Step 7: Cost to Implement Retail Ready Packaging
The most unavoidable but important question that will be asked when you bring up retail ready packaging is, “What’s that going to cost?” Often the answer is not as easy as calculating equipment and material costs but will depend on who is looking at a retail ready package solution and whose P&L’s the costs line up to.
There will be material costs and possibly equipment costs involved of course but it’s important to look beyond how much money you’ll dole out. Often cost offsets are achievable with an RRP implementation. These offsets can be realized through design, geometry changes that improve automation, help reduce labor, increase package strength to minimize damaged products or even transition to automated packaging instead of hand pack systems.
For example, a new package design that reduces each package size by 10 percent from the previous design can increase pallet packing, with the ability to add an additional layer. That extra layer on the pallet could mean fewer trucks, fewer warehouses and less handling to lower operating costs.
The benefits to an RRP re-design can extend to the retail shelf as well, which is quickly becoming a premium for brands today when many retailers are not growing and expanding like they once were. This means it’s on the onus of brands to maximize existing shelf space.
Every major chain is being more thoughtful and judicious about the expansion of their floor space. At the same time, there are buyers on the retail side who are concerned about getting every product on the shelf. For instance, redesigning a case that is an inch wider than the previous design may seem insignificant but for a buyer, but they begin to get concerned about significant loss in shelf and carrying capacity. That carrying capacity on shelves is critical in today’s retail environment.