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It’s what’s on the outside that counts

At the dawn of the CD-ROM era in the early `80s, spiking consumer demand for all things digital made the issue of product packaging completely irrelevant. 'You could literally put a disc in a paper bag and it would sell like...
October 1, 1998

At the dawn of the CD-ROM era in the early `80s, spiking consumer demand for all things digital made the issue of product packaging completely irrelevant. ‘You could literally put a disc in a paper bag and it would sell like crazy,’ says Gary Sousa, manager of consumer software channel marketing for IBM’s interactive Crayola line. ‘As a matter of fact, CopyII PC, a title that became one of the biggest-selling utilities of all time, was initially sold out of someone’s garage.’

But with 8,000 to 10,000 overlapping CD-ROMs flooding the market each year, the present-day software industry has become a disc-eat-disc world where packaging plays the most crucial role in determining which titles will rise to the top. ‘The largest retailers only pick up 1,500 to 2,000 new titles annually, so if you don’t have state-of-the-art packaging, you’re not even going to get into stores,’ Sousa says. ‘Then, the browsing consumer looks at each box for 1.7 seconds. You’ve got less then two seconds to arrest their eye and pique their curiosity enough to make them pick up the product and carry it to the check-out counter.’

Rising to the challenge, CD-ROM producers have developed some sophisticated techniques to make their titles stand out. One such method that is currently peppering the industry is the use of on-pack rebates offers from US$5 to US$50 off the box price. ‘A lot of publishers view retail as simply a staging area for forging long-term customer relationships, and they’re willing to sell at a loss in order to gain repeat business,’ says Conall Ryan, president of Houghton Mifflin Interactive. ‘Rebate success hangs in a delicate balance. Publishers count on the redemption rate being south of a set percentage so they can still make money on the aggregate, but if the redemption rate soars, they get totally hosed.’

Ryan’s company prefers the less risky added-value method. Targeting parents with its Curious George Young Readers series, HMI’s back-to-school release, Curious George Reads Writes and Spells for Grades 1 & 2, is housed in a retro tin lunchbox that retails on its own for US$10. The other three CD-ROMs in the series have undergone packaging facelifts, and now come with premium gadgets such as Curious George mini-books, diaries and pencil boxes.

Free stuff also scores points with kid consumers. Purple Moon, producer of interactive software for girls, experiences sales increases of as much as 50% to 75% when gifts like make-your-own-necklace sets, lip gloss and mini-backpacks are included in product boxes. According to Kathleen Watson, director of marketing, ‘eight- to 12-year-old girls may not be shelling out the actual dollars, but they’re certainly influencing the purchase. They don’t want five bucks off, they want cool merchandise.’ JL

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