Packaging – Luxe appeal


Sales of luxury gift sets in the UK have dropped slightly, which may be attributed in part to the conservative packaging structure of many sets. Brands can maximise gift set impact and sales through the use of printing techniques like embossing, foil effects and varnishes on sleeves. Meanwhile, although sustainability is hard to pursue in an area where appearance is paramount, the use of sustainably sourced materials is growing

With budgets still tight, the need to increase margins as high as ever and sustainability playing a pivotal role, Stephen Shortland looks at the impact luxury gift sets are having on the packaging sector

Until recently, I like many others in the industry thought that the luxury cosmetics and fragrance sector was pretty much recession proof.

While tighter household budgets had resulted in high value luxuries such as holidays, cars and even new homes falling by the wayside, consumers were still willing to spend on smaller personal treats to brighten up the economic gloom. However even this most sacred of industries now appears to be feeling the brunt of tightly clasped purse strings.

According to a recent report from consumer market research company The NPD Group, spending on premium beauty brands is starting to fall. Figures from May show that compared to the same period in 2011 unit sales for skin care were down 0.8%, while the fragrance sector fared significantly worse with a decline of 6.4%. The prestige beauty market nevertheless managed to increase its overall value by 2.5% compared to 2011, reaching £106m, but the declining sales will still come as a reality check to many.

The report goes on to say that some of this can be attributed to a drop in sales for gift sets. It states that in 2011 many brands produced gift set ranges to coincide with both Valentine’s Day and Mothering Sunday but were left with egg on their corporate faces when they still had not shifted by May. Unsurprisingly, the shelves were pretty void of such sets at the same time this year.

One time of year when luxury gift sets remain strong is Christmas and for my company it is a market that plays a vital role in our business. But with sales in apparent decline, are we seeing a scaling back when it comes to packaging budgets?

Uniform packaging

In terms of actual packaging structure, the luxury gift set sector has always been a fairly conservative one. Look at the shelves of any retailer and you tend to find that the form of the packaging is normally uniform. A simple square box with a corrugated liner for strength is commonplace across the board for most edt and perfume products. A standard offer for Christmas might be a rigid board box with an insert and plastic dust cover.

When it comes to size, you also find that most products are pretty similar. Sourcing of materials is of course vital, but this unity when it comes to structure and size often provides a clear price advantage and means that more money can be spent on a premium finish, even if it produces other challenges regarding brand differentiation.

With a standard structure and size in place, you often find that the luxury element comes from the finish and, inevitably, the brand itself.

<i>The premium finish on Ted Baker’s simple square box will ensure the product stands out on shelf</i>

The premium finish on Ted Baker’s simple square box will ensure the product stands out on shelf

Printing techniques such as embossing, foil effects and varnishes all help to create a premium feel, as does the fact that the product is boxed in the first place.

The place where many brands have traditionally gone to town with luxury gift set packaging is on the plastic sleeves that are wrapped around the box. The industry has previously seen some very elaborate processes used on these, particularly with the heavy use of foil. One notable example of this was when Davidoff created the effect of running water on the sleeve. Another example comes from Calvin Klein, which saw us create a lenticular print effect without the use of the lenticular lens.

Perhaps it is a sign of economic uncertainty but printed sleeves are one area that has changed and continues to do so. Now more than ever we are being asked for sleeves made of clear plastic without print or design, helping to reduce costs dramatically.

I believe this requirement is partly driven by customer incentives introduced by many retailers at Christmas, with the three-for-two option being a classic example. Brands are basically being asked to give away a set of products for free, reducing margins considerably. As a result costs need to be cut elsewhere and it seems that many have opted to look at all aspects of their packaging and to ask whether all of the packaging that they currently use is 100% necessary.

Appearance vs. sustainability

Alongside changing consumer habits and financial restrictions, the issue of sustainability places further requirements on packaging designers.

Whereas many product sectors have completely reviewed and dramatically altered production processes to make their brands greener, I would suggest that the same cannot be said for the luxury cosmetics and fragrance gift set market.

This is an area where appearance is everything. It is about an aspirational product that invites the consumer to make a statement and buy into a projected lifestyle. It is a sector where aesthetics reign supreme and unfortunately that does not always go hand in hand with being overtly environmentally friendly.

<i>The use of elaborate printing techniques on the plastic sleeve of Live by Jennifer Lopez helps to give the product a luxury feel</i>

The use of elaborate printing techniques on the plastic sleeve of Live by Jennifer Lopez helps to give the product a luxury feel

Take packaging waste as an example. The sector does not appear to be overly driven by regulations and things seem to be justified by using the ‘luxury product’ label. Sometimes, I cannot help feeling that if similar waste happened when packaging an Easter egg for example, then the rule book would be dropped on you from a great height.

Of course recycled materials are available to create a structure for a luxury gift set. Recycled PET and boards with up to 100% recycled content can both be used but they tend not to be. Once again it comes down to aesthetics ruling the roost.

The perceived problem with recycled boards in particular is that they start out with a less than brilliant finish and are not the perfect bleached white that is generally associated with luxury. This inevitably puts a lot of brand managers off from the start, as the product instantly loses that all important shelf standout. The same can be said for the use vegetable based inks for printing. The finish is not great and they tend to be considerably more expensive.

You also have to take into account cuts that are being made elsewhere. I have already discussed the decline in elaborate print finishes on plastic sleeves, so with that already occurring, a further reduction in the finish quality may well be considered a step too far.

Let the pack do the talking

That is not to say that these techniques are not used. However, in my experience brands that go down this route have to invest heavily in marketing campaigns to create an eco back story in order to educate the consumer about the ethics of the brand and to make it recognisable among its pristine shelf mates. For many, that is simply not an option in the current climate and they are more than prepared to let the packaging do the talking.

As an example of the importance of appearance, I am aware of one brand that produced a range of male wash bag gift sets. Each bag had a wrap around it and there was so much concern that a wrap made of cardboard would become worn and damaged on the shelf, thus reflecting badly on the quality of the product, that they opted to use polypropylene instead – a material that is double the price of card and one that can be hardly considered environmentally friendly.

So far, I have painted a pretty grim picture of sustainability when it comes to luxury gift set packaging but I do want to make it clear that some steps are being taken to become more eco conscious.

Some brands have steered away from the use of recycled materials, as there has been some debate over the amount of energy that is used to actually recycle them in the first place. There is a growing trend for using virgin material but from a sustainable source, which usually means that it is approved by the Forest Stewardship Council (FSC), allowing its origin to be traced. In fact, the FSC is committed to the reversal of deforestation, and for every tree that is cut to produce cardboard many more are planted in its place.

Taking this approach means that it still has the premium feel and finish that many desire but a nod is made to the environment. Some may see this as a token gesture but it is a gesture nonetheless from a sector that has been less than green in the past.

I began by discussing a decline in sales for the luxury cosmetics and fragrance sector. A decline it may be, but when compared to some sectors it is a mere drop in the ocean. I believe that it will continue to hold its head above water and that is partially driven by the performance of luxury gift sets around Christmas.

Inevitably we have seen changes made, reflecting consumer trends and financial restrictions. But these have been subtle amendments rather than sweeping alterations. When times are tough, the consumer wants something to aspire to and this market provides just that. Unless that particular aspirational dream comes crashing down, I certainly cannot see any dramatic changes in terms of either the techniques or materials used for luxury gift set packaging in the months or even years ahead and we will continue to see aesthetics and quality as the two overwhelming considerations.

Stephen Shortland