As is to be expected, the health of the packaging industry tends to mirror production trends in the various packaged goods industries. Numerous factors influence packaging demand however, ranging from consumer spending and population growth, to technological advancements in packaging materials and packaging product development.

The European packaging industry is currently the largest in the world accounting for approximately 30% of the global packaging market. The UK alone accounts for 20% of the European industry, second only to Germany in terms of market share. Forecasts up to 2008 place the European packaging market growth at 3.3 per cent annually to $129bn, representing a rebound from the 1999-2004 average pace.

Paper and board still holds the highest share in the UK packaging sector, standing at an estimated 42 and 60 percent respectively in 2004. Nonetheless, according to a Market and Business Development (MBD) report, the underlying trend has been downward, reflecting competition from other materials (most notably plastic) and the prevailing business environment.

Among the many challenges faced by the U.K. packaging market is the overwhelming domination of the retailers, particularly in the leading area of food applications, and the resulting pressure on prices. Although some growth opportunities are emerging from changing retailing and consumer trends, for example an increasing demand for ready meals or the potential for shelf-ready packaging, these are somewhat niche and for the majority of suppliers margins are shrinking.

Identifying Sales Opportunities
“As industry declines so do we. Our pool becomes smaller and we have to squeeze more out of the market,” explains Roger Berry of Ridley Quiney, a packaging wholesalers’ merchant. “There are some growth areas led by technology and consumer buying habits, such as an increase in packaged food and the ‘Ebay effect’ which has seen a massive growth in cottage mail order industries driving up demand for packaging. But these factors have a knock on effect across the industry and will not drive growth as a whole.”

In order to compete in a largely price driven market, packaging distributors must find a way to identify emerging sales opportunities quickly, not only from new but also from existing customers. Inevitably this responsibility falls to the already overworked sales team who will in turn need to rethink their processes in order to cope, preferably automating the process by use of a sales tool. But is this answer? And, if so, how would it work in practice?.

Vecta Sales Intelligence
Recently, a new technology, known as sales intelligence, has emerged which is designed specially for sales professionals working in wholesale and distribution who find themselves in this situation. Sales intelligence solutions are able to take information from existing back office and accounting systems and deliver insight into customer buying patterns by proactively keeping the sales team informed of sales opportunities or potential problems with drifting business.

The leader in this field is VECTA Sales Intelligence, which also incorporates those elements of CRM that are relevant to distributors and wholesalers such as contact, diary and activity management. It automatically delivers critical information about customer buying patterns that translates into real sales opportunities. It is able to identify potential up-sell, cross-sell or switch-sell opportunities, in addition to highlighting customer drift, without relying on an operator to perform complex data analysis.

Ridley Quiney has a catalogue of over 1,600 products and decided to try VECTA when it recognised a need to boost sales but wasn’t sure where to begin. The software now immediately alerts Ridley Quiney’s sales team when a customer stops buying certain lines, but that’s not all;

"VECTA is a very powerful sales tool,” explains Roger Berry. “You get a very detailed picture of a particular customer and you can look at a similar customer and see if the picture is the same. If it's not the same, you can begin to ask questions and strengthen your sales pitch. Our sales representatives are making additional sales based on knowledge of what other customers are buying."

Actionable Sales Intelligence
According to Berry the company achieved a rapid return on the investment. "VECTA paid for itself in within the first four months of using it," he says. "It took a matter of weeks for all the users to be trained and fully up to speed using the tool."

The key difference in the VECTA approach is that it does not require the level of investment, both in terms of time and money, as that of traditional customer relationship management (CRM) or traditional business intelligence (BI) solutions. VECTA delivers actionable sales intelligence, out-of-the-box. There is no need to build data warehouses and dashboards using toolkits like many BI solutions, and crucially, unlike CRM, salespeople don’t have to enter data before they get useful information back, so end user adoption is almost guaranteed.

Increasing Business Agiliity
Changing the way sales professionals work will be at the heart of creating the kind of agile, sales-focused business that will survive in a rapidly changing industry such as packaging. Although consolidation means constantly shrinking margins, opportunities for new sales channels are emerging all the time. It’s just a case of thinking outside ‘the box’.

DATA SOURCES: Questex Media Group 2006.

Key Pressures:

Domination of the retailers.

Market Consolidation.

Price pressure accross packaging sector.