Umi is a premium-priced personal care range that has posted incredible growth.

Designing for the Bottom Line

Good design sells, and investing in it can yield big profits.

By Jonathan Ford

Well-known fact 1: When all else is equal in terms of product quality and price, it is better design that creates the competitive business advantage.

Well-known fact 2: We are living in an age of media revolution, which has diluted the power of traditional advertising and the costs and relevance of huge advertising spends.

Well-known fact 3: In a world of shorter attention spans for the over-choiced consumer, what stands out is mold-breaking, forward-thinking design that meets evolving human needs.

All of these things add up to a very compelling argument: The power of design can be directly related to the commercial effectiveness of a product or service and the overall success of the brand.

Simply put, good design sells, and investing in it can yield big profits.

Now, more than ever, placing value on design can be seen as an investment in a healthy brand and a profitable business future. Design is the single, most tangible interface between anything manmade and the people who use it. Therefore, in a commercial context, how well it is designed in both the function and aesthetic will affect the bottom line.
   
Of course this is nothing new. If we think of automotive design, Henry Ford and Harley Earl had these dimensions figured out ages ago. Today, you can see that design is still the key factor of the success of the automotive industry, be it through styling or responding to modern practical issues such as the quest for clean energy engines.
   
Beyond the fashion and luxury sectors, there are other beacons in big brand business where we can see the power of design embraced throughout an organization. Method, Apple and B&O, of course come to mind. Mega-successful retailers such as Target in the U.S. and Waitrose in the UK also have a tangible appreciation of the power of design running throughout their packaging and in-store environments.
   
But I dare to say it has largely been forgotten in the corporate mass brand world where design budgets have been relegated in importance or distanced from the chairmen of companies who publicly talk about building brand value. These organizations are defined by a short-term, annual budgeting cycle, incremental growth targets and cost-cutting cycles.
   
It is interesting that Pearlfisher has many projects from private equity groups who recognize the power of design to transform brands in which they are looking at the longer term to realize their investment. Here, design is seen as a crucial component of success and business leaders are commissioning an essential skill (not service) as the foundation of growth.
   
So let’s look at some quantifiable case histories, all of which have had data supplied and verified by clients with whom we have worked.

Green & Black’s

Green & Black’s, a brand of organic chocolate with a bittersweet taste, was launched in 1991 by a husband and wife team. By 2002, sales had reached £4.5 million (Euro 6.7 million), but the brand could not seem to progress beyond 1% of UK market share. Supermarkets viewed it as a limited offering whose primary selling point was its organic status. Our brief, on an initial budget of £50,000

Green & Black’s luxury line of chocolates.

($100,000), was to reposition the Green & Black’s brand from worthy organic to luxury premium chocolate: This would enable Green & Black’s to operate in the emerging premium sector market and to begin expansion into the U.S. market. Sales at the end of 2005 had risen to £30 million, and exceeded £40 million ($80 million) in 2006! Green & Black’s is now the fastest growing confectionery brand in the UK (with annual growth of 61% in a sector growing at a rate of 1.8%) and now commands 7.4% market share. Cadbury Schweppes, which had been a 5% shareholder in the business since 2002, wholly acquired the Green & Black’s brand in May 2005 for around £25 million ($50 million). The brand’s global presence has been extended in new markets and is getting a strong foothold in the U.S., primarily through distribution to natural food markets like Whole Foods.
   
Umi Waitrose is famed and trusted for its food expertise. It’s the very essence of the brand’s positioning, and has enabled it to become the quality leader among supermarkets.
   
Umi was launched in 2004 as a flagship range in the development of Waitrose’s premium toiletry and skin care business. Key objectives for the design were to communicate Waitrose’s expertise in toiletries and extend the brand’s reputation beyond food. The commercial objective was to achieve a 20% increase in sales on the toiletry range that Umi replaced. In a relatively static market, Umi achieved a 48% increase in sales. Along with the sales growth, Umi also achieved a higher price premium with considerable volume increases on certain lines. For example, Umi face cream rose 25% in price with a 575% increase in volume sales, Umi body wash rose 7%, 206% in volume sales and Umi body soufflé rose 11% with volume sales of 120%.
   
The launch of Umi was also a major contributor in Waitrose’s increased share of key personal care markets—with share growth of 16% in bath and shower and 19% share growth in hair care.
   
Along with marketplace success, the internal recognition of Umi was also invaluable, culminating in Umi being stocked in Waitrose’s sister department store John Lewis in March 2005. The decision to stock Umi then, was based solely on product and design rather than any family ties—that it looks good enough to sit alongside Molton Brown and other premium brands on the beauty counters of John Lewis.

(Oops) Wine

(Oops) Wine is a great category-busting design marrying a fresh look, which flies in the face of the convention of “critter wine labels” and presents its story of the accidental rediscovery of the lost Carmenere grape as a newspaper wrapped around the bottle. During its first four weeks on a major U.S. retail chain, it held the No.1 and No. 2 bestselling SKU’s in the new wines category. In July 2007 it began rolling out nationally, in its first full year in distribution. This was as a result of outperforming nationally recognized brands in major test markets.

Oops Wine has a fresh look.

Making the Case in the U.S.

What the U.S. design industry needs is to be able to argue effectively the case for . . . effectiveness—and to engage big business as part of the process to appreciate the added value that good design brings.
   
In the UK, the Design Business Association (DBA) holds the only awards program where designers and clients in many design categories collaborate to enter designs with client-verified data, which proves the impact that design has had, and the size of the return on investment. It is up to the designer to put the case forward. The resulting awards are in turn a great asset when talking to prospective clients about the added value design brings and the track record that a winner has.
   
In the U.S., we need to see something similar as a first step so that we can engage clients and organizations across the states in a new type of awareness building, a proven system where commercial results can be celebrated as well as the aesthetics. Perhaps the AIGA should collaborate with the DBA?
   
The problem is that for many organizations, it is difficult to separate out the effectiveness of design from other brand-building activity. But this is the point of the awards; if you can’t prove it, don’t enter it. Those who do and win prove the bigger case for a return on investment every year, and each year it gets more profile within industry and government. And we are not just seeing design consultancies that are consistently successful in these awards, but also brand owners; these companies truly understand the power of design in the marketplace and will invest on a long-term basis.
   
An awards program isn’t the only solution. Simply by tracking progress over time with open-minded clients and then communicating it is another. As an industry, we all have a responsibility and vested interest in presenting the case for design effectiveness and demonstrating its real value to our clients.”