The six retail formats in food retailing and their impact on packaging design
The food retail sector comprises a variety of retail formats with specific concepts and competitive factors. This means that brands are required to adapt their products accordingly, especially the packaging design.
In this article, we describe the most important features of the various retail formats and explain what impact they have or should have on packaging design.
Convenience Store
A convenience store is a store with a limited sales area in which everyday goods are offered. Examples include kiosks, station stores or even gas stations and late-night outlets.
Key competitive factors:
– Proximity to customers
– Long opening hours of up to 24 hours
– High price level
Effects on packaging design
As convenience stores live primarily from impulse and spontaneous purchases, it is particularly important to present customers with appealing, literally appetizing designs. Due to the limited selection, brands can concentrate on the typical category codes for beers, snacks, sweets, etc. when designing. The number of competitors in the store is so small that there is no need for an unusual concept. On the contrary, such a concept could even confuse the consumer and thus have an undesirable effect. In this respect, convenience stores are the perfect opportunity for cult products.
Discounter
The discounter focuses on a broad, flat product range and offers a wide variety of food and household items at low prices. Examples include Lidl and Aldi.
Key competitive factors:
– Focus on private labels
– Low price level
Effects on packaging design
The customers of discounters are largely obligatory buyers who are keen to purchase essential products of solid quality. For brands, the focus is therefore on using the packaging design to showcase the product benefits in the best possible way. This is achieved either through a me-too design, i.e. copying a reputable brand, or through an independent trademark. In view of the limited competitive situation, graphic differentiation from other brands plays a lesser role.
Supermarket
The classic supermarket also primarily sells food, supplemented by a few non-food products. As with discounters, the product range is broad, but comparatively much deeper. Examples include Rewe and Edeka.
Key competitive factors:
– Manufacturer and private labels
– Higher price level than discounters
Effects on packaging design
Supermarkets attract indifferent shoppers and shopping enthusiasts as well as obligatory shoppers. In view of this mix, the creative departments of the brands are particularly in demand here to reach the desired target group(s) with the packaging designs. It is extremely important for brand owners to focus on the brand and the product benefits when designing. This is the only way to stand out from competitors and private labels. Ideally, the clever use of all available elements in packaging design – shape, color, typography, features, etc. – creates genuine uniqueness so that your own products stand out from those of the competition and cannot be overlooked on the shelf. But be careful: if you stray too far from the respective category codes, you will usually lose out.
Cash-and-Carry/Self-service wholesale
The cash-and-carry market is characterized by a particularly broad and deep range of goods. Examples include Metro and Selgros.
Key competitive factor:
– Mainly retailers, bulk consumers and commercial users as customers
Effects on packaging design
In cash-and-carry markets, the focus is on larger purchase volumes and price. In order to convince customers, two aspects are particularly important: firstly, the respective standard item must be easily recognizable from other retail channels, but secondly, it should be offered in larger units and possibly also in a different shape. As pack size is a decisive factor in self-service wholesale, it is important to clearly communicate the volume advantage through the packaging design.
Hypermarket
A hypermarket is a combination of grocery store and department store. Examples include Kaufland and Globus.
Key competitive factor:
– Large selection and high convenience thanks to a broad and deep range of all product groups
Effects on packaging design
Brands are typically represented in hypermarkets with many varieties and sub-brands. For this reason, it is essential for the success of all products that the brand architecture is right. This also implies impressive variety differentiation and clear sub-branding. At the same time, the block effect of the various articles must be convincing. In short, brands are faced with the challenge of emphasizing the specific features of their respective products on the one hand and ensuring that their unity remains perceptible on the other. As shopping enthusiasts make up part of the hypermarket customer base, brands enjoy greater scope for storytelling than is the case in retail formats with purely compulsory shoppers.
Online trading
Online retailers sell both food and non-food products, although the range of fresh goods such as fruit and vegetables is sometimes limited. Examples include www.rewe-online.de and www.edeka24.de.
Key competitive factors:
– Home delivery
– Broad and deep product range
– additional delivery costs
Effects on packaging design
The block effect previously mentioned for hypermarkets has no function in online retail and is therefore not relevant. The direct shelf comparison with competitors is also logically not applicable here. Under the special circumstances of digital shopping, brands must ensure strong brand dominance. In addition, it is very important to make food tasty for online shoppers in the truest sense of the word through expressive visual presentation on the packaging.