February 2019
The third moment of truth
Why sustainable packaging became a corporate necessity
By Ian Payne and Colin Strong
1
The Third
Moment
of Truth
Context
5,000 years ago, in the historical region of southern Single-use plastics have therefore become
Mesopotamia, the oldest existing drinking straw was poster children for environmental irresponsibility.
used to help avoid sediment, a by-product in the Already, four in 10 consumers report that they have
fermentation of beer. It was a gold tube, inlaid with started using fewer plastic straws due to recent
precious stones. It was reusable. attention on the issue, according to a recent Ipsos/
Buzzfeed poll.2
Habits have changed but today an estimated 390
million plastic straws are disposed of daily in the Nearly half support local governments banning their
USA alone,1 a testament to their enduring appeal. use. What’s more, nearly eight in 10 people globally
Taking 200 years to degrade, drink with one today believe we’re heading towards an environmental
and it may well be with us into the 23rd century. disaster unless we change our habits quickly.3
3
The Third
Moment
of Truth
Although only one aspect of a complex issue, repeated Increasingly, brands will have to operate in a more
exposure to highly impactful images challenge constrained environment with packaging material, for
consumers to consider the consequence of their example, coming under more scrutiny from government
choices. In what is now a highly emotive issue with and consumers alike. Fifty years on from the birth of the
growing saliency, manufacturers and retailers are being recycling symbol, we’re at a metaphorical tipping point
challenged to take leadership and demonstrate genuine where fundamental attributes of packaging design are
change, consistent with stated CSR objectives. challenged.
Packaging has long been the intersection between But necessity is the mother of invention and those
tangible and intangible brand assets – an expression of companies who grasp the opportunity to take
the brand through design and functionality. It plays the leadership have the potential for great reward. In a
critical role in helping protect, transport and preserve world of flat CPG growth, it is packaging which offers
assets which themselves have only been produced at a manufacturers real opportunity to develop meaningful
cost in terms of material, energy, time, labour, water, plant differentiation, driving distinctiveness, salience and
and animal resources. In that context, it is a necessary ultimately influencing choice.
and pragmatic investment: “typically, the energy used
to make packaging is 8% of the total energy used to
produce and deliver all the products that we buy.”4
Nearly eight in 10
people globally
believe we’re
heading towards
an environmental
disaster.
4
Issue 1: Taking Leadership On Environment
Recyclability is only one aspect of the product lifecycle, placed throughout an academic building. One set
but perceived environmental responsibility provides had no lids, while the other had a flap lid for trash, a
comfort for consumers that they’re doing the right lid with a 6-inch hole for recyclables and a lid with a
thing. We feel good about recycling and the large narrow slit for paper. The results were astonishing: Not
majority believe it makes a positive difference without only did the shaped lids increase correct recycling by
necessarily knowing how.5 The physical act of sorting 34%, but the amount of contaminants, such as food,
leads to reward. in the recycling stream collapsed by 95%.”6 However,
the evidence that these sorts of ‘nudges’ are able to
Behaviour can be nudged by carefully considered
change behaviour across a variety of situations remains
design. In a 2008 study, “two sets of three bins where
less than compelling.
Considering packaging from a consumer perspective …increasingly there’s a third moment of truth
Zero moment of truth First moment of truth Second moment of truth Third moment of truth
Memory saliency Stand out in store At home, on the go, in-use... Disposal and recycling
Tangible design features Ability to stand out from Physical characteristics Pack as a positive aspect
which trigger associations competitive set and functionality driving in product’s sustainability
usage and repeat
5
The Third
Moment
of Truth
“We can’t solve the plastic pollution crisis by which is slightly less bad i.e. that mass disposability
substituting one kind of unnecessary single-use is the problem. The shorter-term reality, however, will
plastic with another,” says John Hocevar, the ocean likely be experimentation with material and format.
campaigns director for Greenpeace.7 There’s a If these provide demonstrably better environmental
compelling argument that it’s not enough to replace outcomes versus substitutes, they should be
one bad-for-the-environment format with a format applauded. Consider three examples:
NEW COMPOSTABLE RETHINKING A
TECHNOLOGY MATERIAL WELL-KNOWN FORMAT
Newsworthy and consistent with “The ecologic packaging is the Uses glue instead of plastic rings.
corporate CSR manifesto. Same perfect articulation of our brand” John Taps into emotive issue (ocean
amount of product in a much Replogle, CEO Seventh Gen. The plastic waste). Delivers an audible
reduced format. world’s only commercially-viable paper click on separation.
bottles made from recycled materials.
Although there’s less scope to deliver significant And consumers give manufacturers credit. Recent
behaviour change through packaging design alone, each Ipsos community research in the US on the 2020
of these examples have the potential to stand out and Starbucks announcement highlights significant upside
ultimately drive change. They are newsworthy, as well as with 48% of people aged 18-34 being more favourable
being clear and plausible demonstrations of leadership. to the brand.
6
Starbucks Coffee
Follow
@Starbucks
Starbucks is finally We’re removing plastic straws in our stores
globally by 2020—reducing more than 1
drawing a line
billion plastic straws per year from our
stores.
in the sand and
creating a mould
for other large
brands to follow. New strawless lids to replace plastic straws
news.starbucks.com
Chris Milne, director of packaging sourcing for Starbucks
HOW CONSUMERS RESPONDED TO STARBUCKS’ ANNOUNCEMENT
TO STOP USING PLASTIC STRAWS AFTER 2020
Total Age 18-34 Age 35+
I felt much more favourably about the brand 20% 27% 16%
I felt slightly more favourably about the brand 18% 21% 16%
It did not change my impression of the brand 43% 36% 47%
I felt slightly less favourably about the brand 4% 5% 3%
I felt much less favourably about the brand 5% 3% 5%
I did not know about this announcement until now 11% 9% 12%
7
The Third
Moment
of Truth
Issue 2: Private Labels
Demonstrating leadership is critical because it’s the which brands have developed over many years with
category captains and other incumbent brands which much marketing spend are available for a significantly
have most to lose – “there’s a giant surgency in private lower price; readily triggered through packaging
brands, those are growing. And there’s a lot of surging design:
in new entrepreneurial companies selling online as well.
Little Mom and Pops are springing up everywhere. But
those big brands, they’ve got to do something.”8
The performance of private labels in Europe highlight
the potential for erosion of distinctive assets that
define national brands. Hard discounters like ALDI
and Lidl have aggressively leveraged design norms
to deliver category fluency. The positive associations
BRANDS
Like Brands.
Only Cheaper
is ALDI’s candid
summary of
a consistent
strategy. LIKE BRANDS. ONLY CHEAPER
8
“Like Brands. Only cheaper” is ALDI’s candid summary The development of private label offerings from more
of a consistent strategy which has helped nurture a established retailers like Tesco in the UK is testament
clear positioning versus more established retailers.9 to that impact:
TESCO VALUE (1993) EVERYDAY VALUE (2012)
Tesco was the first su- Relaunched to provide
permarket to launch products “that taste
a value range back in better, look better and
1993, the blue-and- are healthier”. Com-
white striped brand giv- bined with product line
ing customers an option changes too in a major
outside brands. relaunch.
EVERYDAY VALUE PLUS (2016) JACK’S (OCT 2018)
Tesco stepped up its Tesco unveiled its new
fight against German discount chain Jack’s
discounters Aldi and Lidl as the UK’s biggest
and revamped its bud- supermarket throwing
get range of value prod- down the gauntlet to
ucts with a new range of the discounters.
own-label “farm” brands.
Brands are dealing with multiple pressures and flat leadership on environmental sustainability. And there
sales are perhaps understandable in the context of a are clear indications that this is already a battleground.
competitive environment markedly changed compared In the UK for example, national retailer ‘Iceland’, which
to even 10 years ago. Private labels have raised the has 800 stores ‘pledged to completely remove plastic
bar in terms of design and performance, delivering packaging from our own label range by 2023 and are
deep associations with value. The danger for brands proud to be the first major retailer to do so.’10
is if hard discounters and retailers in general, take
9
The Third
Moment
of Truth
Issue 3: Digital And The Electronic Shelf
Digital offers huge opportunities to certain sectors services and personalisation. And for that L’Oréal is
in terms of engagement, which is impacting brand looking to new technology such as augmented reality,
development, activation and measurement. The China conversational commerce and artificial intelligence.”
Cosmetic and Personal Care market, for example, is L’Oréal’s acquisition of Modiface, which develops
predicted to be 40% online sales by 2021.11 custom AR beauty apps demonstrate their intent (as
we can see in the example below).12
Moving from a physical to digital environment
impacts the role that packaging plays but more Clearly, some categories benefit disproportionately
fundamentally, in embracing its potential, companies in what digital offers for engagement. How CPG
like L’Oréal are raising the bar in terms of “reinvesting brands transition from a heritage of brand blocked,
in the consumer experience through innovation, bricks & mortar distribution to representation in the
10
online shelf has the potential to further undermine
the distinctiveness of established brands. Not only
are physical features diluted online, but even the
label is increasingly simplified in an effort to drive
clarity and stopping power.
Finally, the consumer voice through online ratings
means the conversation is not only brand to
consumer but also consumer to consumer.
“Research shows that 91 percent of people
regularly or occasionally read online reviews, and 84 “A Mobile Ready Hero Image (MRHI) is a
percent trust online reviews as much as a personal representation of a real-world product that
recommendation.”13 may differ from a standard pack shot, but that
maintains the majority of the physical pack’s key
These are three issues facing brands today. The net elements of design, shape and colour, and is
result is that brands must be smarter in terms of therefore recognisable on a Digital Shelf. The
developing mixes which make sense to consumers image should include, or be closely associated
who are more than ever likely to be concerned about with, key elements customers are likely to use
environmental impact, exposed to increasingly when making a purchase decision/choosing the
sophisticated private label offerings and have more correct product from search results.”14
choice online.
11
The Third
Moment
of Truth
Development Framework
Ipsos research confirms an intuitive truth that elements. Packaging design testing is catered for
brands have a greater chance of success when by an abundance of methodologies with a focus
they’re supported by distinctive packaging which on evaluation and A/B testing. Change tends to be
communicates relevant benefits in a unique way. incremental as brands rightly guard the distinctive
assets which support automatic behaviour at shelf.
Success requires a deep understanding of motivations
as well as comprehension of the impact of executional With the issues described, packaging development
will be well served by leveraging insights which
recognise people as both consumers and citizens, by
understanding underlying motivations. Increasingly,
we must consider the degree to which the pack can
We must consider
communicate higher order meanings, such as brand
purpose and packaging’s role in the complete product
the degree to
life-cycle with attention to environmental sustainability.
Added to this is the requirement of packaging not only
which the pack to work in a physical environment, at the shelf, but
also in a digital context. Pack has a more complex role
can communicate to play in the customer journey and it is important to
explore the way in which it needs to fulfil this variety of
higher order objectives.
meanings, such as Behavioural science for
packaging evaluation
brand purpose and Research methods which promote natural responses,
packaging’s role in the context of realistic choice situations, can
evaluate effectiveness and recommend optimizations
in the complete of current practices and marketing collateral.
Semiotics plays a key role in design development,
product life-cycle. providing the cultural context to help understand
consumer reaction to the signs and symbols which
12
drive the overall effectiveness of design. Increasingly, The framework consists of:
behavioural science also emerges as a key discipline
to inform design decisions.
Heart
Applying a behavioural science lens can help identify
AFFECTIVE
the psychological mechanisms at work and further our
both sensory and emotional
understanding of the way pack influences attitudes experiences
and behaviours. Incorporating a framework helps
drive consistency across the organization as well
as raising awareness of the deeper considerations
Head
being made about design, particularly if the goal
is, for example, to activate higher order outcomes COGNITIVE
related to enhanced understanding of pack’s role in conscious mental processes,
problem-solving and creativity
environmental sustainability for example.
A ‘Five H’ framework can help pack deliver on these
ever more complex requirements. This is drawn from Hands
a theory of experience that has been developed by
Schmitt (1999). The starting point for pack design
BEHAVIOURAL
physical actions, lifestyles and
has a broader strategic underpinning – the desired interactions
outcomes rather than the design attributes. It offers
a consistent basis for comparing different packs
(both own and competition), which helps to identify
Herd
opportunities for differentiation. We can use it to
articulate the strategic requirements of the pack and SOCIAL
how these can be converted into design. Finally, it the social context of an experience
can be used to understand the role that pack plays
in the wider consumer journey.
Clearly each of these may have many distinctive
Hero
characteristics within them – so we use a design brief
which helps articulate the type of consumer experience ETHICAL
required of pack. Each has various aspects of design experiences which support ethical
outcomes
that can support the desired experience.
13
The Third
Moment
of Truth
The Ipsos behavioural science team has undertaken
research to examine the way in which various
aspects of design can generate positive outcomes.
By comparing to the context of the other choices Brands which
available to consumers, a given design is considered
against a desired outcome e.g. “I make responsible are perceived to
choices with respect to the environment”. This
framework accounts for the outcomes which are take leadership
already long established in branding (Heart, Head,
Hands) and additionally incorporates facets which in relation to
will play an increasing role in determining choice –
whether this product offers a better outcome in both environmental
a social and ethical context, versus other alternatives
in the consideration set. sustainability
This is important because design’s role is no longer
about driving standout, image, personality etc.
will benefit.
There is an opportunity for manufacturers to both
Manufacturers must increasingly demonstrate to
promote better understanding of the reason why a
consumers tangible packaging outcomes which are
particular material is used as well as providing more
understandable as a direct consequence of the CSR
transparency on the environmental outcomes related to
aspirations written in every annual report.
that packaging. Effectively, manufacturers will be well
For example, take the below context: served in getting ahead of a day where legislation might
require a packaging ‘health warning’.
82% of US adults agree with the statement Brands which are perceived to take leadership in relation
“I think manufacturers should actively sup- to environmental sustainability will benefit. For example,
port recycling initiatives for the products 48% of US adults aged 18-34 have a more favourable
they sell” [Ipsos research on 1,310 adults aged impression of Starbucks following their announcement
18 -65, November 2018] to remove plastic straws by 2020 [see page six].
14
Consideration of such issues within the broader The table below shows how one aspect of design
framework provides for a holistic view, but also will relates to aspects of the consumer experience:
help level set expectations of what is achievable.
Experience outcomes
Design Lever Effect
Heart Head Hands Herd
Visual Complexity Attention / Appeal / Comprehension High Med Med Low
Colour / Colour Embodiment Attention / Emotion High High Low Low
Logo Attention / Recall High Med Med Low
Typeface Recall High Med Low Low
Visual Cues Comprehension Med Med Low High
Material Perceived sustainability benefit Med Med Med High
Managing choice / navigation Preference / Comprehension Med High High High
Presentation design lever’s impact on shaping experience dimensions
Note that other aspects of design may also be covered We see that social behaviour (Herd) is less influenced
– such as the physical form of the pack etc. The point by presentation attributes. Instead choice architecture
is to level set how each aspect of design might affect – the way decision-making criteria is presented – can
the consumer outcome. have a significant effect on the way that choices
are perceived, and the degree to which people are
So, in this example above, we can see that there are
likely to share and participate in an experience.
many ways in which design levers can be used to deliver
Packaging which promotes interaction can have a
an emotional (heart) experience. A wide range of options
powerful impact on driving more cognitive attributes –
are available from typeface (example) through to colour.
processing of information, empowerment, developing
In the case of colour, research suggests that shorter
a sense of competence and mastery, while potentially
wavelength hues (e.g. blue) induce greater feelings of
changing consumers’ preferences.
relaxation than longer wavelength colours (e.g. red).
15
The Third
Moment
of Truth
The framework provides an approach for consistently extent to which aspects of the design are supporting
identifying the different elements of the ideal the consumer experience objectives. We then make
experience outcomes (across the H’s) and relating recommendations concerning the ways in which the
this back to the research literature to establish how pack can be optimised to best meet the objectives.
design can help to deliver that experience.
Pack development: The audit can be used to
Behavioural science can directly assist in the inform the development of new designs. These can
optimisation of pack design through Pack audits. be rapidly tested in digital environments, using a
Our audits begin with an identification of the desired variety of methods to report outcomes efficiently in
outcomes – what experience is the brand aiming to terms of time and resource.
communicate? Then, we review the pack to assess the
An example application15 was whether
a brand should decrease the size of
its bottle cap to reduce material usage
(saving money on production costs as
well as providing news to consumers
on plastic reduction). Several
disadvantages of using the smaller
cap were identified including: losing
visual attention space, decreases in
perceived volume, losses in findability,
and changes in product perceptions
due to category norms. Because of the
cost implications, we also proposed a
few ways to mitigate these potential
negatives of the cap change. Finally,
we recommended ways that these
changes could be tested experimentally
to assess consumers’ responses.
16
Pack Development – Example Methods
Shopper Labs remain the ‘gold standard’ and suited however valid in the large majority of cases and
for late stage validation particularly for highest risk Ipsos’ new Simstore platform for example offers
cases, or where material or structural innovation best in class 2D, 3D and 360 environments, getting
is difficult to render online. Digital representation participants ‘closer to real’.
of shelf, store and ecommerce environments are
Online 2D
Online 3D and 360
VR and AR
Shopper Labs
Discover Create Screen Validate
Go/No Go testing using
Provide guidance prior Enhance design process real or virtual shelves.
to development. Identify with a rich set of KPIs and diagnostics Incorporate behavioural
distinctive assets to integrated qual-quant to drive fast and and implicit measures for
help maximize memory tools and frameworks robust quantitative- deeper diagnostics. Test
and attention saliency. which leverage deep based decisions within functionality to ensure
Determine if pack drives design knowledge from competitive context. format innovation delivers
or undermines. equity. specialist facilitators. on expectations.
17
The Third
Moment
of Truth
CONCLUSIONS
The performance of hard discounters in Europe and If Tide’s new box is a precursor of things to come,
the evolution of private labels help provide context for then consumers will see genuine packaging innovation
why many established mainstream brands struggle for more often. Brands which deliver meaningful change
growth. As attitudes change globally, further pressure and do so without compromising benefits or price, will
will come from retailers making a more significant play be rewarded a competitive advantage.
on sustainability, providing another compelling reason
for consideration beyond value.
Manufacturers can and must demonstrate leadership
through action. Unilever, L’Oréal and Coca-Cola, for
example, are among 250 signatories who have pledged
to eliminate “problematic or unnecessary” plastic
packaging and move from single-use to reusable
packaging by 2025, to ensure all plastic packaging
Behavioural science integrates a strategic
can be “easily and safely” recycled or composted and
understanding of market dynamics with tangible
to increase the amounts of plastics reused or recycled
design guidance. Adopting a framework can help bring
into new packaging or products.”16
pack into a wider context and help avoid ‘scatter gun’
And there are increasingly more tangible initiatives recommendations. As the messages that brands need
which will demonstrate change to consumers. Tide’s to be communicating to consumers are increasingly
new Eco Box demonstrates how genuinely new higher order, the demands on pack design are greater
outcomes can be achieved driven by the convergence than ever. The marriage of behavioural science within
of significant drivers of change i.e. working in a wider strategic framework is ever more critical to
partnership with Amazon for streamlined fulfilment deliver successful pack design.
and providing consumers with a sustainability benefit
of reduced plastic usage. And, by cannily leveraging a
familiar ‘wine box’ format, Tide were able to clearly tap
into an existing functional expectation.
18
References:
1
Niraj Chokshi (July 19, 2018). “How a 9-Year-Old Boy’s Statistic 9
http://www.theguardian.com/business/2016/mar/21/tesco-
Shaped a Debate on Straws”. New York Times. revamps-own-label-range-fight-discounters-aldi-lidl
2
Americans in Favor of Limiting Use of Plastic Straws 10
https://www.iceland.co.uk/environment/
https://www.ipsos.com/en-us/news-polls/Attitudes-Toward-
Plastic-Straws https://www.statista.com/outlook/70000000/117/cosmetics-
11
personal-care/china#market-onlineRevenueShare
3
Ipsos MORI Global Trends 2017 – the biggest survey of its
kind https://www.ipsos.com/ipsos-mori/en-uk/ipsos-mori- 12
https://www.marketingweek.com/2018/07/03/loreal-drives-
global-trends-2017-biggest-survey-its-kind marketing-effectiveness/
4
Why products are packaged the way they are. INCPEN 13
https://www.inc.com/craig-bloem/84-percent-of-people-trust-
(Industry Council for Packaging and the Environment) online-reviews-as-much-.html
5
https://www.telegraph.co.uk/news/2017/09/25/eight-ten- 14
GS1 Mobile Ready Hero Images Guideline
people-believe-recycling-makes-difference-have-no/
15
pack shown is an example of the change discussed, but
https://edition.cnn.com/2017/05/18/health/psychology-of-
6
not the actual case assessed
recycling/index.html
16
https://www.proactiveinvestors.co.uk/companies/news/208043/
https://www.fastcompany.com/90208207/why-starbucks-
7
unilever-among-250-firms-to-make-plastic-elimination-
plastic-straw-ban-might-not-help-the-environment pledge-208043.html
8
https://www.packworld.com/article/trends-and-issues/e-
commerce/experiential-packaging-e-commerce?ajs_
uid=6799H8357367E4Z&oly_enc_id=6799H8357367E4Z&ajs_
trait_oebid=6890E1361578B3P
The
TheThird
Third
Moment
Moment
of
ofTruth
Truth
Ian Payne Global Service Leader, Pack Testing
Colin Strong Global Head of Behavioural Science
At Ipsos, we are passionate about helping clients identify, qualify, optimise
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