By Stephen J. Hoch
Published: Spring 2007 in Design Management Review

Consumers benefit when packaging and merchandising materials distinguish the nature and quality of a product’s attributes. This is particularly important in the face of extensive choice. Such an approach also benefits a company when its offerings have clear advantages over those of competitors. Stephen Hoch explores how effective point-of-sale information design can be used to increase consumer wisdom and leverage sales.

        Manufacturers now selling through the big box superstore retailers face a more difficult marketing challenge than during the heyday of Sears, traditional department stores, and local lumberyards and hardware stores. One obvious difficulty is that the consolidation of the retail sector has created incredible scale economies for the larger retail players, providing them with extra bargaining clout over manufacturers both large and small. The reduced pricing power in the manufacturing sector creates constant pressure to cut costs without excessive compromises to quality. A second difficulty, and the focus of this article, is how rare it is for shoppers to find an informed store employee at point of sale. The lack of a knowledgeable store employee often prevents the dissemination of key information that would help educate the consumer about how to make good purchase decisions. The self-service environment works fine for some routine purchase decisions. However, many other purchase decisions are less frequent and require a measure of expertise. If consumers have no option for a dialogue when dealing with more-difficult purchase decisions, they are often left baffled by bad packaging and merchandising collateral, muttering to themselves in confusion, perhaps even walking away in frustration. The consumer, the retailer, and the manufacturer all suffer as a result, particularly if the manufacturer has a compelling point of difference. Many clients we work with at Proteus face this challenge. These small to mid-size players depend on a hostile retail environment for conveying their point of difference to consumers.

Explaining the point of difference

This article focuses on how firms can better explain the difference between their offerings and those of the competition—more specifically, how firms can provide consumers with a consumption vocabulary that can help them better understand what a product offers and why they should buy it. If the retail reality is that shoppers are on their own and cannot depend on store employees for advice, then the challenge becomes to provide them with the language necessary to conduct an intelligent self-dialogue about which product to buy.
        It was Wittgenstein who said, “The limits of our language means the limits of our world.” By this he meant the language and vocabulary provide the means not only for representing experience, but also for transforming it. My contention is that consumers’ understanding of their own preferences is aided by a consumption vocabulary—a taxonomy or framework that helps them: (1) to identify product attributes; (2) to evaluate the levels of those attributes; and (3) to understand the relationships among those attributes and their own internal evaluations of the product. In short, a consumption vocabulary can help consumers not only make choices, but also understand their preferences for future reference.
        The basic proposition here is that language influences what people can extract from experience. The apocryphal tale is that Eskimos have 200 words for snow, and this allows them to better appreciate the subtleties of life-or-death Arctic conditions. It ends up that Eskimos don’t really have 200 words for snow (although apparently they do have more than 30). In addition, discussions with avid skiers and surfers quickly reveal that they use a terminology to describe and interpret snow and wave conditions that is much better developed than that of the occasional participant.
        A consumption vocabulary serves a function similar to that of language in an interpersonal, social context: improving information transmission and sharing. The difference, of course, is that in many purchase situations the dialogue is internal, since the consumers are basically talking to themselves rather than to other people. Imagine three business acquaintances who [sic] out to dinner. A and B are wine aficionados, with finely honed enological vocabularies, who dissect the wine list and select a modest white Burgundy. C, not particularly knowledgeable about wine, finds the wine delicious and takes note of the “buttery, toasty, and ripe” taste noted by her colleagues. A and B clearly have a better understanding of what they like and dislike and why. The elementary consumption vocabulary acquired by C at dinner may allow her to consistently encode future wine experiences and increase her ability to extract satisfaction from those experiences.
        A consumption vocabulary proves especially relevant when consumers must interact with what might be termed holistic products. Some products can naturally be viewed as sets of fairly distinct features that are easily separable. Consider, for instance, consumer electronics, the feature specifications of which essentially provide the vocabulary for comparing alternatives. It is important to have a vocabulary for such products to help the consumer prioritize the attributes and then map them onto the product capabilities they desire. But a consumption vocabulary is even more important when it comes to products that come across more as a whole than a sum of parts. This is because the vocabulary can help the consumer identify and separate the underlying parts and better understand their relation to the whole. Many food items fall into this category, as do beverages such as wine and coffee. This may be why the gourmet chef often appreciates the food more than those who are eating.
        Recent research has brought to light two important consequences of consumers with better developed consumption vocabularies. First, a consumption vocabulary speeds up the appreciation process and leads to more stable and consistent preferences, both hallmarks of expertise. Second, a consumption vocabulary allows people to make more fine-grained distinctions among similar objects, therefore reducing satiation when exposed to multiple experiences with similar consumption objects.
        A rudimentary consumption vocabulary can transform novice consumers into quasi-experts or connoisseurs with a better understanding of their likes and dislikes. In a study conducted with colleagues Pat West and Christie Brown, we examined the evolution of people’s preferences for complex visual patterns in the form of quilt designs. People were either provided with a rudimentary vocabulary that described some of the building blocks that produce the largely geometric patterns (number of blocks, number of colors, block arrangement, and block rotation), or given information about the history of quilts (dates, prices, and nicknames). The participants viewed 70 quilt patterns two times with a 20-minute delay and indicated their preferences on a 1 to 10 scale. Two basic findings emerged. First, respondents provided with a vocabulary were 33 percent more consistent in their repeated ratings of the same quilts than non-vocabulary respondents. Second, although all respondents showed more clearly defined preferences as they gained experience, vocabulary respondents developed more stable preferences sooner; in other words, their preferences evolved faster. The key takeaways here are that a consuption vocabulary helps people to express more-consistent preferences that are closely linked to the underlying characteristics of the product. In addition, a consumption vocabulary appears to create pseudo-experts who know what they like and understand the differences between products.
        Another study by my student Joe Redden examined the effect of a consumption vocabulary on satiation, the phenomenon whereby repetition of similar consumption episodes leads to a decrease in enjoyment. In one experiment, respondents tasted three chocolate kisses followed by 15 jellybeans. One group was told they would taste chocolate and jellybeans; the other group was told that they would taste chocolate and five different flavors (cherry, peach, orange, tangerine, and strawberry) of jelly beans. Providing respondents with a rudimentary vocabulary allowed them to subcategorize similar stimuli into more fine-grained subcategories. As a result, they were less likely to experience feelings of repetition and expressed more enjoyment with the taste of each of the repeated jellybeans. Furthermore, they were more interested in continuing to eat jellybeans than the group was that was not provided with the simple flavor taxonomy. In sum, even simple consumption vocabularies can effectively turn consumers into quasi-connoisseurs and help them to develop more-consistent preferences and extract more enjoyment from a product experience.

Should you explain the difference?

As mentioned previously, the fact that a consumption vocabulary facilitates internal communication is particularly relevant in many retail settings, where the premium on efficient, self-serve, warehouse-like environments makes it virtually impossible to have any meaningful contact with sales personnel. Therefore, product packaging and any surrounding merchandising collateral must effectively provide enough of a tutorial to successfully substitute for a conversation with an informed expert. But before firms make an investment in providing consumers with a consumption vocabulary, they must first ask a very important question: Is an educated customer likely to be their best friend or their worst enemy? There are plenty of situations in which it probably is not in the best interests of the firm to transform a novice consumer into an expert. Consider, for example, a case in which a category is characterized by quality parity and there is no real difference to explain, but at the same time the firm in question is sitting on a market share with lots of brand equity. Numerous examples abound. Tylenol owns about 30 percent of the OTC analgesic market despite the fact that the active ingredient, acetaminophen, can be obtained at about one-third the price in a retailer’s private-label offering. So when Tylenol touts its products, instead of explaining the neurological workings of their products, they address specific problems for specific target markets and the added features that can alleviate the problems.
        Some top-dog brands engage in what has been labeled the meaningless differentiation strategy, where instead of providing a meaningful consumption vocabulary, the consumer is focused on irrelevant attributes. This includes such classics as “Budweiser, beech—wood-aged,” “Miller, brewed the American way,” and “Folgers mountain-grown coffee” (which is completely redundant, since virtually all coffee trees grow at higher altitudes on steep slopes). When product experience is ambiguous, as with the above examples, a top-dog brand can set the agenda through a fake vocabulary that maintains differentiation by distracting consumers from the fact that there are few differences to explain.
        Many of our clients at Proteus introduce innovative products with true points of difference, but have limited marketing resources to spend on educating the consumer before he or she reaches the retail space. These clients need to communicate branding without the benefit of a lot of advertising. Therefore, our consulting efforts often focus on providing a consumption vocabulary at the point of purchase through well-designed packaging, planograms, and merchandising aids right at the shelf. This requires that we quickly provide consumers with the language necessary to understand the product benefits and differentiate it from competitive offerings before frustration or ennui leads to purchase abandonment. Let me describe a few case studies to illustrate some of the concepts we’ve discussed.

How to explain differences among items in broad product lines: Case studies

When consumers are faced with a large number of choices, a consumption vocabulary becomes the means for understanding the differences among choices and reconciling those choices with their own experiences and needs.
        Wellington Cordage is the larges manufacturer of string, cord, rope, and marine cordage in the US. When Proteus began working on a repackaging of Wellington’s consumer product line, sold through Wal-Mart and big-box hardware chains, the line was organized into categories that make sense from an insider’s point of view: braided nylon rope, twisted nylon rope, nylon twine, natural fiber and natural fiber rope, and so on.
        A focus on fiber type and construction makes sense if you are approaching the selection process with a detailed understanding of how fiber and construction translate into performance. However, for most consumers, rope is an infrequent purchase, driven by a specific need. Research supported the obvious: Consumers were confused by the purchase decision and found little information that could help them at point of sale.
        To help consumers make sense of the number of options within the Wellington product line, Proteus developed a vocabulary that focuses on the most critical attributes affecting the consumer’s decision;

Usage occasion. Even if consumers have little understanding of the physical properties of the products, they do have a specific job in mind. In the case of the Wellington project, consumers were readily able to understand the use differences for anchor lines, clotheslines, mason lines, tow ropes, sportsman ropes, and twine. The new Wellington packages emphasize use occasion in the product names.

Load factor. A choice of light, medium, and heavy provides a consistent relative segmentation across all products, and is matched to a specific weight for each category of product. A packaging and merchandising system featuring redundant visuals, including color-coding of load factor, usage occasion photos, and graphics helps to solidify the vocabulary for consumers.

How to explain esoteric technical differences among products

Packaging is so often loaded with terminology and jargon that the consumer has no good idea of where to start in order to figure out which product best meets his or her needs. Even so, many packages do little to prioritize that information and by that omission, fail to give consumers a logical map of what to study first. This suggests that not only is a consumption vocabulary necessary, but also that there must be a clear hierarchy to the language. In essence, the vocabulary hierarchy can set the evaluative agenda, focusing consumers on a product’s relative competitive strengths and postponing consideration of features when there is a competitive disadvantage.
        Proteus was asked to create a new packaging and retail merchandising system for the Sof Sole brand of performance insoles. One priority was to give consumers the information necessary to identify the right insoles for their needs. Sof Sole athletic performance products include a number of features that shape their unique performance profile. However, only a detailed list of technical features—few of which are familiar to the weekend athlete—were available to answer the crucial question: Which insole is going to help me run more comfortably? The redesigned Sof Sole packaging gives emphasis to a single product characteristic as a starting point. Products are identified as Arch, Stability, or Athlete, indicating their most important performance benefit. A visual icon system also provides a cushioning rating of Soft, Medium, or Firm and a stability rating of Minimum, Medium, and Maximum, which allows for comparison across the product line. The redesigned Sof Sole packaging gives emphasis to a single product characteristic as a starting point.

Explaining products that require a trial experience

Consumption vocabulary can be important when the consumer is unfamiliar with the product and its benefits, especially when introducing innovations. A breakout innovation can go largely unappreciated if the consumer does not have an effective way to interpret how it provides improvement over existing alternatives. Good examples exist in the faucet and showerhead category. In neither case is a full-blown trial experience possible, so it falls to merchandising and packaging to provide the consumer with a means for anticipating the experience, and later interpreting the experience in the most positive light.
        When Delta Faucet was readying the launch of a new line of water-conserving shower heads, the company relied on research indicating that consumers place a high value on a powerful, forceful shower experience. This quality is impossible to experience in a retail setting—and conflicts with consumer perceptions of a product focused on water conservation. Accustomed to finding little packaging information that helps them to interpret and evaluate the differences among products, consumers often turn to evaluating physical attributes—for example, the size and shape of the shower head and the number of jets. None of these elements tell the full water conservation/shower experience story. A consumption vocabulary delivered through packaging and merchandising helps explain the product in ways that resonate with consumer experiences. The packaging emphasizes several key elements, beginning with the descriptor Shower Amplifying Showerhead rather than the brand name. The package also provides visual information, including a clear view of the product and a photographic representation of a forceful spray. Along with supporting language that discusses water conservation and ease of installation and promises a product that “feels like more water pressure,” these elements support an internal dialogue that relates directly to experiences using showerheads.

Consumption vocabulary is not a free lunch

With a well-developed vocabulary, the consumer is empowered to make better decisions. However, providing an effective consumption vocabulary requires some thought. As long as your product has a difference worth explaining, this is no problem. If that is not the case, the sovereign customer will be in a better situation to realize when quality parity exists or when the differences are inconsequential, therefore encouraging a decision on the basis of price. Some retailers have become quite qccomplished at taking advantage of this situation in the packaging and merchandising of their private-label products. Since the majority of private labels are “me toos,” the retailer procures similar packaging to that of the leading national brand and then piggybacks on the communication efforts of the leading brand by simply saying three magic words: compare and save. National brand efforts to educate the consumer can backfire here, making it even easier for consumers to engage in the comparison and in turn realize that the active ingredients are identical.
        For those firms fortunate enough to have designed innovative products with significant points of difference, an educated consumer armed with a consumption vocabulary is the best of all possible worlds. This is something Apple Computer has always believed. But even companies as strong as Apple experience difficulties in this area.
        After years of decreasing market share and reduced attention from their reseller network, Apple decided to take a big gamble and open its own stores to create a retail environment where knowledgeable sales associates could spend the time necessary to fully appreciate the value added from the iPod and the rest of the Mac product line. Now, with about 150 stores accounting for almost 20 percent of total revenue, sales per square foot of about $2,600, and an average transaction of more than $1,300, the value of Apple’s investment in educating the consumer is apparent. It just shows that an educated consumer can be a firm’s best friend, whether that education comes through interaction with a knowledgeable salesperson or through an interior dialogue supported by a consumption vocabulary.
        It’s safe to say that a majority of firms lack the large resources necessary to create the kind of retail environment Apple did. In self-service and especially big-box retail environments, it’s imperative that packaging design expose differences not only among brands, but also among the various products. Packaging can effectively create a dialogue with the consumer. This is a retail reality.

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