Markets in Transition: Do Good Looks Count for Pallets?
Pallet user guru, Rick Leblanc, explores the market demand and interest in pallet appearance for shippers as well as the potential impact that floor ready displays will have on palletization.
By Rick LeBlanc
Date Posted: 6/1/2013
One of my first jobs over 40 years agowas piling surfaced four sided western red cedar fence posts, 13 pieces wideand 13 pieces high. Those were the first two things my boss taught me. And thethird thing I was taught was to turn the defects inward to hide them fromcustomer scrutiny. Talk about a lack of good looks, we were a bunch of scruffy18-year olds (this was 1972!) turning in the wane, knots and unsound wood sothat the bundles of utility & better fence posts looked like perfect clearswhen they arrived at the customer’s yard. First impressions count, right?
Fastforward to 2013, and now Rehrig Pacific, a major plastic pallet company, hasreleased a new case study confirming through some high tech methodology thatlooks do indeed count – at least for reusable beverage trays. That study,conducted in conjunction with Clemson University, compared the reaction of testshoppers to two different types of reusable beverage trays. This experimentincluded a typical application and one that takes care to match coloring withthe product as well as proudly display the brand associated with the displayedproduct. The shopper reaction was achieved through the use of technology,including special glasses, that measured how many times a customer fixated onthe standard or enhanced display, and for how long. The result of that study wasthat the color matched and branded reusable containers generated more fixationsand longer fixations, suggesting that in this case, that looks do indeed count.
Butwhat has this to do with pallets, barely visible at the base of the load, andoften never actually making their way to the retail sales space except perhapsfor club store formats or building supply yards. In fact, last year’s ModernMaterials Handling pallet survey did not even list pallet appearance in itslist of top priorities for pallet buyers. To recap, the top reasons on theModern survey included purchase price, strength and durability. To be fair, thefourth reason listed, customer requirements, could potentially include arequirement for appearance, but it is not indicated in the body of the report.More likely, customer requirements have to do with the pallet specification orpool provider.
Costco,which widely uses pallets in the sales area, seems more interested in palletquality and functionality, although pallet quality is to a degree related toappearance of the pallet. Better quality pallets tend to be more attractive.For Costco, point of sale graphics on display packaging, or clear wrap thatdisplays product inside seem to be more central to promotion than the pallet,which is neutral.
Onething to consider is the potential for future changes in the way goods movethrough the supply chain. For the last decade or more we have been talkingabout concepts such as one-touch merchandising that will eliminate the amountof product stocking and handling at retail, thus reducing clerical requirementsat the store. This has led to not only the growth of RPCs and other tray packproducts, but also to the increased use of floor ready displays (FRDs). Again,FRDs have been around for several years, but they are projected to continueincreasing in importance through at least 2020. FRDs reduce retail stocking labor. Moreimportantly, FRDs can give a lift to retail sales when placed at the rightlocation at the right time offering the right price point.
RecentlyCHEP has brought together a group of consumer goods leaders through aninitiative it calls “The Strategic Leadership Forum.” One of the forum’s hotbutton issues is that of FRDs, and as a result, the group is looking at them ingreater depth. The good news is that no one is saying that FRDs are notattractive enough. In fact, they can be extremely attractive. The challengeshinge on other factors, such as the lack of standardization with regard tofootprint, assembly, distribution and reverse logistics, with resultinginefficiencies. Of coursedifferentiation is one of the goals with floor displays. It seemed to me thatany move to standardize the FRDs would make them more generic with less eyeappeal. I posed this question to Vishal Pattel, who is managing the project forCHEP. His observation was that it is important to separate the messaging fromthe structure, i.e., the pallet or other reusable bin that might be employed.
Gettingback to pallets, one way that Plain Jane pallets are leveraged in retaildisplays is through the use of colorful pallet skirts, as shown in theaccompanying image. Typically these are recyclable corrugated cardboard,utilizing attractive graphics to help catch the eye of shoppers.
Sothere you have it. In spite of the Rehrig study, there is no apparent urgencyto roll out a neon Glampallet or a sequined Fashionpallet any time soon.
Having said that, here are myclosing thoughts:
1. Byhaving excellent quality assurance processes, you will ensure some degree ofrelated attractiveness of product, including branding and stencilling, etc.
2. Infollowing from the Rehrig study, if someone wants the Glampallet, then be readyto offer it. Perhaps some customers will see a value in matching the color oftheir products with pallet and color matching the customer’s product is a valueadded you can offer, whether for pallets on the retail floor or pallets ofroofing shingle on the flatbed truck.
3.Pallet skirts may make sense for some retail displayers.
4.Given that display building is a growing trend, your company may have interestin exploring this business opportunity, although it would require a food gradedistribution facility. Part of being a good looking pallet company is to be awareof trends and be ready to professionally serve customers as they transition.
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