the bulk items and fills the list. They exchange money and they're off and going. 

Greg: 

A sack of grain.  

Mike: 

Yeah, exactly. Sack of grain, flour, sugar, all of those, right? And, and there's producers that are creating those bulk items, right? But as soon as the format of the general store started to shift into more of a self-serve marketplace, those products came from behind the counter, out in front, in into aisles.  

Now there's a brand opportunity to be placed directly in front of the consumer. You know, if you can catch the attention of the consumer rather than a clerk just saying whatever I have behind the counter, there's maybe five brands to choose from and the consumer maybe is attracted to the brightest colors.  

But it's interesting to think about that. It was more of a structural format of the grocery environment that started to drive a consumer goods packaging industry. 

Greg: 

Which has become pretty flashy and competitive in 100 years. Not to mention on the move right to your doorstep. And this is where that unboxing experience plays huge.  

Mike: 

It's critical. if you receive a package that you've anticipated and it's difficult to get to the treat that's in the center of that packaging. It might negatively affect how you feel about the brand in general. If that experience getting to this item that you so desire reinforces the brand and maybe even impresses you.  

You know, because I think of like a piece of electronics, you don't just get the electronics, you get the instructions, you get the charging cables, you get all the other things that go along with allowing you to utilize that product over its entire life cycle and you have to package that some way.  

And so if you just throw it in a box with a bunch of peanuts, you can imagine that the unboxing experience will be a little underwhelming. But if you layer perhaps, you know, layer the experience to where you're slowly revealing this desired product that you've purchased, creating some anticipation, creating some anticipation, you know, and there are professionals. I'm one of them always considering what that journey is and it's just like hitting that high note right at the moment when the product is revealed.  

And during that entire journey, you're reinforcing the brand. I mean, you might be incorporating some instructions on how to use this product and the consumer doesn't even understand that they're being trained as their unboxing. I mean, that's where you get into some of that psychology, right? The subconscious experience of unboxing a, a product. 

Greg: 

It's one thing for that product to land on your doorstep or put it in your cart. What happens next is critical to the brand experience and you've got to put some thought and strategy into that and the execution, you hit the execution just right. You might have loyal consumer for life.  

Greg: 

I get annoyed still when I get a box full of packing peanuts because I know how problematic that is not only for me to dispose of but for the environment as well. So I think about the brand in that context, I go what you're still using packing peanuts, come on now, assembly instructions. If they're not well written or well done, then I'm pointing the finger at the brand.  

Mike: 

Absolutely. And that's all part of the packaging instructions. You don't think about that, but that's part of the packaging experience and something you mentioned made me think about you know, the sustainability aspect, you mentioned packing peanuts, right? Or any type of petroleum-based plastics, product stabilizers.  

You know, there's some exciting stuff going on right now and it's been a few years. But there are companies that are developing Mycelium based product stabilizers to replace that good old-fashioned Styrofoam that you might find you know, framing each side of your, your electronics product to stabilize it inside the,, the folding carton or the corrugated box, right?  

Mycelium is fungus. In fact, we're mostly familiar with its fruiting body which is, mushrooms.  

It's, you know, one of the oldest organisms on the planet and it's now playing a much larger role in the development of sustainable packaging, which is far better for the planet. And I, I just think that's amazing and, and I really hope they continue to develop this technology to where it's widely used all the way through. There's really good investment in that space there.  

You know, some of the largest brands you know, Dell Amazon, they're all looking at this as a viable sustainable replacement for some of that product stabilization, which is so critical because the journey of getting the product from the manufacturing warehouse to the door in one piece, you know, the logistics can be pretty rough on that product when it's having its journey.  

So finding a sustainable solution to protect that product to just nail down that unboxing consumer experience. It's a lot of really exciting stuff is happening as packaging grows as that sector grows.  

Greg: 

You could see how the sustainability issue would also be growing right along with that.  

Mike: 

And it becomes more important, exponentially, more important, Mike.  

Greg: 

I want to go back to technology just for a bit. There are other aspects to technology that influence the way brands use packaging, right?  

Mike: 

Well, you know, one thing that comes to mind is digital integration, right? Substrates that are used for packaging are literally getting smarter R F ID tags are being integrated directly into the substrates. So if you think about that, you don't normally think about something that you can tap your phone against and then be delivered to a landing page of some sort that actually perhaps has animated video to help you unbox and experience your, your product that you just bought. But lots of, you know, technologies are being integrated into the substrates for like tracking data again, triggering landing pages with your smartphone. Those types of things are kind of blending the two worlds, right? The digital space where we're creating brands, we're getting brands in front of the consumer.  

And then that physical space where we're delivering the brand directly to the consumer offering technology that empowers the producers of these products so they can target their audience better or even retrieve data that reinforces a product is performing in the marketplace. Now, you're empowering both the manufacturer and you're delighting the consumer. And it's all just because you're integrating technologies into your substrates, technologies into your, into your products into the entire experience.  

So, you know, that's one bit of technology that comes to mind that I think it's really something to keep an eye on because it's going to grow, it's going to expand and I think even the type of data that you, we're going to be able to pull out and then empower, let's say our client who is the manufacturer of a product, let's say empower them to make better business decisions in the future, more data.  

Greg: 

And for the consumer, there's that idea that the box on your doorstep isn't the end of the customer journey. It's actually just a midpoint perhaps if you're the brand, you want that journey to continue.  

So there's QR codes and on the packaging or the inserted materials that as you mentioned, consumers can go to a landing page or some other experience, pick up the journey in the digital realm, order another product, you know, so all that stuff is represented and we're capable of doing that now on the packaging. Thanks to technology. So that's one aspect of technology.  

Mike: 

That would be one aspect. One of the other important influences of technology on packaging is 3D modeling. What I, what my role is and what I do in DCG ONE is building a bridge between our digital agency who are fantastic at maintaining brand integrity and things like that for clients. And then our physical space of where we produce these products. If you were creating a product visualization for a client and you want photo realism, it doesn't exist in the real world yet, but you want to show the client that it can exist in the real world. So you're trying to replicate the real-world environment in a simulation.  

So you create a 3D model. What I think is most valuable about the structural design team is that we are using software that creates a digital asset that can move down one path towards product visualization, previsualization of a product to help our client understand exactly what it is that they're purchasing and then that same software exports to a different path that feeds directly into our manufacturing process.  

There's no gap. It is the bridge. So you can 3D model and stage maybe Photoshop together a digital facsimile of a creative idea. But that asset doesn't translate directly into a produced product, which I've always found. It’s inspirational, I call it the digital bridge between the two services that DCG ONE offers. So I think if you're going to manufacture anything, you need to have a, a solid computer aided design software suite. And we fortunately have invested in one of the industry leading programs and it does a phenomenal job.  

Now, we use a whole suite of software right to support the effort in the 3D model.  

Greg: 

Given all the considerations we talked about, you can account for those things: How does the product sit inside the box and get there without breaking? How does the box unfold and how's the product extracted from the box? Those are all considerations that you can demonstrate in this 3D model.  

Mike: 

In fact, I'm glad you said that because this software simulates the real world and it starts with the substrate layer, the flat piece of substrate. Let's just call it paper to make it easier.  

Greg: 

Thank you.  

Mike: 

All right, I get technical so paper, paper has properties, and it has organic, it's made of, of organic fibers, right? It's wood pulp folding characteristics are, are part of that specific paper. The software simulates those constraints so that when we're designing this folding box experience, we get a pretty good idea of how it's going to function before we even get to the production environment, folding angles, complicated geometry.  

All of that, the software just empowers us to not only solve the challenge of stabilizing a product to get it to the consumer in one piece, but also to create a template for design iterations.  

Greg: 

Those designers you mentioned are just a few steps outside your office. And that production floor you mentioned is just on the other side of your office. So you're literally almost literally that bridge that you're talking about. But this feels like a pretty unique capability here at DC G one.  

Mike: 

I think you're right. As the agency continued to grow within DCG ONE, I became curious, I was like, how many other companies have such a robust agency and the manufacturing in the same building? And I don't think it's commonplace. I think you'd normally experience an agency and then maybe you have to go find a manufacturer. Well, that's what's nice about the DCG ONE experience is we're all on the same team. 

Greg:  

Mike, there's one other aspect of technology that I want to touch on and that is the delivery methodology that's evolving lately and driving the way you think about packaging. 

Mike:  

There's lots of exciting stuff going on in this space. It's not that you have to fit up a package inside a delivery truck anymore. It's the consideration you have to fit it inside a, a compact drone that's flying quietly overhead. We've partnered with a company called Zipline and they do drone delivery.  

A quick history of their company is they would deliver lifesaving medical supplies to very remote villages in Africa now domestically here in the United States. Now they're developing delivery techniques through drones to facilitate food, medical packaging, all types of consumer packaging being delivered via drone.  

But as you can imagine, it creates new constraints. And so there's an opportunity for, you know, a structural design team to come up with possibly novel form factors to fit inside these drones so that they can maximize the amount of products they can fit in the drone. Our sales rep here at DCG ONE Mark Woodruff has a really solid relationship with a local pizza chain, Pagliacci. 

Greg:  

Locals know that (brand) well.  

Mike:  

Yes, locals know that well, and Pagliacci and Zipline are working together And so there's a relationship between the three of us to develop some new form factors to help accommodate an exciting new delivery sector.  

Greg:  

Yeah, if you haven't seen a drone overhead yet in your neighborhood, probably one going to be there soon.  

Mike: 

It's really exciting stuff. So there's a whole another round of considerations for what you have to do and your 3D modeling, there's no rest. We're always being challenged to come up with new solutions. It's exciting.  

Greg: 

Now, we've talked about the production floor, Mike and I don't want to overlook the capabilities that we have down there as well. They're cutting edge and a place for manufacturing opportunities.  

Mike: 

Exactly. Cutting edge, you're always looking for opportunities for manufacturing efficiencies. In many cases, you can create margin or create value for the rest of the packaging's journey to the consumer. And when you invest in high-speed converting equipment and quite honestly, a talented workforce that put those two together and you're talking about a lot of capability. 

Greg:  

And a lot of capacity considering the volume that one has to do. If, if I'm a national or international producer of a product, that's a pretty hefty consideration. So you're looking for value.  

Mike:  

Absolutely. And, and honestly, you're in a competitive market and at every step of the way you're, we're focused on creating value.  

Greg: 

It's almost taken to the value that bundling brings to consumers, but it also works in B2B.  

Mike: Exactly. We're a bundled company. 

Greg: 

Mike asked you to bring along some best practices for optimizing packaging design and messaging. And we've touched on some throughout our chat here. But let's check off a few other important considerations on your list here, such as, know your audience. 

Mike: 

You need to know what your customers want and what their needs are. Of course, that's going to be reflected in your design and the experience that your customer has.  

Greg: 

Here's the next one. Don't get too complicated.  

Mike:  

Yeah, keep it simple. That's really important. You don't want to get too wordy. You know, your message can get lost in a forest of words and you know, don't forget to give it that high quality look.  

Greg: 

Next year we have, be honest and transparent.  

Mike: 

Well, you know, the key thing here is don't overpromise if you open the box, and the product doesn't deliver what the packaging promised you're in trouble.  

Greg: 

Yes. With that said on your list here, there needs to be some sizzle.  

Mike: 

You know, you got to get people excited, you know, purchasing or consuming is many times an emotional experience. So not just, you know, buying a product but also opening the box and using the product which you know, the end game for packaging is the use of the product and of course, buy more. 

Greg:  

And finally you have, and we touched on this, include a pathway to continue the journey.  

Mike: 

Yeah. Right. It could be something as simple as deploying a QR code to drive web traffic. So a consumer can become more familiar with the brand. The telephone number works social media, of course, that's a great way. And you know, you can't forget the product itself is just part of the journey and creating a relationship with the consumer. Honestly, you just got to make it great. 

Greg:  

Mike, thanks for your help in unpacking the packaging sector for us today. Great insight.  

Mike: 

Yeah. Well, thanks for having me. It’s been a joy talking about it with you.  

Let's do some key takeaways.  

The packaging planets have never been more aligned with ecommerce and a host of other factors combining to fuel robust growth in the sector. 

As brand touch points, shipping boxes and packages are playing greater and more critical roles in the customer journey.  

What with a spike in the frequency of deliveries and the integration of digits channels and there's no denying the influence of technology in the packaging business these days with transformational capabilities in design and manufacturing delivery and the customer experience all making for some exciting opportunities for brands and marketers.  

My thanks again to Mike Lucas DCG ONE's structural design director. If you have questions for Mike or would like to chat about maximizing the impact of your packaging program. Write to us today at podcast at DCGONE.com.  

Thank you very much for listening. Whole idea podcast producers are Mandy DiCesare and Kelcie Brewer. I'm Greg Oberst, watch this channel for our next podcast and more expertise, insight and inspiration for whole idea, marketing. 

Take care.