How Nielsen Is Helping Marketers Measure the Impact of Packaging Design

Does packaging design directly increase sales? Like any marketing tool… it depends.

At forceMAJEURE, we believe that design plays a central role in a product’s success. Proving that belief, however, is another story. As is true for many elements of product development and marketing, it’s difficult to measure the precise ROI of packaging design. And whereas experts have made progress with investments like TV advertising and sampling campaigns, design remains woefully under-measured and, as a result, under-appreciated. Fortunately, this blank space has not gone unnoticed; the measurement giants at Nielsen are on the case.


One of my more visionary goals here is, how can people measure on an ongoing basis the performance of their design? - Steve Lamoureux, SVP Production Innovation, Design Solutions at Nielsen Innovation Practice

Brand managers need information in order to make major decisions about the products they oversee: evidence, data, results. When it comes to packaging design, the unfortunate fact is that most of the current evidence comes from failures: it’s newsworthy and measurable when redesigns by brands like Coca-Cola and Tropicana fail spectacularly and sales go off a cliff. But the lack of case studies demonstrating the positive impact of packaging design—along with most brand managers’ risk-averse tendencies—means that major investment in the design process is rare.

Nielsen wants to change the conversation around packaging design, and we couldn’t be more excited about their imaginative approach. As they explained to us, part of the impetus for establishing the Nielsen Design Impact Awards was to create methodologies by which to judge the effectiveness of design (more on those shortly). This is big. Having such criteria and analytical tools will open the door for more productive conversations between agencies, CMOs, and brand managers about the ability of packaging design to drive awareness, consideration, and purchase—and how to invest in design in strategic and measurable ways.

It’s important to note that packaging design is a huge, foundational undertaking. Design does many different jobs. So to measure impact, an analyst must first understand the impetus for the redesign: Does the brand want to improve its reputation? Is it fighting off ascendant competitors? Is its target demo aging? These questions were part of Nielsen’s impact-analysis process. The company’s stance on whether a brand manager should commit funds to strategic packaging design, however, is not tied to one particular goal or another.


I can't tell you whether it's 500% or 5000%, but packaging design is probably greater than any other return on investment you'll make as a marketer. - Steve Lamoureux, SVP Production Innovation, Design Solutions at Nielsen Innovation Practice

So, to go back to our initial question: does great packaging design increase sales? A substantial uptick in revenue is the holy grail of any major investment, but it’s also nearly impossible to draw a direct connection between a package redesign and a corresponding jump in product sales. As such, Nielsen attempts to detect design impact by looking for three key indicators: a corresponding growth in sales, a measured increase in preference, and effective strategic communication.

Without further ado, let’s dive into the process Nielsen created to measure the positive impact of great packaging design, and why we’re excited about it.


Marketing and Sales Data

Naturally, data plays a significant role in the first step of Nielsen’s process. The measurement company has access to retail scanner data, which tracks product sales, pricing, and other metrics through Universal Product Codes (UPCs). While brand-new products get new UPCs, package redesigns typically don't trigger a UPC change. This means it's difficult to determine exactly which sales can be attributed to the new package versus the old.

In Nielsen’s imaginative approach to this challenge, the starting point is to estimate the transition point from an old design to the new. This is often not clean-cut, as soft launches can blur the picture, so Nielsen designed their analysis to disregard the old-to-new transitional period.

Next question: to what extent are there other factors to consider, such as price changes, increased marketing support, or line extensions? There are ways to handle these variances when they come up, but there’s no getting around the fact that there are likely contributing forces to the sales jump. That said, even Nielsen does not strive to “isolate” the precise impact of design. It’s just unrealistic. Rather, they look at redesigns in their larger marketing context.

Package design, as the visual representation of the brand and product, plays a major role in all visual forms of marketing. An ad campaign will be more effective when the hero product reinforces your strategic message and resonates with consumers. In this scenario, should the ad spending get credit, or the packaging? It is impossible to know for sure, but that’s okay, because there is enough evidence that the improved design was a contributing factor—and the cost of that redesign is a tiny fraction of typical ad spends. - Steve Lamoureux

Armed with their datasets and corresponding analyses, Nielsen advanced to the second stage of evaluations the nominated design changes that coincided with a dramatic sales and share change, and for which the redesign was an apparent key factor.


Establishing Strategic Objectives

Packaging design is almost always a customer’s first impression of a brand or product. As such, it needs to communicate the brand’s values, seducing the shopper using visual triggers. A crucial step in analyzing whether a design or redesign is effective, therefore, is to understand the strategic intent behind it: what values and key messages does the pack need to convey?


Customer Surveys

With the brand’s strategic intent in-hand, Nielsen set up their consumer surveys to answer two major questions: Which of two unidentified side-by-side versions of the pack (i.e., old vs. new) would you prefer to buy? And, which of the two better communicates X (i.e., the key message)?

By getting answers to these questions from purchasers in the brand’s category, Nielsen was able to validate the central role that package design played in the observed bump in sales that qualified the product for the Nielsen Design Impact Awards in the first place.


We had the market data that showed post-redesign growth in sales.. Then we used consumer exercises to confirm that the growth was driven by a design change that improved preference and strategic communication. - Steve Lamoureux, SVP Production Innovation, Design Solutions at Nielsen Innovation Practice

With any new product there are of course factors like visibility and shelf placement that drive awareness, consideration, and purchase. The Nielsen analysis didn’t touch on visibility directly, but from the survey results, analysts could see how much pack preference and customer understanding of the strategic intent corresponded with positive business results. Products with exceptional growth and top scores on these two “pack check” questions won Nielsen Design Impact Awards across different business situation categories like brand size and industry.

But there’s more! In our conversations with Nielsen, we received additional valuable data from both structured and open-ended exercises the company performed with survey participants, analyzing their reactions to pack design in a few different ways.


Free Association

This exercise is designed to elicit customers’ spontaneous responses to the “old” and “new” packaging. Like in a Rorschach test, participants are given a quick look at each design (blind to whether old or new), and share the first words that come to mind based on each visual.

The resulting word clouds provide Nielsen and the brand with a high-level view of how customers instinctively react to the pack designs. Comparing word clouds for the old with the new also reveals more about how the design is able to convey the brand’s strategic messaging, or not.

As fervent believers in the need for products to seduce customers at first sight, we were thrilled to get this data on the spontaneous reactions our pack designs inspired.


Sentiment Analysis

Nielsen then puts the free association responses through a sentiment analysis. This provides greater insight into whether the pack redesign is more emotionally compelling than the original.

Some words are loaded with emotional value, and so we have a way of evaluating whether or not you’re creating a different or more of an emotional response. - Steve Lamoureux, SVP Production Innovation, Design Solutions at Nielsen Innovation Practice


Click and Comment

In this diagnostic exercise, consumers share what they like most and least about packaging designs using an interactive interface; they literally click and comment on images of each pack.

In the design process, you could use this to understand what's working and what's not working. In this case, after the fact, you can understand what might be driving the positive results that you’re getting. - Steve Lamoureux, SVP Production Innovation at Nielsen

We loved getting to peruse customers’ comments about their favorite and least-favorite elements of our pack designs. By surveying hundreds of people, Nielsen provided us with detailed feedback on our work. And one of the most exciting things about the exercises developed for the Design Impact Awards is how they can be implemented in the initial design process.


We wanted to both create tools that would enable good behaviors early in the process, and to encourage people to look to their process. It starts with a good agency and a good strategy. Then you go to the people for whom you’re designing. - Steve Lamoureux, SVP Production Innovation, Design Solutions at Nielsen Innovation Practice

When purchaser feedback on prototypes can become lead indicators of success, we can all have greater confidence in design’s ability to drive success. This will help CMOs and agencies like forceMAJEURE collaborate through design on beautiful, breakout products.

We’ve always believed strongly in the ability of great, strategic packaging design to disrupt industries and differentiate products. While design has been “the least measured and the least measurable” in our Nielsen partners’ estimation, do your research and you will see that there is evidence everywhere that great design unlocks significant growth—in part because it plays a very direct role in the effectiveness of all other marketing efforts.


#brandrenovation #ROI #designeffectiveness #designimpact #strategy