Retail Darwinism: Why Packaging Design Must Evolve or Die
It might sound a bit dramatic, but in the unforgiving world of fast-moving consumer goods (FMCG), Charles Darwin’s theory of evolution has never felt more relevant! Failure to adapt to changing market conditions and consumer preferences can signal the beginning of the end. In such a competitive environment, how can brands ensure they don’t go the way of the dinosaur? In this post, we’ll explore exactly that.
The fight for shelf supremacy
Retailers are competing on multiple fronts. The first battle is getting customers through the door, an objective that often triggers fierce price wars (Asda’s recent revival of its ‘Rollback’ proposition drives this point home – since late January, they’ve slashed prices across almost a third of their entire range). The second is a rapidly intensifying power struggle between national brands and private brands, which – according to Circana – now command 39% of FMCG value share across major European markets, with an even more impressive 46% share by unit sales.
Why are they gaining ground so rapidly? Well, for one, retailers have cracked the code on agility, pivoting their ranges quickly to react to market conditions and changing consumer demands – a process that takes traditional FMCG brands much longer. Plus, they benefit from the brand halo effect (if shoppers trust a supermarket’s own-brand pizza, for example, they’re more likely to try its cereal, pet food or cleaning products). National brands don’t have this built-in cross-category credibility, which is why, say, Heinz’s dominance in baked beans wouldn’t necessarily translate automatically to success in frozen ready meals!
Survival of the smartest
When it comes to gaining ground in this challenging environment, there are several factors to consider. They revolve around one fundamental principle: refuse to stand still.
Gone are the days when shoppers stuck to brands simply because their parents did. Consumers are more adventurous and increasingly driven by new experiences rather than the comfort and familiarity of bigger names. They aren’t reassured by a recipe that’s remained unchanged for decades; instead, they want to know that products reflect today’s health standards, environmental concerns and flavour preferences. This is why retailers and brands can’t afford to stay still. They must innovate to stay relevant, whether that’s developing new products or reformulating and repositioning existing ones to capture high-growth opportunities, such as plant-based, high-protein, low- or no-alcohol, and low fat, salt and sugar.
Crucially, being the cheapest option isn’t enough anymore. Retailers have a great opportunity to build out their premium ranges to compete with challenger brands and leading nationals. But they must find ways to justify premium pricing, ensure their products stand out in crowded categories and build emotional or lifestyle appeal to compete with brands that have a strong identity. Instead of discounting, smart retailers are elevating the perception of their products by injecting personality into individual SKUs; crafting a story, tone and visual identity that lifts a product beyond its functional role, so it can command more attention (and margin) on shelf. In practice, ‘injecting personality’ into a product or range is a process that involves:
- Naming and tone: the perception of a range can be shifted entirely by its name and the tone that sets. Morrisons’ The Best and The Fresh Market’s Chef-Inspired ranges are great examples.
- Packaging design: by stripping away overt retailer branding, using premium cues and category ques (e.g., artisan fonts, provenance language and high-end photography) premium own brands can shine on shelf, justifying a higher price point.
- Positioning: savvy supermarkets make their premium products feel like they belong in a broader lifestyle context or could compete with leading branded equivalents.
Take Morrisons ‘The Best’ Olive Oil, which uses premium food cues like typography, colour palette and origin story to make it feel like a premium olive oil, not just the best one that Morrisons sells.
Future-proofing product portfolios
The FMCG landscape is set to become more competitive, more complex and more demanding. Shortened attention spans and omnichannel complexity mean packaging must work harder than ever – performing across digital touchpoints and physical retail environments, while meeting increasingly sophisticated consumer expectations.
The brands and retailers that thrive will be those that innovate, shifting their strategies to stay relevant as new trends emerge and ensuring that packaging communicates benefits, provenance and purpose – especially in premium tiers. In the world of fast-moving consumer goods, staying still is the fastest way to extinction!
Ready to future-proof your portfolio? Get in touch with our team to book a strategic review of your packaging.
