Good software can come in small packages

Discount Store News, April 1, 1996 by Pete Hisey

The packaging issue in the computer software world has died down somewhat, due primarily to the inability of industry groups to come up with a standard that pleased publishers, distributors, retailers and super publishers alike. After banging heads for three consecutive years, most are letting the issue lie - for now.

But in the long term, as mass retailers become more and more important to the industry, merchants are going to have to find ways to fit more product on shelves. There are literally thousands of consumer titles on the market today, and while specialized mass merchants like CompUsa and Best Buy can stock up to 3,000 of them, general merchants like Target and Wal-mart can accommodate no more than 500 or so, at least at the present package size.

ln recent months, at least two new approaches have appeared on the market, each of which addresses most of the weaknesses of present-day packaging.

Saban Entertainment, the licensee of several hot properties including the Mighty Morphin Power Rangers, offers a videocassette-like approach developed by Multi-Media Publishing & packaging of Chatsworth, Calif. The extruded vinyl pack is about half the size of standard packaging, easily peggable, virtually crushproof and less expensive and less wasteful. Only the shrink-wrap is meant to be thrown away.

According to Multi-Media president Jeff Herman, present software boxes are "just selling air. There's a huge environmental problem with the amount of waste generated by a single software package."

His company's vinyl box is designed, like video packaging, to become part of a permanent library.

It's sized to fit anywhere a three-ring binder will fit," he said, "and its small size means users can organize easily without taking up a lot of space."

But, he added, the advantages don't stop there. The compact packs are immediately familiar to consumers because of their videotape experience (Multi-media,s main business is creating clamshell packs for sell-through video). Plus, they're virtually indestructible, fit all standard shelving and merchandising fixtures and offer a value-added equation to shoppers.

"There is nothing value-added about the jewel box, from the consumer's point of view," Herman said. "Our packaging, in contrast, offers opportunities for collectibility and built-in storage." One unique feature of his packaging, Herman noted, is a Pop-It feature that locks and releases the disc with the simple push of a finger. "That means that fingerprints - and worse - are kept off the disc," Herman said, "and it makes it much easier for young children to access and store their CD-ROMS."

According to Saban Interactive's David Koch, collectibility is a major advantage to the new packaging. "Consumers are used to creating libraries of videotapes," he noted, "and they would probably like to treat this category the same way."

Koch is looking at creating truly collectible versions of each release (a) la trading cards), because kids respond to that approach. For instance, a gold disc or a different graphic on the disc could create an aftermarket and increase interest in the category as a whole.

Ringling Multimedia, an offshoot of the Ringling School of Art and Design, has taken a similar, but distinct, approach to packaging. The company packs its interactive CD-ROMs in a sleeve attached to a full-size coloring book that can be merchandised both in children's books and in software.

According to Ringling vp Jim Cooper, the company conducted extensive market research before entering the retail market this year. "We wanted to reach the new multimedia computer users, and that's the average American family," he said. "We found that what they wanted was a good product at a good price and a package that had a value-added message. The average quality kid's book costs about $20 or so, and what we're offering is a book and CD combo - a whole home learning system - for roughly the same price."

The shift away from traditional software packaging was driven by three factors, he said. One was cost. This packaging method is far cheaper than the traditional box. The second was waste. "Except for the shrink-wrap, which you can't get away from, everything in our package is useful," Cooper noted. And the third was retail friendliness. Frankly, the [mass] retailers in this industry are far more dynamic and accepting of new ideas than are other segments of the industry," he said. Demand from some distributors and retailers has forced Ringling to offer, albeit unhappily, a boxed version of its product.

"From a retail standpoint, this type of packaging makes sense," Cooper said. "You can fit 12 of our titles into the space of two or three of the boxes. Where we ran into resistance was from retailers who display spine-out. Our programs really don't have spines, and they tend to disappear on-shelf."

The company's Let's Pretend series, which will have four titles on the market by the fourth quarter, is created to be displayed face-out, as most mass merchants prefer. "Everything the consumer needs to know is right on the package," Cooper said. "We don't want consumers looking at the spine and the top and the bottom trying to find system configuration and other information."