Premium packaging isn't always the answer! It is not something a packaging person would like to say, but it is true. For others, a high-priced box is a net negative for the product and/or business model. As much as it's worth knowing when to invest, it's also worth knowing when not to invest. These are the times when premium packaging isn't the answer.
If the margins don't work, create a new one.
Consider the case that is easiest to solve first. If your product's profit margin isn't fat, packaging is costing you money you can't afford.
Premium boxes are more expensive per unit, and the price is charged on all sales. If it's a low-margin product, packaging can slowly erode the profit margin. The box may look good, but if it leaves you with a small or no margin, it's the wrong box.
Premium is risky if its margins are thin because:
The packaging costs the profit.
All units cost $1.
It won't fit into the volume.
In some cases, a smart packaging move is just one that keeps your margin safe, rather than making a statement to a buyer.
When Customers Buy Often
Think about purchases and repeat purchases. When a product is purchased repeatedly, complex packaging can be considered a waste for the customer.
Does not require a keepsake box for every daily or weekly purchase. Excessive packaging is also a nuisance for customers who repeatedly reorder products. Luxury packaging is better suited to occasional and special purchases than to routine purchases.
Simple packaging is preferred for frequent purchases:
It is repeatedly thrown out by buyers.
Frustrates loyal customers.
It becomes quickly outdated.
A practical box treats the customer better than an elaborate box does, for a thing bought weekly.
When It's a Refill or Subscription
Think about the business model itself. There is an inherent logic to refill and subscription products, which is often at odds with high-cost packaging.
The whole reason for refilling is to reduce waste and the expense of rebuys. It doesn't re-establish that promise and doesn't save the cost it was supposed to save. The same is true with subscriptions, as the package comes in, comes in again.
When a refill or subscription is offered, it is advisable to be careful because:
Premium Boxes are Unworthy of the Refill Promise.
If it needs to be repeated, the price doubles.
Simplicity is better suited to the model.
The right packaging for the right business model is more important than impressing everyone in every box.
On the other hand, it sends the wrong message.
Think about the ethics that your packaging embodies. In some cases, the packaging itself undermines the brand value. In some instances, the packaging is counter to the brand image.
Heavy, multi-layered packaging is at odds with an eco-friendly brand, and consumers will notice. A value brand in an ultra-premium box confuses buyers about price. Luxury packaging that is misaligned with the brand's promises to customers does not enhance customers' trust in the brand; it hurts it.
When premium packaging misfires, it:
Contradicts an eco promise.
Confuses a value position.
Collisions of branding.
Any packaging that undermines the brand message is far more damaging than plain packaging.
The Product does not require protection.
Take time to consider the purpose of the packaging. Not all products require elaborate protection, nor can they be easily replaced if they are hard to come by.
A low-dollar, long-lasting product doesn't require a sophisticated box to get to the customer. It's a waste of money to spend extra on construction that wouldn't be necessary if it weren't necessary. The level of packaging should match how much the product needs protecting, not a wish to look expensive.
When the product is not:
Durable and resistant to damage.
Low in value.
Easy to replace if lost.
Protection should be in proportion to the product, not to the impression you want to make.
When It Slows You Down
Take time into account, which brands sometimes don't pay attention to. Quality packaging is more time-consuming, and sometimes efficiency takes precedence over quality.
A slow product introduction, rapid testing of an idea, or a short product lead time can all be compromised by packaging with long lead times for sampling and tooling. When it's a matter of getting to market, simpler packaging that speeds up shipping might be a savvy move. It's always good to upgrade the box once you have tested it.
When packaging is simple, speed is a winner when:
The timing of the launches is tight.
Always test out an idea.
Upgrades are not urgent.
When it comes to getting something out there and finding out what it does and what it doesn't, it's usually better than waiting for the "perfect box".
When You're Still Testing the Market
This case helps brands save real money. Investing in packaging is risky before the product is actually on the market.
Expensive tooling and high-quality material for an unproven product is a risk of real money on an unknown product. The simpler packaging allows testing the demand first, then investing in premium when the demand has legs. Once there's a proven product, a premium box is the right choice.
Try to use simpler packaging first, as it:
Reduces the initial risk.
Meets demand before big spending.
Generates cash to invest later.
Demonstrate the product, then make a show of it. The reverse is a risk of loss of money that might not be recovered.
Final Thoughts
While luxury packaging is a very strong weapon, it isn't always the one that is needed. It is a bad idea when margins are too thin, when customers purchase it too frequently to appreciate it, and if it is a refill or subscription model, as it is counterproductive.
It also goes astray when it conflicts with your brand message, when the product doesn't require protection, when speed outweighs polish, and when you're not sure if the product will sell in the first place. In all these instances, the better choice is to make simpler packaging.
The true art is creating the right package for the right product, the right model, and the right time. Buy high quality when it is appropriate, and don't hesitate to pass it up when it is not! Only when you know the difference will you know how to tell your expensive habits to go back to the shelf.
